If You Tax Something, You Get Less of It, Part II

Exhibit A: Maryland's $2 a pack cigarette tax, see yesterday's post.

Exhibit B: Chicago's new bottled water tax, which has brought in just $2 million since going into effect on January 1 through the end of May, far off track for the $10.8 million Chicago city officials hoped it would raise this year, according to the Tax Foundation. As one retailer said, "There's no reason someone is gonna pay $1.20 extra in taxes for a $4 dollar case of water in Chicago when they can go to the suburbs to buy it without that tax."

Mayor Daley blamed the disappointing tax revenues on "the weather." Reminds me of how the Communists in the Soviet Union and China used to cite "bad weather" for the significant reductions in production after collective farms were imposed. I vaguely remember some story about the Soviets going from being a grain exporter before its farms were collectived by Stalin in the late 1920s and early 1930s, to having "50 straight years of bad weather" as the excuse for the disappointing production levels and even starvation resulting from Communist collectivization.

HT: Travis Walker