As most everyone knows by now, the federal smoker’s tax went up last week. The tax charged to cigarette manufacturers went up from 39 cents per pack to $1.01. Large cigars are now taxed 40 cents each, up from 5 cents. Pipe-tobacco taxes rose from $1.10 to $2.83. The tax on chewing tobacco will increase from 19 cents per pound to 50 cents per pound. Taxes on “roll-your-own” loose tobacco saw a meteoric rise–from $1.09 per pound to $24.78, an increase of more than 2,000 percent. This is easily the largest single increase in federal tobacco taxes in the history of the United States.
Unfortunately, this is not even a flat-tax–it is very regressive. The poorest people tend to buy the larger portion of cigarettes. Let us hope that policymakers stop listening to special interests concerning the cigarette tax and instead look at the data: The cigarette tax does not deter cigarette use and it hurts the poor.