The federal authorities generally explain the high cigarette taxes as a means of reducing the consumption of cigarette, with the ultimate aim of reducing the number of smokers and protecting the health of the individuals. Nevertheless, fact remains that the fares carry a major economic function -- that of gathering money for the state budget. This positive effect on the federal budget has however yet to be observed, as history has shown us that increased taxes reduce demand, rather than create additional income. The situation with the promoted social impact is also blurred, as I believe is the entire debate over smoking and its economic and social implications.

References:

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