U.S. consumers spent $86.7 billion on tobacco products in 2003, about $1.5 billion less than in 2002. Overall, consumer expenditures are declining as lower consumption outweighs higher costs facing tobacco product users. About 94 percent of expenditures were for cigarettes. For cigarettes, a larger part of the consumer's dollar went to taxes and manufacturers, while whole- salers, retailers, and ... [Show full abstract] farmers took less. Since 1998, wholesale cigarette prices have jumped 122 percent and excise tax rates (Federal and State) have increased 74 percent. The farmer's share of the tobacco user's dollar declined from 1998-2003 because domestic cigarette consumption fell and use of imported tobacco increased. Gains in the manufacturers' share (due to higher wholesale prices) overwhelmed other share categories. Cigarette manufacturers raised prices partially to cover expenses incurred as a result of the Master Settlement Agreement.