High Taxes = Low Revenue

Friday 19 August 2011 - Filed under Uncategorized

Fucking diminishing returns, how do they work? Via HnR:

Much to the irritation of tax-happy bureaucrats, smokers in the U.S. are turning to hand-rolling and cigarillos to avoid paying for new taxes on pre-packaged cigarettes. According to the Lexington Herald-Leader, the DOJ “estimates states have lost $5 billion a year because people are using alternatives that have no state retail cigarette tax.”

Kentucky doubled its cigarette tax in 2009, leading to a 6 percent decline in cigarette tax revenue in 2010, and a 17.7 percent decline in cigarette tax revenue for the 2011 fiscal year, which ended in June. Based on the $262 million Kentucky collected from smokers last year, that’s an impressive $44 million revenue shortfall.

They come up with a scheme to raise revenue by doubling the tax on it (under the guise of health reasons), then complain that there are just too many people who have found a way around their scheme. And progressives swear that higher taxes = higher revenue. I mean, seriously, who knew?

2011-08-19  »  madlibertarianguy