There is an interesting comparison here.
I live in Germany...the mega tax state. They use taxes not only to raise revenue, but to curb unhealthily lifestyles. So when the Greens came up in power seven years ago...they demanded to head the health ministry as part of that government structure. On their plate...was a tax increase for smokes...a two-part deal...both rather huge increases...over four years.
The tax revenue arm of the government was very happy and supported the measure...more taxes...more revenue. So the two groups pushed through the increase. Two years go by with the first increase, and suddenly the revenue guys announce that they are $500 million less than where they should be for the tax year, with the smokes tax. Chaos and emergency meetings occur...with the revenue guys in a difficult position...the new additional tax is six months away from enacting and they are losing alot of cash.
The Greens are purely happy...so are the anti-smoking nuts. They really believe that the less revenue and less sales indicate that they are finally making a difference.
The revenue guys go out and ask alot of questions. The customs folks finally tell them that there has been a huge increase in people shopping outside of Germany....in Poland, Czech, France, and Luxembourg over the past year. The customs guys are busting folks weekly for bringing in tons of smokes...illegally...more than ever before. By the time the revenue guys add up what the customs folks estimate is legally brought in (four cartons per day per person), and the illegal confiscation...they realize that a huge portion of their taxable assets is gone. They quickly act to halt phase two of the massive tax increase on smokes...which does not become law.
So today...if you live within 75 miles of the Luxembourg border (as I do)...and you need smokes (as my wife does)...then you drive over each quarter (to pick up my four and her four...all for her of course). We save 30 percent over what the German tax guy demands...plus we buy coffee and booze...usually at a 15 percent savings.
So for those folks in Louisiana....I'd put up smoke shops...right by the interstate entrance...and help them poor Texans out. Texas will discover in two years...that sales are down...which they will readily attribute to lower smoking numbers. Don't believe the story for one moment.
If you live within 75 miles of...almost nowhere in Texas is within 75 miles of anything. Texas is 900 miles across. I used to be in the trucking business and there was a saying, "The sun has riz, the sun has set, and I am still in Texas yet." You can't make it from one side to the other during daylight hours in a day.
I am a smoker and buy my cigarettes from an Indian reservation in NM. I don't pay ANY state taxes.
posted on 12/09/2006 10:55:53 PM PST
(This comment is brought to you by the letter "C")
posted on 12/09/2006 11:51:21 PM PST
(When you are there thats the best)
Great post! This is exactly what always happens. Somebody is going to meet the consumer's price, whether that somebody is a lower-tax jurisdiction, a black market, Chinese slave labor, a tax-free Indian reservation or an internet smokeshop. After a hundred years of this endlessly repeating pattern, these morons in government still haven't learned that.
In 2000 my wife and I honeymooned in FR, GR and Lux. Often wondered what Lux's main industry was, besides pastry and perfume.
Best breakfast in Eur, GR
Here in NH we suck the business from MA, cigs, better airport, no sales tax, no income tax. Expect all that to halt with the recent election of the Libs.
posted on 12/10/2006 3:05:38 AM PST
(The night has a thousand eyes)
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson