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
Years |
Collections |
1890 |
$1,100,000 |
1900 |
4,000,000 |
1910 |
7,900,000 |
1920 |
151,300,000 |
1930 |
359,800,000 |
1940 |
533,000,000 |
1950 |
1,242,800,000 |
1960 |
1,863,600.000 |
1970 |
2,036,100,000 |
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