The Wages of Sin Taxes
Cook County, Illinois has just notched another significant milestone. Not only is it one of the most corrupt counties in America, it now boasts the highest cigarette taxes in the country -- a higher local tax than New York city, although the Big Apple still holds the title of highest cigarette tax thanks to a larger state tax. An additional dollar a pack tax went into effect March 1st, bringing the county tax bill for smokers to $6.67. A pack of cigarettes in the city of Chicago now costs $11 in some places.
Beating New York city in anything is always seen as a triumph for residents of the county, which includes (and is dominated by) the city of Chicago. As always, the punishing tax on cigarettes is not about revenue, it's for the kids.
"There are a significant number of young people who will not start smoking as a result of the increase in the cigarette tax - that's the first, and in my view, primary reason. So they'll avoid a lifetime of addiction," Toni Preckwinkle, Cook Co. Board President said.
Many Chicagoans are already crossing the border and buying their cigarettes in Indiana instead.
I have said it before and will say it again; if the authorities who take such satisfaction in reaming smokers were really concerned about the kids, they would ban the manufacture, distribution, and sale of cigarettes. The prohibition argument is nonsense. They have jacked up the price so high now, there are already wars over illegal cigarettes and massive avoidance of taxes:
John Chambers, head investigator for the Illinois Department of Revenue, says cigarette smuggling now rivals illegal drug smuggling, and street gangs are getting involved.
"Keep in mind this is very similar to drug activity, smuggling drugs, and there could be concealed compartments, false floors in the bed of a truck, much like drugs, all packed with cigarettes," Chambers said.
In a recent study, University of Illinois at Chicago professor David Merriman found 75 percent of cigarettes in Chicago didn't have the proper tax stamps. He says the most recent increase will likely have a big impact along state lines.
"For the ordinary everyday smoker, many of them have already found ways to avoid the tax. I think it's going to be a much bigger issue in areas where the state border makes it a big difference," Merriman said.
A clerk at a tobacco shop in Hammond, Ind., less than a mile from the state line, says business has doubled since the latest increase began at the end of June.
The problem with getting increased revenue from cigarette taxes is that they never, ever receive as much in taxes as they project.
Recent cigarette tax increases have had only a short-term benefit to the government bottom line. Some people quit, while others buy cigarettes online or outside the county or state.
When the county last raised the cigarette tax — by $1 per pack in 2006 — collections initially shot up by $46.5 million, hitting $203.7 million, county records show. But by 2009, the county collected $20.4 million less than it had in 2005.
Mayor Richard M. Daley bumped up the city of Chicago's share of the cigarette tax by 32 cents in 2005 and another 20 cents in 2006, to 68 cents per pack. He saw collections rise from $15.6 million in 2004 to $32.9 million in 2006, according to a city report. But city cigarette tax revenue fell to $28.4 million in 2007, and continued dropping to $18.7 million by 2011, records show.
At the state level, Quinn pushed through a $1-a-pack hike in June.
Before that, state lawmakers and Gov. George Ryan agreed on a 40-cent increase in 2002. Cigarette tax proceeds went up by more than $178 million in 2003, to $643.1 million, and rose to $729.2 million in 2004. The revenue then fell steadily to $549 million by 2010 before edging back up to $580 million last year, according to state records.
Many of you reading this no doubt are cheering the authorities on. If it makes you feel better, that's fine. But don't delude yourselves into thinking government is going to stop at simply gouging taxpayers who smoke. The drive to control what you ingest, what you eat, what you drink, will use the tax system to whip you into shape. Snacks are the next target of the busybodies. Red meat is in the crosshairs as well. Restaurant meals will become more and more expensive, eventually being a luxury that all but the richest among us will be able to afford.
They won't stop at cigarettes because this is not about your health, it's about them gaining the power to control you. You are too stupid to know what's best for you, so someone has to save you from your own human frailty.
It's not going to happen tomorrow, or even five years from now. But eventually, the nannies will get around to taxing something you like to eat or drink out of sigh.t
And you might wonder why no one is lifting a finger to stop them.