Friday, October 09, 2009

Today's Stat II

< $25,000,000

2006 Chicago city revenue from cigarette taxes,
2008 Chicago city revenue from cigarette taxes,
2009 Chicago city revenue from cigarette taxes

And they are surprised!?!

"In most places, tax increases lead to increased revenues," said David Merriman, a University of Illinois at Chicago economist who has studied cigarette-tax avoidance worldwide for 15 years. "Chicago would be the only place I know of where it's gone the other way."

Did these guys ever play Sim City? When you raise taxes too much people avoid them. They go some place else or they stop using the item being taxed. It's really Econ 101.

I predicted this back when the smoking ban and the big cigarette tax hike hit at more or less the same time. And I disagree with the sentiment that this is the first time it has ever happened. I remember a news magazine show from many years ago - I was probably still in college - about the California cigarette tax hike. The revenue was directed at anti-smoking campaigns and as the rate of smoking fell the revenue fell so low that it stopped covering the cost of the anti-smoking campaigns.

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Blogger Miss Healthypants said...

Well, I hope it means that fewer people here are smoking now. That stuff's sooo bad for you.

7:39 PM  

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