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Issue Analysis

    State Cigarette Tax Hikes Totally Earning Cash; For Other States.

    Years ago, Illinois decided that smoking was bad for its citizens and put a cigarette tax into place thinking they'd do two things: one, break the people who live there of a nasty filthy habit that was shortening their lives and keeping the Democratic politicians who cared about their fragile health up at night, and two, raise a little cash for a state that is so far in debt California won't be seen in public with it anymore. 

    As a result of their kind concern for the lung health of Illinois residents, the legislature suceeded in doing one thing: improving the economies of Wisconsin and Indiana, as Illinois citizens escaped across the borders in droves to pick up bratwurst, lottery tickets, cheese and, most importantly, cheap cigarettes.

    And now Washington state is trying their hand at controlling their citizens' ability to exercise their right to inhale the crisp mountain air through a nicotene-laced paper tube, and also at stimulating Oregon's convenience stores

    High cigarette taxes, intended to discourage the unhealthy habit and raise state revenue, have created a black market for cigarette sales across the country  — from people sneaking cartons from states with lower taxes to a crime-plagued industry fueled by an influx of international cigarettes costing as little as 20 cents per pack.

    In Washington, 35 percent of the cigarettes in the state are contraband, meaning they either came from cheaper tax states such as Oregon or Idaho or from the international market, according to data from the Washington state Department of Revenue.Washington’s state tax on cigarettes is $3.02, Oregon’s is $1.18 and Idaho is 57 cents, according to data on tax rates from the Campaign for Tobacco Free Kids.

    “It doesn’t take a rocket scientist to figure out that people in Washington are buying their cigarettes in Oregon,” Washington state Department of Revenue spokesman Mike Gowrylow said. “There’s a big incentive for people to make a run for the border and stock up on cigarettes.”

    Things got so dire in Washington that one cigarette "entrepreneur" even hired a hitman to settle a dispute over smuggled smokes, and the Pacific Northwest has suddenly become a booming market for Asian-made tobacco products that can be easily shipped aboard vessels headed into port cities like Seattle.

    Oregon is now also considering a state tax, the thought being that this sudden boom in cigarette sales could line their pockets as well. Of course, Oregon is conveniently ignoring that the cigarette sales boom is actually the result of more expensive cigarettes to the north, and that Idaho to the East would just as quickly turn into a destination vacation for Oregon's smokers as Oregon did for Washington's.

    As the Mackinac Center notes, smuggling and black market cigarette sales accompany tax hikes almost immediately, and despite any immediate peak in calls to state-run "quit lines," there are really no long term effects of a tax or ban on people's cigarette use - in fact, taxes and bans don't slow smoking at all. They just happen to make smokers more creative about getting a better deal on their products of choice. Oregon hipsters, then, wouldn't be dissuaded from using their hand-rolled craft cigarettes and their Native Spirits. They'd just find trunks to buy them out of instead of bodegas. 

    Of course, like Illinois', most state government rarely learn, and so will continue to raise taxes on cigarettes thinking they're doing their citizens a favor. Which government always thinks. Because it's government. So how could it possibly be wrong?