The
Tax Bite
on Everyday Products….CIGARETTES
Taxes Take
82% of the Price of Cigarettes
About 82%
of what consumers pay for a pack of cigarettes ends up going to the
government in taxes and other payments rather than for the cigarettes.
Based on
the most recent available data, the average total price for a pack
of cigarettes in the U.S. is now $3.73. Only about 8 cents of that
goes to the farmer for the tobacco. About 28 cents goes to the manufacturer
in profits.
But about
84 cents goes for special Federal, state and local excise taxes imposed
on cigarettes. Another 16 cents goes to pay regular state sales taxes.
In addition, another 45 cents of the total goes in payments to the
states and their lawyers as compensation for their supposed costs
resulting from smoking related illnesses. The states are primarily
just spending that money now in their general budgets.
And that is
not all. The cigarette manufacturer pays about 76 cents on taxes assessed
at the corporate level, including corporate income taxes, property
taxes, payroll taxes, etc. Then there are the taxes paid by the wholesalers,
the retailers, the warehouses, and the taxes embodied in the products
the manufacturer uses to make the cigarettes. This consumes another
87 cents of the money the consumer pays for the cigarette pack.
Altogether
then about 82% of the $3.73 the consumer pays for the pack of cigarettes
ends up flowing down in taxes or other payments to the government.
