Posted on 01/30/2015 8:32:55 AM PST by MichCapCon
News reports today tell of a Macomb County tobacco store burglary by four men who stole cigarettes and escaped capture after a police chase. This unlawful behavior is a direct and unintended consequence of the high excise taxes imposed on Michigan cigarettes ($2 per pack) statewide.
There are other unintended consequences too. Mackinac Center analysts estimate that 25 percent of all the cigarettes consumed in the Great Lake State in 2013 were smuggled in from other states. Revenue losses to the treasury from smuggling total $298 million.
High tobacco taxes lead to violence against police, property and people in addition to smuggling.
In late 2013, police officers in Warren had to shoot smoke shop thieves as they attempted to make their getaway with $10,000 worth of tobacco merchandise. “It happens all the time” one police officer said. She said tobacco stores are “targeted.” Wholesalers are sometimes targeted too.
The reason they are targeted is that thieves know cigarettes have value in part due to the high excise taxes imposed on them. Once stolen, they are easily passed off as legitimate smokes elsewhere and sold to other (illicit) distributors or directly to smokers.
There are several ways to address the problems associated with illegal trafficking: cut excise taxes, increase law enforcement efforts or some combination of both.
I disagree with the assertion that these consequences are unintended.
Eric Garner is one of those unintended consequences.
The same thing will happen with pot if we legalize it, then tax it heavily.
I'm guessing Michigan will opt for more law enforcement.
Yeah, I’d much rather go to jail than pay taxes.
Revenue they didn’t get is not a revenue “loss.” hey would not have gotten all that revenue if no cigarettes had been smuggled. People would have bought fewer. There is a limit to what people have in their pockets and bank accounts. People who don’t work and pay state income taxes should be prosecuted for the revenue loss to the state government. The state could calculate its income tax revenue loss based on the supposition that people are illegally working for less than the highest salary in the state.
Cigarette taxes are the most regressive taxes against the poor, along with the lottery. And just wait until the California egg smuggling starts. They are just training people to accept the underground economy.
And for all the “insane” profits the tobacco companies make, government makes more in taxes on those death sticks.
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