Blogs » A Constitutionalist & Believer in Natural Law » Will Tobacco Tax Kill The Goose?


The congressional SCHIP bill signed by President Obama on February 4, 2009 included an increase in the federal tobacco tax, mostly from an increase in the federal tax by 61.66 cents per pack of cigarettes. This will create an additional sales tax of about 5.24 cents per pack in most Texas communities.

The tax increase also will apply in different rates to items like snuff, chewing tobacco, cigars, pipe tobacco and tobacco for roll-your-own cigarettes from 50.33 cents per pound of chewing tobacco to $24.78 per pound of roll-your-own cigarette tobacco. Wow, that is a major tax increase. Texas tobacco taxes are the seventh highest in the country. The federal tax on a pack of cigarettes will be $1.00 and then when you add the Texas tax of $1.41 per pack, the total will be about $2.42 per pack before sales tax. Add the cost to the seller’s cost and the sales tax on top of that; it is possible that a single pack of cigarettes will cost $6-8 dollars a pack.

The cost to retailers to carry the extra expensive in their inventory, may cause many small convenience stores to eliminate this sales item. Add on the increased loss to thief, many may close their doors. According to the American Lung Association, statistics indicate that each 10 percent increase in cigarette taxes results in a 7 percent decrease in youth smoking rates. So that will be a good thing.

Will the strain on the budgets of many families in this time of economical downturn; one must wonder how many people will finally quit using tobacco or if they will be criminals and purchase smuggled products killing the goose that provided the tax revenue.