Cigarette tax increases can lead to more households using food stamps


For the past 20 years, local and state governments across the U.S. have increased cigarette taxes to raise billions for their revenues and to dissuade people from smoking.

But a study shows this practice may have an unintended consequence. In the households the study looked at, the tax increase also increased the probability of households applying for food assistance programs.

SEE MORE: A Republican Suggests Cutting Food Stamps To Fund The Border 'Wall'

RELATED: When Doctors Pushed Cigarettes—20 Absurd Ads

21 PHOTOS
When Doctors Pushed Cigarettes—20 Absurd Ads
See Gallery
When Doctors Pushed Cigarettes—20 Absurd Ads
UNITED STATES - JUNE 16: Jody Reavis, an employee of R.J. Reynolds Tobacco Co., a unit of Reynolds American Inc., smokes a cigarette during a demonstration against a proposal to raise cigarette taxes in Raleigh, North Carolina, U.S., on Tuesday, June 16, 2009. North Carolina, which grows the most tobacco in the U.S. and is home to Reynolds and Lorillard Inc., is one of at least 25 states where legislators are considering an increase in cigarette taxes to cover budget shortfalls. Reynolds is the second-largest U.S. tobacco company with brands such as Camel, Pall Mall, Kool, Winston, and Doral. (Photo by Jim R. Bounds/Bloomberg via Getty Images)
UNITED STATES - JUNE 16: Victoria Gordon, an employee of R.J. Reynolds Tobacco Co., a unit of Reynolds American Inc., smokes a Salem cigarette during a demonstration against a proposal to raise cigarette taxes in Raleigh, North Carolina, U.S., on Tuesday, June 16, 2009. North Carolina, which grows the most tobacco in the U.S. and is home to Reynolds and Lorillard Inc., is one of at least 25 states where legislators are considering an increase in cigarette taxes to cover budget shortfalls. Reynolds is the second-largest U.S. tobacco company with brands such as Camel, Pall Mall, Kool, Winston, and Doral. (Photo by Jim R. Bounds/Bloomberg via Getty Images)
HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

Researchers looked at consumer data from smoking and non-smoking households and found the average tax increase of 56 cents made a food stamp-eligible smoking household 7 percent more likely to apply for assistance.

The average smoking household in the study went through about 22 packs per month. That's an $18 increase in monthly smoking costs per $1 increase in taxes.

This also could cause problems for the federal government. While local or state governments determine most cigarette taxes, food assistance programs exist at the federal level. So, even though local governments are making money, the federal government ends up footing the bill.


What is a CPA (Certified Public Accountant)?

A CPA (Certified Public Accountant) is an accounting professional licensed and credentialed by a state or territory to offer accounting services, including tax preparation, to the public.

Read More

Brought to you by TurboTax.com

How to File an Amended Return with the IRS

If you've made an error on a tax return you already filed or simply come across new information, such as a tax deduction or credit you now realize you qualify for, file an amended tax return to make the correction. The Internal Revenue Service (IRS) knows the tax code is complex, and that people make mistakes. The process for filing an amendment is straightforward. Simply file Form 1040X, Amended Tax Return, along with the corrected or additional documents you did not originally file with your return.

Read More

Brought to you by TurboTax.com

2018 Tax Reform Impact: What You Should Know

Congress has passed the largest piece of tax reform legislation in more than three decades. The bill went into place on January 1, 2018, which means that it will affect the taxes of most taxpayers for the 2018 tax year.

Read More

Brought to you by TurboTax.com

10 Things You Won't Believe Are Taxed

From Fantasy Football to cancelled debt, here are 10 things taxed by the IRS that might surprise you.

Read More

Brought to you by TurboTax.com
Read Full Story
Your resource on tax filing
Tax season is here! Check out the Tax Center on AOL Finance for all the tips and tools you need to maximize your return.

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.