Proposal for new Illinois cigarette tax still on the table

Jury selection began yesterday for the corruption trial of disgraced former Governor Rod Blagojevich. He's not, however, on trial for being a lousy governor. If such a thing was possible, one of the charges against Blago would be using gimmicks to "balance" the state budget. His former running mate, Pat Quinn, succeeded the hair-brained one in Springfield, and he's utilizing the same shell game techniques.

One kernel of craziness is adding a dollar-a-pack to the cigarette tax. Like Cal Skinner, I don't smoke. But he's against the new tax. In his blog, the onetime Libertarian candidate for governor points to a statement made by his former running mate, Jim Tobin:

High taxes on items such as cigarettes encourage people to shop across state lines where taxes are lower. The passage of Senate Bill 44 would place Illinois at a competitive disadvantage to the surrounding states of Missouri ($0.17/pack), Kentucky ($0.60), Indiana ($0.995), and Iowa ($1.36).

In Chicago, where the 10.25% sales tax rate also applies to cigarettes, one pack will sell for almost $10.00 under this proposed legislation. That kind of tax gouging not only drives economic activity out of Illinois, it invites more illegal black-market activity in—and everyone pays for the increased criminal activity this will bring to the state.

But it is already happening, as I wrote last month, one study shows that 75 percent of Chicagoans bypass its onerous tax by purchasing cigarettes elsewhere. Not only will a $1 increase in that tax push that number higher, it will make smuggling a statewide phenomenon. And in a year or two, the state will be looking for more revenue to address the "surprising" shortfall in funds.

A new tax won't work.

Technorati tags: Politics Indiana Northwest Indiana smoking taxes business economy news government Patrick Quinn Blagojevich pat quinn cigarettes