Thursday, November 18, 2010

Hey Quinn: Taxing cigarettes and soda not a revenue enhancer

In January Illinois Governor Pat Quinn for the third straight year will try to raise the state income tax.

He might succeed. But why stop there? He might try to increase the state cigarette taxes. As I've written before, such efforts fail to match revenue estimated--some people quit, some drive across state lines for cheaper smokes. Hello Indiana!

New York has the nation's highest cigarette taxes--and sales of cigarettes have plummeted there since the taxes went up. James Calvin, of the New York Association of Convenience Stores, tells the New York Post, "Every tax increase drives more smokers to that dark, shadowy, unregulated, unlicensed, untaxed side of the street. The whole policy is self-defeating."

If Quinn and the Democrats are looking to tax soda, or as it is known by Chicagoans, pop, that just might end up flat as well. The federal government is considering a tax on those beverages.

A tax on top of a tax? If it's a bad idea, look for Illinois politicians to pursue it.

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