Saturday, November 23, 2013

Sin-tax hike could boost black markets

By: Steven Greenhut 11/21/2013

Anti-smoking activists have submitted to the attorney general a proposed ballot measure to boost taxes on a pack of cigarettes by $2, and use the revenues to fund research into the treatment of tobacco-related diseases. It’s the latest effort to crush smoking by significantly hiking the costs of tobacco.
“Increasing the cost of cigarettes has been shown to be the most direct and effective way to reduce smoking,” according to the proposed initiative’s findings. This proposal will “help advance medical research and prevent more kids from taking up a costly and dangerous habit,” said Marsha Ramos, chairwoman of the American Lung Association in California, in a statement.
But many economists note that, at some point, tax hikes offer diminishing benefits, thus reminding me of an entertaining old thought experiment about the effects of taxation on people’s buying habits……To Read More…..

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