Yet such simple common sense continues to elude lawmakers, who seem to think they can just keep raising taxes and tap into an unlimited pool of cash.

 

Statistics released in Kentucky last week once again demonstrate the foolishness of such an approach. Kentucky lawmakers passed a whopping tax hike on alcohol and … tax receipts fell 55%. In fact, in the last year, consumption and wholesales tax revenue dropped by a whopping $1.75 million.

 

Of course, Kentucky legislators should have been aware of this - just look at the effects of revenue raising alcohol taxes in the past: the last time the federal government raised the distilled spirits excise tax, it took 11 years to bring in more revenue. And look at what happened with tobacco tax hikes. New Jersey raised the cigarette tax 17.5 cents in 2007. They collected $52 million less than they had projected and $22 million below what they collected before the tax hike. Maryland raised the cigarette tax $1, in 2007 sales dropped by 25% and there was a 254% increase in cigarettes illegally crossing state lines. When Arkansas passed a 56-cent tax hike on cigarettes in February, revenue projections were lowered by $14 million just one month after passage. 

 

Hiking taxes hurts consumers and kills jobs - and doesn’t even raise revenue. There’s a good reason why friends don’t let friends hike taxes.

hahahahahahaha. Oh now I get it.
>> ConservativeGA Friday, May 22, 2009 11:31 AM Report Comment

Was that graph a collective effort from the Democrat Leadership
>> BenPA Friday, May 22, 2009 11:50 AM Report Comment

Long-term tax revenues can only be expected to decline as tax rates continue to rise. Additionally, productivity should be expected to fall as well. Producers have to pay for a tax hike as well. When they do, the marginal unit of production becomes more costly to produce. Why, in the middle of a recession, does Democratic leadership want to infringe upon our nation's ability to recover by hinder productivity?
>> Jacob Friday, May 22, 2009 1:30 PM Report Comment

If only we started teaching kids economics in kindergarten... Maybe then it would have sunk in by the time they reached the US Senate. Quibble - the graph makes it seem like we are moving away from the revenue-maximizing level of taxation. More likely, we're already to the right on the curve and headed for the floor fast.
>> Horatio Friday, May 22, 2009 2:30 PM Report Comment

As one who smoked for 50+ years...~ 3 packs per day, when the Feds raised the tax April 1 I quit. I refuse to send them any more $ than I absolutely have to. Maybe we'll save enough in tobacco taxes to pay the "carbon tax" that's coming down the pike. Yeah, right.
>> MIKE Sunday, May 24, 2009 6:10 AM Report Comment