Federal Cigarette Tax Increase Means Nearly $2.3 Billion Reduction in Revenue for Sta

[red states rule]

OK, what taxes will Obama and Co jack up when so many people are priced out of buying smokes?



Federal Cigarette Tax Increase Means Nearly $2.3 Billion Reduction in Revenue for States

Federal Tax Increases from $0.39 to $1.01 Per Pack Starting Today, Will Depress State and Local Government Revenues

Washington, DC, April 1, 2009 - According to new analysis from the Tax Foundation, state and local governments will see a reduction in revenue totaling $2.3 billion in fiscal year 2010 due to the federal cigarette tax increase from $0.39 to $1.01 per pack that takes effect today.

In Tax Foundation Fiscal Fact No. 166, "The Effect of the Federal Cigarette Tax Increase on State Revenue," Tax Foundation chief economist Patrick Fleenor explains that the hike in the federal tax will depress state and local government revenues because, as Congressional authorities estimate, the sale of legally stamped tax-paid cigarettes will drop by about 10 percent—or 1.7 billion packs—in the aftermath of the tax increase.

To varying degrees, state and local governments rely on the sale of cigarettes for three sources of revenue. The smallest is general sales tax revenue, where almost all states levy a general sales tax on cigarettes. The next largest is revenue from the Master Settlement Agreement (MSA) they signed with the four major tobacco companies in 1998. The largest is excise tax revenue, or product-specific taxes levied on cigarettes, which (under current law) range from 7 cents per pack in South Carolina to $2.75 in New York.

"The bulk of state and local revenue losses will result from $1.6 billion in lost excise tax revenue," Fleenor says. "MSA payments are also expected to fall by $805.8 million."

Losses are expected to vary widely by state. California, Texas and New York are expected to each lose more than $150 million in revenue next fiscal year. Meanwhile, losses in Wyoming, North Dakota and the District of Columbia are expected to be less than $6.5 million.

Fiscal Fact No. 166 can be found at http://www.taxfoundation.org/publications/show/24532.html, where one can find a full list of states and how much revenue each state is expected to lose.

The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.

http://www.taxfoundation.org/news/show/24560.html

[Classact]

The new SCHIP program being paid for with the somke tax funds medical care for Illegal Mexicans and moves a lot of middle class adults onto government insurance.

The states lose on this deal because the major cigarette brands have law suits that pay states revenue based on consumption... less consumption then the states get less of the health related legal judgment.

[red states rule]

The new SCHIP program being paid for with the somke tax funds medical care for Illegal Mexicans and moves a lot of middle class adults onto government insurance.

The states lose on this deal because the major cigarette brands have law suits that pay states revenue based on consumption... less consumption then the states get less of the health related legal judgment.

The dsame happnes when most taxes are increased. The increased tax causes less activity and thus less tax revenue

Don't worry though. The government NEVER goes without the money - so they will raise other taxes and tell us "it's for the children"

[Classact]

The dsame happnes when most taxes are increased. The increased tax causes less activity and thus less tax revenue

Don't worry though. The government NEVER goes without the money - so they will raise other taxes and tell us "it's for the children"I'll bet there will be a cigarette black market that will even punish the tax collection more severly. I smoke and I buy tax free smokes here from Germany at the Coast Guard for $6.99 a carton...The CG makes a 20% profit so they must cost less than $5.00 from the producer...(tastes just like Marlboros) that's ten packs at about the cost of one taxed pack in NYC and where there is money to be made in these terms illegal activity will be right behind the move.

[red states rule]

I'll bet there will be a cigarette black market that will even punish the tax collection more severly. I smoke and I buy tax free smokes here from Germany at the Coast Guard for $6.99 a carton...The CG makes a 20% profit so they must cost less than $5.00 from the producer...(tastes just like Marlboros) that's ten packs at about the cost of one taxed pack in NYC and where there is money to be made in these terms illegal activity will be right behind the move.

I know several people who buy online for about 1/3 the retail price. I bet the sales off those site will increase, as the tax money to the government shrinks

Then Obama, Reid, and Pelosi will whine how they need to cover the lost revenue buy raising income taxes, imposing new fees, and anything else they can think off to take more of our hard eanred money

[Classact]

I know several people who buy online for about 1/3 the retail price. I bet the sales off those site will increase, as the tax money to the government shrinks

Then Obama, Reid, and Pelosi will whine how they need to cover the lost revenue buy raising income taxes, imposing new fees, and anything else they can think off to take more of our hard eanred moneyFifty million adults smoke so I'll be interested to see the polls in a month or so once they pin the higher prices to the Democrats.