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"State Cigarette Tax Yield Falling Short

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Proposition 10 raised the tax rate from 37 cents to 87 cents per pack,[179] and the MSA raised nationwide cigarette prices by nearly $250 billion over the next 25 years, or approximately 45 cents per pack.[180] The federal government then raised its rate 15 cents, first by a dime in January 2000 and then by a nickel in 2003, bringing the federal tax to 39 cents.[181] In 2006, California voters defeated Proposition 86, which would have increased the tax per pack from 87 cents to $3.47, the highest tax in the nation.[182] The combined effects of state and federal tax hikes during the past decade have made casual and commercial smugglers willing to skirt the law