Alabama's Cigarette Tax Article. The basic economic problem in this article is negative externalities. An externality occurs when there is a divergence between social and private costs and benefits.

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Cigarette Tax

Posted by admin on January 6, 2012

Two Democratic lawmakers filed a proposal to raise state Alabama's cigarette taxes, one of 32.5 cents per pack and other for $ 1 per pack, trying to fill what may be $ 400 million deficit in the state General Fund next fiscal year, according to News Birmingham.

State Representative Patricia Todd filed a bill that would raise the state tax from 42.5 cents cigarettes to 75 cents per pack, which will raise about 75 million dollars a year for the General Fund.

Todd cigarette tax increases every year since 2008, and each plan is dead, the report said. But some senior Republicans - the party is dominated by the state legislature - said they doubted the legislature to raise taxes on cigarettes in 2012 regular session.

But Todd said she thinks there is a 60 percent chance that the gloomy forecast of the budget for fiscal 2013 that begins Oct. 1, will motivate lawmakers to pass its proposed tax hike cigarette to alleviate what could be a sharp reduction in public services.

"I think we will have a better chance this year because of the