Alabama Smokey Taxes

It is a neat twist of politics and business; it is a paradox that enables the Alabama State to collect more taxes. Interestingly, while the government in Alabama is spending more money to discourage people from smoking, it stealthily banks on cigarette taxes to fund its medical programs, prisons, mental health centers and other vital organs of government.

In fact, cigarette tax is amazingly the state third largest source of income on its general budget, surpassing even property taxes which rank fifth. It is expected that the state will collect approximately $182 million in cigarette taxes this year. It is not alone, however. Georgia is poised to collect about $247 million, Florida $452 million and Michigan a whapping $1.1 billion.

Results have indicated that efforts to discourage smoking have had little, if any effect at all, on the number of people who continues to smoke. In 2004, the Alabama Legislature and Gov. Bob Riley past a bill that raised taxes on cigarette from 16.5 cents a pack to 42.5 cents. This more than double increase in cigarette taxes had no effect on the general consumption of cigarettes in Alabama. Discouragingly, and yet, encouragingly, about one-fourth of Alabama adults were smoking prior to the tax hike and about the same amount after it: bad for health but good for the public purse. In addition to the cigarette taxes that Alabama government receives directly from smokers habit, it expects to harvest about $94.3 million this year from tobacco companies as part and parcel of the national tobacco settlement.

Other Usefull Tax Articles

Most Viewed Articles