General discussion

When taxing makes little or no sense

The federal cigarette tax jumped from 39 cents to $1.01 per pack on April 1, 2009, to finance expanded health care for children.

I don't smoke so these things don't directly affect my wallet but government needs to make up it's mind as to whether or not certain "sin" taxes are to raise revenue or to control usage. My guess is that, too often, taxes of this kind are levied to ensure continued use of the products and maximize revenue. If the government wanted people to quit smoking, they could raise the tax to $10,000 a pack and the great majority of those who smoke would have to quit or find cheap tobacco under the table. I'd suspect a tax of this amount would result in almost no government revenue but wouldn't that be the idea if government really wanted to discourage smoking? I think they'd rather have the money. Happy
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Comments
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Can you match these prices?
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Cigs here in SW VA per carton

are averaging $45...that's about $4.50 per pack (I remember buying cigs when they were 35 CENTS a pack). A carton a week average is about $180 per month. I now buy my 'fixings' and roll my own for about $20-30 a month. Quite a few people I know have turned to rolling their own. I actually find that I smoke less by doing it this way.

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Smoking less is probably good for you

but I know better than to nag. Both of my parents were very heavy smokers. When we'd travel into the southern states, there were plenty of discount tobacco markets along the highway that must have been specifically placed there to attract the Yankee vacationers. We'd see the tobacco fields in the Carolinas. As I understand it, their "plantations" were always small as tobacco was more labor intensive to grow, harvest and dry. These farmers would not be able to convert to other crop growth that requires far more acreage to be profitable. It may be that government does what it can to not run them out of business and it's my understanding that more and more of their sales are to overseas markets. They may export lung cancer and emphysema but keep the money here in the US. Wink

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Raise it too high and you create a black market

It must be tricky to figure out how high you can raise a "sin tax" without creating a new avenue for organized criminals to make money.

I've talked with my daughter a lot about smoking. I took an economic approach recently, telling her that if you smoke a pack a day, after a year you've blown enough money to put a down payment on a car.

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And if you'd been a two pack a day smoker

you'd also be able to put a down payment on a tank of gas to go with it. Wink

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LOL, the organized criminals in that situation

is the government itself.

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