Posted by kallahar on Aug.06.02 at 08:17 am PDT.
kallahar writes Increasing tobacco taxes by $3 would make the black market for cigarettes even more profitable than it is now and would lead to another situation like the current War on Drugs. Adding $30 to the price of a carton of cigarettes make a drive to Kingman, Arizona, Las Veags, Nevada, or Tijuana, Mexico, worthwhile.
If someone -- like me -- bought ten extra cartons of cigarettes, a profit of $200 could be made selling them in the black market for $10 less than retail outlets. The cigarette money would be tax-free since the money comes from an unreported black market. I would reap enormous profits, the government would lose tax money, and the smoker would get cheaper cigarettes. With the amount of money that could be made, the virtually-zero chance of getting caught, and the negligible penalties for untaxed cigarettes, there's not much to stop me from becoming a smuggler.
I am a law-abiding citizen for the most part. When the risk got too high, I would get out of the business -- I have too much to loose. But as soon as I get out of the business, someone else will step in to replace me -- most likely someone that is not as law-abiding as I am, i.e., someone to whom the risk is still worthwhile. It shouldn't take too long before the really bad guys are the only ones left selling cigarettes.
The government didn't learn anything from the failed War on Alcohol
(Prohibition) or the failing War on Drugs, so why should the War on Tobacco be any different?