Friday, December 17, 2010

Unintended Consequences of Cigarette Taxes

 
Watch the video above from the Mackinac Center for Public Policy to find out how high and differential state cigarette taxes lead to smuggling, violence, counterfeit cigarettes, and many of the same unintended consequences as Prohibition against alcohol created in the 1920s and early 1930s. Read more here.

29 Comments:

At 12/17/2010 9:47 AM, Blogger juandos said...

Continued government interference in private lives and the fun never stops...

Cigarette Taxes in the News

 
At 12/17/2010 12:09 PM, Blogger geoih said...

The problem is not taxes, but this whole idea of prohibition of vice.

 
At 12/17/2010 12:21 PM, Blogger Walt G. said...

geoih,

How about if the externality costs of cigarettes are rolled :) into their price and we call it something else besides a tax?

 
At 12/17/2010 12:31 PM, Blogger Eric said...

And don't forget...millions of uninsured kids are counting on those cigarette sales.

 
At 12/17/2010 1:56 PM, Blogger Benjamin said...

This is brainless sniveling about cigarette taxes.

I orefer a lower level of taxes, and no taxes on work or investing, if possible.

Yes, there are sentiments that taxibng cigs is social engineering, and thus bad. But, then how is taxing work or investing better---taxing productive behavior strikes me as reverse social engineering.

We can cut taxes and have higher living standards if we eliminate parasites from our society, such as religious organizations, the ADA act and all connected to it, the military, and subsidized rural America.

Without subsidies rural America would blow away, but that is creative destructionism, and a good thing in my book.

Cig taxes? Pour it on baby, and leave those of us who work hard alone.

 
At 12/17/2010 2:00 PM, Blogger VangelV said...

This is brainless sniveling about cigarette taxes.

No. This is what happens when you put a high tax on an activity. You get a black market that develops and consumers buy the cheaper cigarettes with profits going to the people who break the laws in order to provide what consumers want.

 
At 12/17/2010 2:05 PM, Blogger bob wright said...

So do we then roll the externality costs into other products for an individual's habits and personal characteristics that have a social cost?

Why don't we add a tax to cars and light trucks for the externality costs of speeding and DUI. Why should I have to pay for cops to monitor someone else's driving?

Do we tax teenagers for dropping out of school or teenage pregnancies?

Do we tax parents for the exernality costs of divorce?

Do we tax people for not belonging to a health club - like we plan to "tax" them for not owning health insurance.

 
At 12/17/2010 2:24 PM, Blogger juandos said...

Driveling on, eh pseudo benny?

Meanwhile take a look at your state and the politicos you elect...

Personally I like bob wright's ideas of who and what to tax...:-)

"Why don't we add a tax to cars and light trucks for the externality costs of speeding and DUI"...

There are taxes, they're called traffic tickets...

Keeps lots of lawyers employed...:-)

 
At 12/17/2010 3:18 PM, Blogger VangelV said...

So do we then roll the externality costs into other products for an individual's habits and personal characteristics that have a social cost?

It would help if we ask people to pay for their own care rather than socialize the costs. You should not be paying for the bad habits of others by subsidizing their insurance premiums or paying for the extra services that they receive.

Why don't we add a tax to cars and light trucks for the externality costs of speeding and DUI.

You already do add much in the way of taxes and pay more whenever you fill up your car with gasoline.

Why should I have to pay for cops to monitor someone else's driving?

You shouldn't. Policing should be private and it should only concentrate on the activities that their employers would be willing to pay for.

Do we tax teenagers for dropping out of school or teenage pregnancies?

Some of our pro-tax friends use logic that suggests that we should.

Do we tax parents for the exernality costs of divorce?

What 'externality?'

Do we tax people for not belonging to a health club - like we plan to "tax" them for not owning health insurance.

Just wait. That will be next. We already have politicians calling for bans on fast foods, salt, etc., in certain settings and neigbourhoods. A health club tax is not as ridiculous as you may think.

 
At 12/17/2010 4:06 PM, Blogger bob wright said...

juandos,

"Why don't we add a tax to cars and light trucks for the externality costs of speeding and DUI"...

There are taxes, they're called traffic tickets...


Traffic Tickets - one pays for the misuse of a product.

People who smoke pay for smoking related health care - a speeding ticket of sorts for misuse of a product.

Smokers also pay a tax to purchase the product.

If speeding and DUI tickets are equivalent to the health care costs paid by the users of the product,
wouldn't sales taxes on cars and light trucks be comparable to the excise tax on cigarettes?

 
At 12/17/2010 5:16 PM, Blogger juandos said...

"Traffic Tickets - one pays for the misuse of a product"...

Misuse is in the eye of the extorter...

"People who smoke pay for smoking related health care"...

Ahhh, no they don't... Cig taxes aren't applied to cig smokers for 'their' related health care...

Did you not check Eric's link?

"Smokers also pay a tax to purchase the product"...

What isn't there an excise tax on?

"If speeding and DUI tickets are equivalent to the health care costs paid by the users of the product, wouldn't sales taxes on cars and light trucks be comparable to the excise tax on cigarettes?"...

No...

'If' there was a similer relationship vehicles would be considerably more expensive than they are now...

 
At 12/17/2010 8:38 PM, Blogger VangelV said...

Misuse is in the eye of the extorter...

Correct. Tickets can be extortion because many rules are arbitrary and impossible to follow all the time by any normal human being.

Ahhh, no they don't... Cig taxes aren't applied to cig smokers for 'their' related health care...

That is not the issue. The issue is that smokers pay more than their share through cigarette taxes. The fact that governments steal some of those taxes for purposes that have nothing to do with smoking related health care costs.

 
At 12/17/2010 8:56 PM, Blogger juandos said...

"The issue is that smokers pay more than their share through cigarette taxes. The fact that governments steal some of those taxes for purposes that have nothing to do with smoking related health care costs"...

Not disputing that one bit vangIV, what the complaint that I tend to hear is that, "now we have to pay for smokers' health care problems due to cigs"...

Well my response has always been if the goverment had left the cig tax in place for those who smoked then other taxes wouldn't have to be used...

Even that is lame since we know all government extortion goes into the 'general fund' regardless of what they might call this fund or that fund...

 
At 12/17/2010 9:00 PM, Blogger VangelV said...

Not disputing that one bit vangIV, what the complaint that I tend to hear is that, "now we have to pay for smokers' health care problems due to cigs"...

Well my response has always been if the goverment had left the cig tax in place for those who smoked then other taxes wouldn't have to be used...

Even that is lame since we know all government extortion goes into the 'general fund' regardless of what they might call this fund or that fund...


The government is clearly a thief that fleeces consumers and taxpayers to fund programs that are used to bribe voters to reelect politicians.

 
At 12/17/2010 9:17 PM, Blogger Rick said...

The crime problem with cigarette taxes parallels the problem with keeping Marijuana illegal. If there is a profit to be made, people will break the laws. If you want to prevent crime, remove the profit motive.
It makes you wonder how much states like New York make on these taxes vs. how much they spend trying to enforce the tax stamp laws.

 
At 12/17/2010 9:26 PM, Blogger VangelV said...

If you want to prevent crime, remove the profit motive.

People seek profits. The only way to lower profits is to allow competition that will shrink margins. But that is not compatible with making things illegal, which is why the Bootleggers and Baptists need each other.

http://tinyurl.com/2fxoyw

 
At 12/17/2010 9:35 PM, Blogger Benjamin said...

Crying like a bunch of little girls about cigarette taxes shows how intellectually bereft and corrupt the right-wing has become.
Oh, why don't you all form a circle, hold hands and sing "Kumbiyah" with fervent emotion for the long-suffering cigarette smokers. Oh, boo-hoo-hoo.

Sickly enough, cigarettes have become a cause celebre in right-wing circles as some pundists and commentators are paid off by tobacco interests, which being Southern, are heavily aligned with the Red States Socialists Empire.

 
At 12/17/2010 10:01 PM, Blogger VangelV said...

Sickly enough, cigarettes have become a cause celebre in right-wing circles as some pundists and commentators are paid off by tobacco interests, which being Southern, are heavily aligned with the Red States Socialists Empire.

The biggest supporters of cigarette taxes are found in the mob. They get themselves very high profits and take relatively low risks. Consumers benefit from smuggled products while politicians get to pretend that they care about healthcare rather than their own reelection campaigns.

 
At 12/17/2010 11:16 PM, Blogger Benjamin said...

Vange-
No, you are wrong.

When the mob and pols really want to make money, they outlaw something, or force people to get a license.

But taxing something. That's small potatoes.

The big money is in "illegal" drugs, or "licensed" professions such as law.

It's only R-Party wahoos in cigarettes, ding-dongs from the Carolinas etc.

Although when he was running for President, Bob Dole said, "Some people say cigarettes are bad for kids. But then, some people say milk is bad for kids too."

You gotta love the Red State Socialist Empire. We still subsidize tobacco farmers--and no, you will not hear Mitch McConnell ever decry that subsidy.

 
At 12/17/2010 11:20 PM, Blogger Benjamin said...

Tobacco Subsidies in the United States totaled $944 million from 1995-2009.

Jeez, nearly a billion dollars in subsidies given to tobacco farmers in about 15 years.

Odd, that Dr. Perry thought it wise to bash cigarette taxes twice, but not tobacco subsidies. I am sure tobacco industry influence in right-wing circles had nothing to do with it.

Just don't inhale my friends, just don't inhale.

 
At 12/18/2010 1:08 AM, Blogger Hydra said...

Urban America would not last a week without rural America.

When there is a problem, where do cities evacuate to?

 
At 12/18/2010 1:10 AM, Blogger Hydra said...

Leave those of us who work hard alone?

Try working on a farm some time.

 
At 12/18/2010 1:13 AM, Blogger Hydra said...

What do the cigarette taxes subsidize?

 
At 12/19/2010 2:02 PM, Blogger juandos said...

This comment has been removed by the author.

 
At 12/19/2010 2:04 PM, Blogger juandos said...

This comment has been removed by the author.

 
At 12/19/2010 2:25 PM, Blogger juandos said...

This comment has been removed by the author.

 
At 12/19/2010 2:48 PM, Blogger juandos said...

"Tobacco Subsidies in the United States totaled $944 million from 1995-2009"...

Well 'if' this site is correct then pseudo benny 'might' possibly be wrong but only in which particular years that there were subsidies for tobacco farming...

Could these subsidies be due to the shakedown of the tobacco companies?

 
At 12/21/2010 11:00 AM, Blogger VangelV said...

Well 'if' this site is correct
then pseudo benny 'might' possibly be wrong but only in which particular years that there were subsidies for tobacco farming...

Could this be do to the shakedown of the tobacco companies?


All subsidies need to be ended for everyone. The tobacco companies should be allowed to conduct their business without having the US government's hand in their pockets.

 
At 12/25/2010 11:19 AM, Blogger VangelV said...

When the mob and pols really want to make money, they outlaw something, or force people to get a license.

I take it that you are still under the delusion that the 'mob' has much of a say in specific legislation. The objective evidence suggests that is not the case. Parties and candidates are vague about where they stand on any particular issue and the minority of people who actually go to the polls have little clue what exactly they are voting for. During the process you have special interests gather together and write the legislation that most of the politicians that vote for it never read.

The reality is simple. You are ruled by a political elite that is always in place regardless of which party is in power. That is exactly why we need to neuter governments by reducing their power to trample on the rights of individuals.

But taxing something. That's small potatoes.

Except that it isn't. Whether you want to admit it or not it is a fact that tax policy influences economic activity.

The big money is in "illegal" drugs, or "licensed" professions such as law.

The money is always made by those that have monopoly privileges or cartels that are protected from competitors by legislation that does not permit those competitors to set up shop.

It's only R-Party wahoos in cigarettes, ding-dongs from the Carolinas etc.

Reference please. You are making no sense whatsoever.

Although when he was running for President, Bob Dole said, "Some people say cigarettes are bad for kids. But then, some people say milk is bad for kids too."

Dole was an idiot. Just like the people who ran against him.

You gotta love the Red State Socialist Empire. We still subsidize tobacco farmers--and no, you will not hear Mitch McConnell ever decry that subsidy.

Why would you expect the Republicans to be any different than the Democrats. Politics is a con game and attracts the worst of people. Voters are waking up to the fact that both parties stand for many evil and stupid policies. The Democrats swept into power and showed themselves to be absolute morons who are incapable of making good decisions. The Republicans are no different so I would not expect the next Congress to prevent the US from sliding into the abyss.

That said, it is very possible for the US to become the great nation that it used to be once again. All the voters need to do is to reject both parties at the polls and to insist that government is much smaller and much less intrusive. But don't hold your breath on that front. There are too many people like you for something like that to happen.

 

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