New cigarette tax driving more smokers to black market
Tax hikes are never popular. However, Washington state is relying on a boost in the cigarette tax to help it out of its budget crisis.
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#1 Oct 21, 2010
This is a small part of the story.
For addicted smokers, the price of cigarettes is elastic, and most will pay an additional tax to satisfy their addiction. Higher prices will undoubtedly drive some to the black market, but the story relies on anecdotal evidence and cites no data indicating an actual trend. Put it another way: Does a story about abusive parents mean that all parents are abusive?
Increased cigarette prices serve as a deterrent to young would-be smokers. Thus, tobacco taxes -- even if they were never spent -- are an important public health measure. In the long term, they help lower the tax burden by reducing the number of smokers. Moreover, they reduce the burden on our health care system, in which it remains ever true that an ounce of prevention is worth a pound of cure.
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