Tax Reform ATR believes that all consumed income should be taxed one time, at one low and flat rate. Link
GET INVOLVED
ATR ON TWITTER
FOLLOW US-
#Obamacare's 10% tanning tax hits salon owners and customers, most of which are women: http://t.co/dJuaGAT9LE
May 14, 2013 11:01 AM
taxreformer -
Groups who advocated for the IRS to prepare tax returns sure look foolish these days: http://t.co/oKvpIofu7Y
May 13, 2013 06:30 PM
taxreformer -
"We don't need the federal government mandating additional taxes..." -@MarshaBlackburn on MFA: http://t.co/lAuLJtr5t3 #NoNetTax
May 13, 2013 06:00 PM
taxreformer -
Health insurers and businesses are already feeling the iron-clad grip of regulations in #Obamacare: http://t.co/J6dfnKqFYZ
May 13, 2013 05:30 PM
taxreformer -
Virginia Governor Bob McDonnell Signs Largest Tax Hike in Virginia History into Law http://t.co/Qd6KOFfaPv
May 13, 2013 03:46 PM
taxreformer -
Under #Obamacare, mothers have had a tougher time purchasing non-prescription, over-the-counter medicine: http://t.co/dJuaGAT9LE
May 13, 2013 02:01 PM
taxreformer -
9 out of 20 #Obamacare tax hikes have not even been implemented yet: http://t.co/opFkyf1guJ
May 13, 2013 01:30 PM
taxreformer -
.@GroverNorquist on MFA: "[The Senate] didn't ask all of the questions that needed to be asked": http://t.co/wXfkIR2Ca9 #NoNetTax
May 13, 2013 01:01 PM
taxreformer -
"When architects of #Obamacare are worried about it creating a trainwreck, you know something's gone terribly wrong": http://t.co/J6dfnKqFYZ
May 13, 2013 12:30 PM
taxreformer -
Conservative and Free Market Groups Applaud Move to Delay a Vote on Gina McCarthy: http://t.co/lNQYmJAB12 #EPA
May 13, 2013 12:02 PM
taxreformer
Email
Print
New York, Cigarettes, and the Unintended Consequences
In his State of the State address, New York’s Governor Paterson proposed raising the already high $2.75 per pack excise tax on cigarettes. When the state excise tax is combined with local and federal taxes, a pack of cigarettes can cost almost $10, leaving New York with the most expensive cigarettes in the country.
But aren’t high cigarette taxes great? Don’t they bring in more revenue? The idea that raising already high excise taxes to bring in more revenue is ignores a fundamental principle of economics: raising the price of something will always lower the demand of the good. Arkansas, Maryland, New Jersey, and Chicago have all raised cigarette taxes only to have their tax blow up in their face as revenue fails to meet projections.
Some consumers will go into other states to buy cigarettes, opening a black market in cigarette smuggling that lowers state tobacco revenue as well. Out of all the cigarettes smoked in the state of New York 20.9 percent are smuggled in from other states. Cigarette smugglers, who are more serious than the casual consumer who crosses the border and picks up a pack, can make tens of thousands off of a single vanload of cigarettes. Not only is this a blow to state revenue, but it is a boost to crime as profits finance theft of untaxed cigarettes, thefts of state tax stamps, counterfeiting of name-brand cigarettes, and violence against residents and police officers.
Rather than continue to burden the taxpayer, cigarette consumers, and businesses that sell cigarettes – and rather than aid those who smuggle and are involved in the black market – Governor Paterson and the New York legislature should actually lower the tax. A lower tax will allow New York stores to compete with others in low-tax states and reduce smuggling to still generate some revenue that New York seeks.
