Georgia Tobacco Tax Favors High-Income Counties

February 18, 2010

A new Tax Foundation report shows that Georgia’s tobacco tax benefits high-income counties the most by transferring funds to them in the form of state services from lower-income areas. Residents of the Cobb-Douglas health district, whose incomes are 20 percent higher than elsewhere in the state, received $1.29 in state services for every $1 its residents paid in cigarette taxes, for a total transfer of $4.2 million.

In the Fulton health district, where the average income is 60 percent higher than in the rest of the state, residents received $1.26 for every $1 in cigarette taxes paid, for a total transfer of $4.7 million. Georgia’s cigarette tax rate is 37 cents per pack.

The Northwest health district loses the most in the funds transfer: Its residents received 78 cents in benefits for every $1 paid in cigarette taxes, for a total loss of $3.8 million. The next-biggest “loser” was the North Georgia health district, whose residents received 82 cents for every $1 in cigarette taxes paid, for a total loss of $2.1 million.

For more information, see the full Tax Foundation Fiscal Fact, No. 211¸ “Georgia Tobacco Tax Favors High-Income Counties,” authored by Chief Economist Patrick Fleenor.

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