Where Does the Tax Revenue From Cigarette Sales Go?
Smoking is a deadly, addictive habit. This deadly addiction brings billions of dollars of tax revenue to the federal, state and local governments. On an annual basis, the federal government collects $7 billion dollars of tax revenue from cigarette sales.
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Federal
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One of the beneficiaries of tax revenue from cigarette sales is the federal government. The revenue goes directly to help fund the Children's Health Insurance Program; it's a program that helps uninsured, low-income families provide healthcare services for their children.
State
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The latest U.S. Census State and Local revenue data of 2008 indicated that states amassed $16 billion dollars in taxes from cigarette sales. The revenue obtained from the taxes goes directly to balance states' budgets and fund state healthcare programs.
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Local
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Many municipalities impose cigarette taxes at the local level. The revenue goes into the localities' general funds for various local projects, such as road maintenance and school renovations.
Non-Smoking Campaigns
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Tax revenue from cigarette sales goes to fund various anti-smoking campaigns targeting youth. Revenue from local funds is used to fund tobacco prevention and cessation programs.
Healthcare
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Many prevention and cessation programs come from tax revenue from cigarette sales. These programs curtail healthcare costs by encouraging smokers to quit.
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References
- Alcohol and Tobacco Tax and Trade Bureau: Program Summary By Budget Activity
- U.S. Census: State Tax Census
- Campaign for Tabacco Free Kids: State Tobacco Taxes
- Centers for Medicare and Medicaid Services: The Children's Health Insurance Program (CHIP)
- "The New York Times"; Government Gets Hooked on Tobacco Tax Billions; Stephanie Saul; August 2008
