INDEX
- Wisconsin Gubernatorial Candidate Scott Walker Signs Taxpayer Protection Pledge
- Why Do We Get Health Insurance from Our Employers Anyway? (ASA Site »)
- The Enormous Price Tag of Government Run Healthcare (ASA Site »)
- Call for Sunshine Week: "Just Give Us The Earmark Data" (CFA Site »)
- PA-12 Special Election Update: Tim Burns Signs the Taxpayer Protection Pledge
- How Government Accounting Works
- ATRF Analysis: The Importance of International Tax Competition
- How Tax Preparation "Simplification" Will Lead to Tax Hikes
- GAO: Implementation of Coburn-Obama Still Lacking in Some Areas (CFA Site »)
Monday, March 15, 2010
- Latest Developments In The Fight To Stop A Govt Internet Takeover
- State of Illinois Launches Sunshine Portal (CFA Site »)
- China Buys Our Debt, We Give Them Renewable Energy Stimulus Jobs...Seems About Right
- ATR Urges Governor McDonnell to Sign Bill to Abolish State Run Tax Filing
- Saving the Sea Turtles...But at What Cost? (PRA Site »)
- Craig Miller Signs Taxpayer Protection Pledge in FL-24
- Next Week is Sunshine Week! (CFA Site »)
- The Economics of #StimulusFail
- Missouri Unions and Andy Stern on the Same Page: Raise Taxes (AWF Site »)
- Obamacare, Free Trade, & Our Economic Prosperity
Friday, March 12, 2010
- Rusty Bowers Signs the Taxpayer Protection Pledge for AZ-01 Race
- Ask Your Virginia Legislator to Vote "NO" on Any Budget Containing Higher Taxes
-
ATR Supports H.R. 4781, the
"Keeping American Businesses
Competitive Act of 2010" - Stimulus Dollars Are Taking You for A Ride - On Greyhound Buses (CFA Site »)
- Ronald Reagan Legacy Project Urges Naming of California High School After Reagan
- Democrats Attempt to Subvert Congress in Hopes of Carbon Regulation
- Economic Issues Dominate at the Bloggers Briefing
- Pushback Against EPA’s Attempts to Regulate Carbon Emissions Grows
- Minnesota Gubernatorial Candidate Running on a Platform of Tax Hikes
Thursday, March 11, 2010
- Michigan Jobs Ain't What They Used To Be...Unless You Work For The Government
- ATR and CFA Support Earmark Moratorium
- Voter Fraud in the Name of Tax Hikes
- Ballooning Deficits in Greece Foreshadowing Future for the U.S.? (ASA Site »)
- Green Jobs FAIL
- The Evergreen Tax and Fee Spree
- ATR Staffer Testifies Before U.S. House Energy & Commerce Select Committee
Wednesday, March 10, 2010
- The endemic rot in government run health care
- The Debt Panel's 800-lb. Gorilla: Why Andy Stern Stands Out
- The Left Agree: Obamacare Ushers In Their Radical Ideological Agenda
- We Ought Focus On Cutting Taxes & Spending, Not Deficits
- The Debt Panel's 800-lb. Gorilla (AWF Site »)
-
Does the Obamacare Investment Surtax
Apply to Capital Gains? - ATR Urges Opposition to Sen. Isakson Pension Bailout
- Taxpayers to Legislators: Clean Virginia Budget of Taxes
- ATR Supports the Georgia JOBS Act
Tuesday, March 9, 2010
- ATR Urges Utah Governor Herbert to Veto Tax Increase
- More on the VAT
- Public Sector Jobs
- How 550,000 jobs were destroyed by the minimum wage hike
- How Obamacare Will Hurt Poor Women & Children Most
- Federal Workers Make $11,000 More Than Private Sector Workers, and There’s More of Them (AWF Site »)
Monday, March 8, 2010
- Legislation Introduced to Put Ronald Reagan on the $50 Bill
- Pledge Signer Wins Illinois Republican Gubernatorial Primary
- "Net Neutrality" To Kill Jobs
- NY Supreme Court Votes to Evict Residents and Close Businesses (PRA Site »)
- California US Senate Candidates Square Off in First Debate
Friday, March 5, 2010
- ATR and CFA Support the Spending Limit Amendment
- Utah Representative Breaks Tax Pledge
- AWF Will Rate Vote on House Jobs Bill (AWF Site »)
- Energy Tax Hike Series: Use it or Lose it Tax
Thursday, March 4, 2010
- The reliability of spending "estimates"
- Utah State Senator Tries to Sweeten Tax Hike with Pork
- Obama Administration Makes Attempt to Seize Millions of Acres Across America (PRA Site »)
- More "Stimulus" Boondoggles - Social Engineering and Lobbying for Higher Taxes
- Energy Tax Hike Series: Raises Taxes on Tertiary Injectants
Wednesday, March 3, 2010
- Is This Reality or a Science Fiction Dystopia?
- Andy Stern Update: US Attorney Reviewing Case & Obama Appoints Stern to Debt Panel
- Texans: Do You Know Which Candidates Have Signed the Taxpayer Protection Pledge?
- AWF Asks White House to Take Position on Andy Stern Investigation After Appointment to Debt Panel (AWF Site »)
- AWF Continues Andy Stern Investigation (AWF Site »)
Tuesday, March 2, 2010
- Energy Tax Hike Series: Superfund Tax Reinstated
Monday, March 1, 2010
High Taxes Lead to Decreased Revenue in Chicago
From Pat Pelletier on Tuesday, November 17, 2009 11:56 AM
When you tax a product, people buy less of it or will buy it somewhere else. When people buy less of a product or buy it somewhere else, there is less tax revenue. Therefore, continuously raising taxes on a product is not a logical or effective way of generating revenue. It is so simple that it almost isn’t even worth saying. So why do politicians expect anything else to happen when they raise taxes?
Excise taxes are spun as a convenient way to generate revenue, and are created for states to fund their overspending problems. Alcohol and tobacco are two of the most popular targets for these tax hikes. We have covered this before, and Chicago is the latest to experience the same misguided policy.
It is so bad in the city, that taxes contribute $4.67 per pack to the cost. That is more in taxes alone than most places charge for the total price of a pack. Of the tax, $1.01 goes to the federal government, 98 cents go to the state, $2.00 goes to Cook County, and the city takes 68 cents. The most recent tax hikes happened this spring. Four levels of government plan on making money from cigarette sales.
With such localized taxes, buyers have done what you would expect: they changed where they buy cigarettes. Understandably few are willing to pay around ten dollars for a pack in downtown Chicago. Buyers will leave the city, and since for some it’s not much farther they just go to the next county over. Buyers can then avoid $2.68 of county and city taxes. Many buyers even go farther, with one report showing 3 out of 4 packs smoked in the city come from out of state. This has lead to a 68 percent drop in revenue.
Raising taxes to such a high level helps no one. It disproportionally targets smokers. It hurts small businesses, such as locally owned gas stations and convenience stores, which depend on tobacco sales for a large part of their revenue. Finally, and this is the part that so many policy makers fail to grasp, it hurts the state and its budget. Depending on revenue from raising excise taxes just leaves local governments in a deeper fiscal hole than before.
Permalink | Email | Print | Tags: TAXES, TOBACCO, TOLDYOUSO, Illinois
Related Articles
ATRF Analysis: The Importance of International Tax Competition - Monday, March 15, 2010 11:24 AM
How Tax Preparation "Simplification" Will Lead to Tax Hikes - Monday, March 15, 2010 11:04 AM
China Buys Our Debt, We Give Them Renewable Energy Stimulus Jobs...Seems About Right - Friday, March 12, 2010 4:24 PM
Urge Gov. McDonnell to Privatize Tax Preparation and Filing - Friday, March 12, 2010 4:20 PM
ATR Urges Governor McDonnell to Sign Bill to Abolish State Run Tax Filing - Friday, March 12, 2010 4:00 PM
Add a Comment