The Mackinac Center for Public Policy in Michigan, a think tank similar to the John Locke Foundation, released its latest estimates for cigarette smuggling rates in 47 of the 48 contiguous states.
While North Carolina is not included in the report, this is still an interesting think to discuss and think about from a policy standpoint. While cigarette taxes have been proven to increase smuggling, what other government taxes create or increase illegal activity? Definitely something to think about before enacting a new tax.
The following information came from their press release about the report:
“People don’t realize the degree to which government induces illegal and dangerous activity with bad policy,” said Michael LaFaive, director of the Mackinac Center’s Morey Fiscal Policy Initiative. “In this case, individuals cross borders for personal smokes and an organized, criminal class brings in contraband cigarettes by the van full.”
This is the fifth set of smuggling rate estimates published by Mackinac Center analysts. The first two studies were published in 2008 and 2010, and contained detailed histories of smuggling in Michigan and other states. The numbers were updated in 2013 and 2014.
The top smuggling rates in the nation — according to the Mackinac Center’s new study — include New York (58.0 percent); Arizona (49.3 percent); Washington (46.4 percent); New Mexico (46.1 percent); and Rhode Island (32.0 percent).
The largest increase in smuggling occurred in Illinois, which moved up 16 spots to 14th overall.
“We attribute this sizeable increase to recent hikes in cigarette excise taxes at the state, county and city levels,” said Todd Nesbit, a senior lecturer in economics at Ohio State University, co-author of the study and an adjunct scholar with the Center, said.
