National Commission on Marihuana and Drug Abuse

History of Tobacco Regulation*

TOBACCO REVENUES

A peculiar relationship exists between production and revenue. In 1970, cash receipts from tobacco brought in $11 million for Pennsylvania; tobacco farmers and cigarette taxes amassed $194.6 million for the state. By comparison growers in North Carolina collected $576 million while the state collected only $13.4 million in cigarette revenues (USDA, Tobacco Situation, 1971b: 43).

The federal excise tax on a package of cigarettes is currently eight cents and has remained so since 1951. The combined state and federal tax was highest in Pennsylvania; 26 cents for 20 cigarettes, which was 58.2% of the retail price. Connecticut's 24 cents and Texas's 23.5 cents were close behind; the average for the United States was 46.8%.

To the Federal and state governments today, tobacco is a financial asset. The total federal and state revenue collected f rom all tobacco products in 1971 amounted to over $4.7 billion. Local governments excised the product further bringing the sum total to $4.8 million (USDA, Tobacco Situation, 1971b: 44).

From the years 1890 to 1930 cigarette tax collections from tobacco soared from approximately $1 million to over $339 million. By 1950, they exceeded $1.2 billion.

Totals for the years 1890 to 1970 are recorded in the following chart (Tobacco Tax Council, 1970: 5)

Cigarette tax