Friday, October 10, 2014

Cigarette taxes in US

In the United States cigarettes are taxed at both the federal and state levels, in addition to any state and local sales taxes and local cigarette-specific taxes. Cigarette taxation has appeared throughout American history and is still a contested issue today.

One of the biggest critiques of the passing of this bill comes from economists who believe that an increase in the federal cigarette tax will lead to decreased funding for state programs that rely on their own state cigarette taxes.

Another argument against this bill claims it to be regressive, holding that the tax increase unfairly targets the poor because according to the Centers for Disease Control and Prevention more than half of all smokers are low income. Further, lower-income communities also suffer from tobacco-related illnesses at a disproportionately higher rater than their higher-income counterparts.

One of the reasons for the support of increased cigarette taxes among public health officials is that many studies show that this leads to a decrease in smoking rates. The relationship between smoking rates and cigarette taxes follows the property of elasticity; the greater the amount of the tax increase, the fewer cigarettes that are bought and consumed.

The federal excise tax on cigarettes is $1.01, which is not included in the rates shown above. Most states charge a sales tax on top of the retail price and the excise taxes. A few municipalities levy a local sales tax in addition to the state tax.

American states Tax rates Per Pack (USD)

Alabama 0.425
Alaska 2.00
Arizona          2.00
Arkansas        1.15
California       0.87
Colorado        0.84
Connecticut 3.40
Delaware        1.60
Florida            1.339
Georgia           0.37
Hawaii 3.20
Idaho 0.57
Illinois            1.98
Indiana            0.995
Iowa              1.36
Kansas 0.79
Kentucky         0.60
Louisiana         0.36
Maine 2.00
Maryland         2.00
Massachusetts 3.51
Michigan         2.00
Minnesota       2.83
Mississippi 0.68
Missouri         0.17
Montana          1.70
Nebraska         0.64
Nevada 0.80
New Hampshire 1.68
New Jersey 2.70
New Mexico 1.66
New York 4.35
North Carolina 0.45
North Dakota 0.44
Ohio 1.25
Oklahoma 1.03
Oregon 1.31
Pennsylvania 1.60
Rhode Island 3.50
South Carolina 0.57
South Dakota 1.53
Tennessee 0.62
Texas 1.41
Utah                 1.70
Vermont            2.62
Virginia             0.30
Washington 3.025
West Virginia 0.55
Wisconsin 2.52
Wyoming           0.60
District of Columbia 2.50
Northern Marianas Islands 1.75
Puerto Rico 2.23
Guam 3.00
American Samoa 2.50
Virgin Islands 1.78

Taxes on smokeless or chewing tobacco, as well as (and often concurrent with) snuff, cigars and pipe tobacco, are also common in the United States. Of the 49 states that do impose in this category, Florida does not tax cigars, though all other tobacco products are taxed. The U.S. federal government charges different non-cigarette excise taxes, according to the following 6 categories: snuff, chewing tobacco, pipe tobacco, roll-your-own, large cigars, and small cigars. Cigarette papers and tubes are also taxed.


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