Wednesday, September 26, 2012

Rahm considering cigarette tax hike--but smoking tax revenues usually fall short

Even though Illinois has already raised its cigarette tax, Chicago Mayor is considering an increase in the city smoking tax.

Already, Chicagoans pay the nation's second highest taxes on cigarettes.

With the hope that Rahm is reading this post, I have to once again repeat what happens when smoking taxes go up. Revenues almost never match forecasts because some smokers quit (a good thing) because cigarettes cost too much, while others will purchase cigarettes on the black market or on the internet, or they'll travel to cheaper jurisdictions such as Indiana to buy tobacco goods.

Illinois politicians are nationally renowned for spending first and collecting revenues later. And when those revenues fall short, other taxes end up going up.

And that matters to non-smokers such as myself.

Related post:

Hoarding society: Illinoisans buying up cigarettes ahead of tax hike

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2 comments:

Faye said...

In other words, government should first check its spending before it avenges on some of the society's faves. Anyhow, you can always switch to e-cigarettes and smoke at home. After all, it won't pose any possible threats on fire since it only emits vapor and no electrically lighted butt.

Unknown said...

So, if people use e-cigarettes and they smoke it in public, would they be charged with tax, then? What is the PRIMARY reason for hiking the tax? Is it to increase revenue or encourage people to stop smoking? Which is which?