The nation's first federal cigarette tax was enacted in 1864 as a Civil War revenue measure. In 2005 the federal cigarette tax stood at 37 cents per pack. The nation's first state-level cigarette excise tax was enacted in Iowa in 1921. By 1969 all 50 U.S. states had followed suit. In 2005 state-level cigarette taxes ranged from 7 cents per pack in South Carolina to $2.46 per pack in Rhode Island. The wide variety of state cigarette excise taxes provides opportunities for consumers to shop for bargains across borders—and for smugglers to make substantial profits.
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Idaho officials believe not enough businesses are looking at their state when deciding to expand or relocate. Unfortunately, the proposed solution (PDF) – a new jobs tax credit – is unlikely to be the fix.
One of the more compelling reasons to pursue tax reform is the fact that the U.S. has the highest corporate tax rate in the developed world. Another compelling reason is that U.S. multinational corporations (MNCs) must...