Saturday, August 16, 2008

Sin Tax

This Wall Street Journal Op-ed tells of the trouble the State of Maryland is having balancing the budget on the backs of smokers.

In 2007, Maryland's legislature raised the cigarette tax to $2 per pack. Now that cigarette sales have plummeted by 25% the state is in fiscal crisis again. Many people would conclude this is a good sign and that behavior modification is the ultimate purpose of 'sin taxes'. The problem is that instead of 25% fewer cigarettes being consummed, most likely these cigarettes are being brought across neighboring state lines where the price can save as much as $15 per carton.

The Maryland lawmakers have now made it a crime to bring more than two cartons of cigarettes into the state that weren't purchased in Maryland. This blatantly says that Maryland isn't so much concerned for the health and well-being of its citizens as it is in making money on people's destructive habits.

Maryland isn't the only jurisdiction to encounter this problem, but it illustrates the problem with these taxes. Are state and local governments trying to keep Americans from sinning or just trying to become a financial partner in such behavior?

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