By increasing taxes on tobacco, of course.
REGULATION FOR REVENUE
Alexander Hamilton's tax package of 1794 proposed the first federal excise taxes upon tobacco products. To the distress of Philadelphia snuff manufacturers (Brooks, 1952: 146), however, the tax was restricted after serious Congressional debate to their product only.
James Madison led the opposition to a general tobacco tax; his views were summarized in the Annals of Congress on May 2, 1794:
As to the subject before the House, it was proper to choose taxes the least unequal. Tobacco excise was a burden the most unequal. It fell upon the poor, upon the sailors, day-laborers, and other people of these classes, while the rich will often escape it (Robert, 1949: 100).
The legislative decision was probably tempered as well by considerations of the enforceability of the measure: snuff had to be manufactured, while quid and pipe tobacco were often homegrown leaf at the time (Heimann, 1960: 155). In any case, the snuff bill was ultimately enacted, modified, suspended and repealed, with small, if any, effect upon federal revenues.
The opportunity to distill tax money from tobacco was seized upon more vigorously at the time of the Civil War. On July 1, 1862, an ad valorem tax was imposed upon cigars for the first time. This tax was raised two years later when a separate tax upon cigarettes was also imposed (Werner, 1922: 358). (Even the Confederacy sought to levy a tax-in-kind upon tobacco crops, but was precluded from doing so by the inspection system which required the inspector to deliver the full amount of tobacco specified in the warehouse receipt (Robert, 1949: 117).)
Thereafter, the taxes were raised in 1865, 1866 and 1875. A temporary reduction followed, until the Spanish-American War necessitated further increases. Concurrently, taxes were levied upon smoking and manufactured tobacco and snuff, lest the burden fall unequally upon smokers (Werner, 1922: 559).
By 1880, the tobacco taxes bad largely stabilized. At that time, they accounted for 31% of total federal tax receipts, or $38.9 million. Of this, 50% of the collections was derived from smoking and chewing tobacco, 40% from cigars and cheroots, and less than 2% from cigarettes (Heimann, 1960: 156).
Since that time, federal tax collections on tobacco products have risen almost annually. Between 1910 and 1920, they increased more than 500%, the greatest increase in any single decade. By 1970, they accounted for almost $2.1 billion, down slightly from the two preceding years (Tobacco Tax Council, 1970: 5).
Indicative of changing patterns of consumption, the taxes on cigarettes, as a percentage of the total federal tobacco revenue jumped from 13.6% in 1910 to 51.1% in 1920. By 1970, the percentage at 97.2% far outdistanced those revenues derived from other forms of the product (Tobacco Tax Council, 1970: 5).
Excise taxes have proved profitable and easy to collect. The revenue schemes are simple on both the federal (26 U.S.C. 5701 et seq.) and state levels. In the past, no justification for them has been deemed necessary since Madison's protest. No elaborate licensing or state monopoly system, such as those designed to control commerce in alcohol, has ever been imposed.
In 1921, Iowa became the first state to cash in on the crop directly by taxing cigarettes. By 1930, 11 other states had adopted the revenue measure (Robert, 1949: 256).
In 1950, 40 states and the District of Columbia taxed cigarettes. The rates ranged from one cent to five cents for a pack of 20 except in Louisiana which levied an eight cent tax on cigarettes. In 1958, Montana imposed an equivalent rate.
Between 1950 and 1962, 43 of the 47 taxing states raised their rates at least once. The frequent increase in cigarette taxes narrowed the gap between the rates in low tax states and higher tax states. In the 12-year period, the median tax rate rose from three cents to six cents per pack (Federal Trade Commission, 1970: 3) ; the maximum rate remained at eight cents in Texas, Louisiana, Montana and New Mexico, in contrast to the two cent rate in the District of Columbia and Kentucky.
The four leading states in terms of both production and relative dependence on the crop have been North Carolina, South Carolina, Kentucky and Virginia, the latter two being the only states in the history of cigarette taxation to decrease their taxes; the reduction was only .5 cent (from three cents to two and a half cents) in 1960 and 1961, respectively.
By 1966, Oregon became the 49th state to impose a tax on cigarettes; the rate was four cents per pack. Finally, in 1969 North Carolina imposed a cigarette tax-two cents.
The cigarette excise taxes continued to increase during the sixties. By 1970, the taxes ranged from North Carolina's two cents to Pennsylvania's 18 cents for a weighted average of 10.7 cents. Twenty nine states levied taxes of 10 cents or more per pack (USDA, Tobacco Situation, 1971b: 40). Local governments superimposed further excise taxes on the state taxes, ranging from one cent to 10 cents per package (Tobacco Tax Council, 1970: iv).
By mid-1971, the range had widened further Connecticut at 21 cents and North Carolina at two cents, the weighted average state tax being 11.1 cents (USDA, Tobacco Situation , 1971a: 7).
TOBACCO REVENUES
A peculiar relationship exists between production and revenue. In 1970, cash receipts from tobacco brought in $11 million for Pennsylvania; tobacco farmers and cigarette taxes amassed $194.6 million for the state. By comparison growers in North Carolina collected $576 million while the state collected only $13.4 million in cigarette revenues (USDA, Tobacco Situation, 1971b: 43).
The federal excise tax on a package of cigarettes is currently eight cents and has remained so since 1951. The combined state and federal tax was highest in Pennsylvania; 26 cents for 20 cigarettes, which was 58.2% of the retail price. Connecticut's 24 cents and Texas's 23.5 cents were close behind; the average for the United States was 46.8%.
To the Federal and state governments today, tobacco is a financial asset. The total federal and state revenue collected f rom all tobacco products in 1971 amounted to over $4.7 billion. Local governments excised the product further bringing the sum total to $4.8 million (USDA, Tobacco Situation, 1971b: 44).
From the years 1890 to 1930 cigarette tax collections from tobacco soared from approximately $1 million to over $339 million. By 1950, they exceeded $1.2 billion.
Totals for the years 1890 to 1970 are recorded in the following chart (Tobacco Tax Council, 1970: 5)
Cigarette tax
| Years | Collections |
| 1890 | $1,100,000 |
| 1900 | 4,000,000 |
| 1910 | 7,900,000 |
| 1920 | 151,300,000 |
| 1930 | 359,800,000 |
| 1940 | 533,000,000 |
| 1950 | 1,242,800,000 |
| 1960 | 1,863,600.000 |
| 1970 | 2,036,100,000 |
Also, your response is wrong anyways.. Government didn'tt cause people and society to increasingly prosper. People and society prospered because people labored. Be it scientists or farmers or any other business that filled a market need.
If it weren't for the workers being nice enough to sell their goods and services to politicians and bureaucrats they would perish. Parasitical elites don't produce net values--goods and services. They drain values from people and society. Ostracism is on the way.
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*FWIW, Taxes and user fees are good when they are truly voluntary -- such as the FairTax -- and the money is used for the primary purpose off government -- he only valid function and purpose of government is to protect individual life and property rights and ensure private contracts are honored.