Cook County smoking tax hike will lead to smuggling, revenue shortfalls

No Cook County Cigarette Taxes Here!

Illinois politicians love raising taxes. This summer Gov. Pat Quinn signed into law a one dollar increase in the state cigarette tax rate.

Adding all of the local taxes together--Chicago and Cook County, and Illinois Chicagoan pay the second most in taxes--$4.66 a pack. Only New York City residents pay more. Now Cook County Board President Toni Preckwinkle wants to add another dollar to that rate.

Not only are cigarette taxes are regressive,  because some people quit--a good thing--predicted revenues from new cigarette taxes fall short. These taxes also fail to reach projections because smuggling of cigarettes increases. Indiana's local tax burden on smokes is one dollar.

And some smokers driving on the Cook County line will see a sign such as this one that I photographed in DuPage County: "No Cook County Cigarette Taxes Here!" They'll pull over and buy. Expect many more signs--bigger ones, too--if Preckwinkle's tax increase is enacted.

And as I've argued before, when the collections from the smoking taxes fall short--the politicians will look at raising other taxes.

Technorati tags: politics Democrats Illinois Politics Cook County chicago chicago politics cigarettes Indiana smoking taxes business economy

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