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Essay text:
However significant increases have been realized with cigarette excise tax even in major tobacco producing states such as Kentucky, where historically they have been extremely low due to the economic influence of tobacco producers. Tobacco excise taxes for cigarettes are levied on the producers of the product, usually in the form of tax stamps affixed to the individual packs of cigarettes. These taxes are then handed down to the consumer in the form of price increases for the product.
According to Gustafson (2007) upon passage of substantial increases in cigarette taxes, a marked increase in the sale of tax stamps occur immediately before the enacting date of the new tax rate, followed by a dramatic decrease in the sale of tax stamps after the tax rate increases...
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