Saturday, July 09, 2011

Cigarette Taxes: Fail? Not Necessarily

Interesting numbers here.

Additional revenue from Gov. Pawlenty’s 2005 tax increase was estimated to generate $174 million per year, but Minnesota's cigarette tax revenue has only increased by an average of $4 million per year—a paltry 2.72 percent of the estimate. And Minnesota isn’t alone: A 2008 Maryland cigarette tax increase only yielded 50 percent of projected additional revenue while cigarette tax revenue in Illinois has decreased by $69 million since 2007. Overall, only 30 percent of cigarette tax increases between 2003 and 2007 have met revenue projections—not a record on which to stake a state’s future.

The track record is pretty clear; cig-taxes are a failure.

So why do States keep trying, given the clear evidence?

Because, of course, State leggies will raise OTHER taxes when revenues are inadequate for the "needs."

That's no longer the case in Wisconsin; some "needs" are.........ahhhh........not really "needs."

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