Because cigarette and alcohol taxes are built into the prices of these products, many people don’t even know they’re paying them. But what if…there were no taxes on those products?
1864: A box of 20 cigarettes was taxed at 0.8 cents. By 2012, the average number of packs bought by individuals in a year was 48
Federal, state, and municipal excise taxes on cigarettes for the FY ending June 30, 2011, amounted to nearly $33.3 billion, or approximately $106.5 per capita.
IF THERE WERE NO TAXES: Subtract $107 from your total cigarette bill.
WOW: In 2010 alone, states with high tobacco taxes lost about $5 billion in revenue because of cigarette smuggling, according to the Bureau of Alcohol Tobacco Firearms and Explosives. Experts say the number is climbing.
With the exception of labeling, advertising and containers, the federal government does not enforce laws about selling or serving spirits, wine or beer to consumers. Usually, State governments regulate persons selling or serving spirits, wine or beer to consumers.
Spirits, wine and beer are each taxed at different rates by both the federal and state governments. Alcohol is taxed by volume with different rates applying to beer, wine and liquor (with additional distinctions among wines by alcohol content). There is some crude proportionality to the amount of alcohol in the drink, but it is not exact. $7.6 billion: annual revenue to federal government paid out by alcohol beverage industry.
Source: Accounting School Guide
