Wednesday, July 12, 2017


Cigarette Sales Dive After Tax Hike, But Why?

by Bob Walsh

Yes, this was the headline of an item in the Sacramento BEE a couple of days back. The state increased the sales tax on a pack of coffin nails by an additional $2 per pack. Tax revenue from tobacco sales dropped 64%. The stupid bastards that run our state are too dumb to figure out the difference between static and dynamic modeling.

If you increase the tax by 1% you will probably get only a modest decrease in the taxed activity. If you increase the tax by 100%, especially if it is already considerable, you will almost certainly get a HUGE drop off of the taxed activity. Maybe people are buying their cancer sticks at Native American reservations. Maybe they are buying bootleg out-of-state cigarettes. Maybe they are getting really down and dirty and rolling their own.

The mere fact that our government is stupid enough to ask a question like this should convince the taxpayers that our political ruling class is made up mostly of morons. It won't, but it should.

1 comment:

Anonymous said...

Less than 20% of the U S smokes. That doesn't include weed.