Cigarette taxes in the United States

Although cigarettes were not popular in the United States until the mid-19th century, the federal government still attempted to implement a tax on tobacco products such as snuff early on in its history.

Hamilton's original proposal passed after major modifications, only to be repealed shortly thereafter with an insignificant effect on the federal budget.

On July 1, 1862, the United States Congress passed excise taxes on many items including tobacco.

This occurred as a result of the Union's increasing debt during the American Civil War and the federal government's need for additional revenue.

That university desired greater freedom to apply for grant money under the proposed law which largely prohibited such expenditures.

[8] According to Nobel Prize-winning economist Gary Becker, who has studied the long-run price elasticity of cigarettes, the tax increase as a result of the Children's Health Insurance Program Reauthorization Act increases the price of cigarettes 13.3% which ultimately means a 10.6% decrease in unit sales.

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 (CDC) more than half of all smokers are low income.

[9] The CDC also notes that, "However, because low-income groups are more responsive to price increases, increasing the real price of cigarettes can reduce cigarette consumption among low income smokers by a greater percentage than among higher income smokers, and thereby diminish socioeconomic smoking disparities.

[11] 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.

According to ABC News, the study found that "higher cigarette taxes may be financially hurting low-income smokers rather than making them more likely to quit."

In 2010 in Canada, R. J. Reynolds Tobacco Company agreed to pay a total of $325 million to settle claims related to the smuggling.

A Reynolds subsidiary, Northern Brands International Inc., was fined $75 million after pleading guilty under the Canadian Criminal Code to one count of conspiracy for helping others sell contraband cigarettes.

[39][40][failed verification] As of December 31, 2021, 30 states and the District of Columbia have passed legislation that requires a tax on electronic cigarettes.