Cigarette Tax Hike of 75 Percent Will Create Great Lake of Smuggled Smokes – Mackinac Center:
- Raising the state’s tobacco tax will send smokers to out-of-state sources for cigarettes
"The opening weeks of a legislative session — and with a new governor at the helm — often produce a hailstorm of new policy proposals. One of those — House Bill No. 4188 — would
raise cigarette taxes by $1.50 per pack and impose the tobacco tax on e-cigarettes.
...Most of the new money generated from the tax on traditional cigarettes — 90 percent (
to $3.50)— would flow to the
state’s General Fund, rather than health initiatives.
...Most people keep smoking after a tax increase; they just acquire their smokes elsewhere.
Michigan makes it illegal to bring a single untaxed cigarette into the Great Lake State, but we expect substantial increases in such activity.
A 2005 paper in the Journal of Health Economics by economist Mark Stehr, titled “Cigarette Tax Avoidance and Evasion,” concludes that up to
85 percent of the after-tax change in consumption is a function of tax evasion and avoidance.
...Remarkably, smuggling isn’t the only major consequence of these higher taxes.
In Michigan we have seen violence against police, people and property,
all tied to the illicit trade in smokes..."
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