In the United States, cigarettes are taxed at federal and state levels, in addition to state and local sales taxes as well as local specialty taxes. Taxation of cigarettes has emerged throughout American history and is still a contentious issue today.
Video Cigarette taxes in the United States
Histori
Although cigarettes were unpopular in the United States until the mid-19th century, the federal government is still trying to impose a tax on tobacco products from the beginning in its history. In 1794, treasury secretary Alexander Hamilton introduced the first federal tax excise on tobacco products. Hamilton's original proposal passed after major modifications, only to be revoked shortly thereafter with insignificant effects on the federal budget. Although Hamilton's taxes on tobacco failed, tobacco taxation continues to play an important role in American history.
On July 1, 1862, the United States Congress passed an excise tax on many goods including tobacco. This occurred as a result of increased Union debt during the American Civil War and the Federal government's need for additional revenue. After the war, many excise taxes were revoked but taxes on tobacco remained. In fact, in 1868, the main source of government revenues came from the remaining tobacco taxes.
Despite excise taxes from the Federal government, states do not ratify tobacco excise taxes until entering the 20th century. In 1921, Iowa became the first state to issue state-level tobacco excise taxes other than federal taxes. Other countries quickly followed suit, and in 1950, 40 states and Washington D.C. impose a tobacco sales tax.
By 1969, all US states, the District of Columbia, and the region had applied cigarette taxes. Some cities like Chicago and New York City also apply cigarette taxes throughout their city. The federal, state, local, and local federal tax on a pack of twenty cigarettes in Chicago, in Cook County, Illinois, was $ 7.42, the highest in the whole country. The lowest rate in this country in Missouri, at 17 cents, where country voters chose to remain that way in 2002, 2006, and 2012.
Maps Cigarette taxes in the United States
Under the Obama Administration
On February 4, 2009, the Children's Health Insurance Reinshorization Act of 2009 was signed into law, which raised the federal tax rate on cigarettes on April 1, 2009 from $ 0.39 per pack to $ 1.01 per pack. This increase to help cover coverage costs under the State Children's Health Insurance Program (SCHIP).
One of the biggest criticisms of the bill came from the United States for Tax Reforms that it feared would lead to lower state tax revenues. According to Nobel Prize-winning economist Gary Becker, who has studied the long-term price elasticity of cigarettes, the tax increase as a result of the Reauthorization Act of the Children's Health Insurance Program raises the price of cigarettes by 13.3% which ultimately means a 10.6% decrease. in unit sales. The National Tax Foundation calculates these figures to determine the estimated $ 1 billion loss for the state. Another argument against the bill claims that it is regressive, holding that tax increases unfairly target the poor because according to the Centers for Disease Control and Prevention (CDC) more than half of all low-income smokers. 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 with a greater percentage of high-income smokers, and thus reduce the socio-smoking gap Furthermore, low-income communities also suffer from tobacco-related diseases at a much higher rate than their higher-income counterparts.
In a study conducted on behalf of the New York State Department of Health, it was revealed that low-income smokers (who in households earned under $ 30,000) spent an average of 23.6% of their annual household income on cigarettes, compared with 2.2% for smokers in households earns more than $ 60,000.
Effects on smoking level
One reason for supporting the increase in tobacco taxes among public health officials is that many studies show that this leads to a decrease in smoking rates. The relationship between smoking and cigarette tax rates follows the nature of elasticity; the greater the amount of tax increases, the fewer cigarettes purchased and consumed. This is especially true among teenagers. For every ten percent increase in the price of a pack of cigarettes, the overall teen smoking rate drops by about seven percent. This figure also applies to minorities and low-income residents of smokers. The call rates for hot-line stops are directly related to the cigarette tax increase. When Wisconsin raised the state tobacco tax to $ 1.00 per pack, the hot-line received a record 20,000 calls within a period of two months compared to 9,000 common calls each year.
The analysis of smoking and tobacco tax rates in 1955 to 1964, before the first Surgeon General report and general anti-spurt sentiment, showed the same relationship between tax increases and the current prevalence of smoking levels, suggesting that popular attitudes toward smoking are not confounding factors. Tobacco taxes also resulted in a significant increase in public health, and arguments about the alleged adverse economic impact of the tax tended to be unsupported.
In 2012, RTI International analyzed data from 2010-2011 New York and the national Adult Tobacco Survey to assess the financial burden of cigarette taxes on low-income families for the New York State Department of Health. According to ABC News, the study found that "higher cigarette taxes could financially hurt low-income smokers than make them more likely to quit." Among the 13,000 surveyed in New York State, low-income smokers spend 23.6 percent of their income on cigarettes, compared with two percent by New Yorkers who earn higher and average 14 percent among nationally low-income smokers.
Taxes as a proportion of cigarette prices
While cigarette prices have been rising since 1965, the percentage of the price to taxes is now half that of what happened at the time. In 2011, Phillip Morris listed total government revenue, including federal, state, local, and sales taxes, as 55% of the estimated retail price of a pack of cigarettes in the US.
According to World Health Organization data on cigarette taxes worldwide, the US is ranked 36th out of the 50 most populous countries in terms of percentage of cigarette packets cost of taxes. Their data estimate that taxes make up 42.5% of the cost of a pack of cigarettes in the US, compared with 82.2% in the UK, which has the highest cigarette tax.
Country cigarette tax rate
The following table lists state and territory tax rates (as of April 1, 2017):
The table above excludes federal excise taxes on cigarettes of $ 1.01 per pack, cigarette taxes levied by each municipality (such as New York City, Chicago, and Anchorage), or sales tax levied in addition to retail and excise taxes.
Smuggling
Countries with high taxes often have smuggled cigarettes from countries with lower taxes and black markets created. The Tax Foundation estimates that New York state lost about $ 1.63 billion for black market sales.
Non-smoking tobacco tax
Taxes on smokeless tobacco (chewing), as well as (and often together) tobacco, cigar and pipe tobacco, are also common in the United States. Forty-nine states and the District of Columbia have non-cigarette taxes (es), Pennsylvania as the only exception, have no smoke or no cigar taxes at all (though consider a small cigar as a cigarette for tax purposes). Of the 49 countries that apply in this category, Florida does not tax cigars, though all other tobacco products are taxed. The US federal government collects different non-smoking duty taxes, according to the following 6 categories: tobacco, chewing tobacco, pipe tobacco, your own rolls, large cigars, and small cigars. Cigarette paper and tubes are also taxed. In 2014, a small number of states in the US have enforced regulations allowing e-cigarettes to be taxed as tobacco products.
See also
- The Revenue Act of 1862
- Cigarette # Tax
- Smoking tobacco # Taxation
- Stop Tobacco Smuggling under the Act of 2013
- Excise tax in the United States
References
Source of the article : Wikipedia
0 Comments