Excise Taxes On Cigarette Consumption

1971 Words Nov 13th, 2014 8 Pages
One of the most prominent crops grown in the United States is tobacco. It has been grown and cultivated in the eastern portion of the United States since before this country’s conception. As a result, it was also one of the first goods to be taxed after the conception of this country. This tax would be the first excise tax that was introduced in the United States. It came as a portion of a tax package proposed in 1974 by the Secretary of the Treasury Alexander Hamilton. Since then, taxes on tobacco have come, gone, risen, and lowered. However, the reasoning behind the taxation changed from increasing government revenue to deterring consumption with the publication of the 1964 U.S. Surgeon General’s Report on Smoking and Health. In this report, the U.S. Surgeon General established that cigarette smoking is, “a cause of lung cancer and laryngeal cancer in men, a probable cause of lung cancer in woman, and the most important cause of chronic bronchitis. The proposed paper will investigate the relevancy of excise taxes on cigarette consumption, the act of cigarette consumption, and the most prominent method used to lower it by the U.S. government. This method called an excise tax, or informally a sin tax, is a tax issued by the government to be built into the price of a good or service to dissuade consumption. Through analyzing the data and experiments of top contributors to this subject, one will perceive how this method impacts cigarette consumption, if at all, and…
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