Mayor Rahm Emanuel favors adding 75 per pack to Chicago’s cigarette taxes. On top of the federal, state, and county fees, this new tax, if enacted, will force Chicagoans to pay $7.42 in taxes–the highest in the nation.
As I am the Marathon Pundit, the only smoke you’ll see me exhale is the kind that came out of my lungs during today’s chilly morning run.
But increasing tobacco taxes effects everyone. Because when smoking taxes go up, a number of things happen. Some quit, which is a good thing, others smoke less, while others seek out their smokes in cheaper jurisdictions, such as Indiana. The southeast side of Chicago borders the Hoosier State.
Even worse, some retailers sell cigarettes without the local tax stamps–not only depriving jurisdictions of revenue, but making it more difficult for honest merchants to compete. For convenience store owners, tobacco sales account for 40 percent of their sales.
Chuck Goudie of ABC 7 Chicago remarked earlier this month about Cook County–where Chicago is and where I live–that black market cigarette profits “are as high as dealing drugs– all at taxpayers’ expense.”
At taxpayers’ expense? Yep. And because smoking tax revenues almost never match bureaucrats’ collection forecasts, eventually funds need to come from elsewhere. So other taxes eventually are hiked. As James Thurber titled one of his stores, “You could look it up.”
The Heartland Foundation quipped that Rahm’s proposed move is “a tax hike Al Capone could have loved.”
Scarface Al, arguably the most famous Chicagoan of the last century, knew a lot about smuggling and illegal markets.