Sin All You Want, We’ll Tax More
Jun 18th, 2009 by thatsElbert
A FreedomWorks press release brings this back to mind:
Delaware is the latest state to jump on the tax hike bandwagon with a plan to raise taxes on cigarettes and alcohol to bridge a looming budget gap. These so-called “sin taxes” seem to be the first place politicians go for some quick cash anytime they can’t pay the bills.
A recent proposal would raise alcohol taxes by two cents per 12-ounce can of beer, three cents per 5-ounce serving of wine, and 15 cents per bottle of liquor. The state cigarette tax would see a $.45/pack hike.
A better idea would be to take advantage of the free market and lower the tax on these items below the levels of our neighboring states. It would drop the prices at the stores and bring residents from neighboring states into Delaware to buy these products. There’s a good chance those customers may be buying other goods while they are here. It could build business in the state. It’s certainly worth a try.
FreedomWorks points out that raising sin taxes in New Jersey was a bomb:
Delaware doesn’t need to go down the path of higher taxes that nickel-and-dime citizens. State legislators need only look up I-95 to New Jersey to see the effect cigarette tax hikes have on the budget. A Heartland Institute study shows that for two years running, the tax hikes have led to reduced revenues, not the millions the state was banking on.
New Jersey was left with a still gaping budget hole and businesses were hurt as smokers turned to the Internet, Indian Reservations, and the black market for lower priced cigarettes. This is a common scenario when legislators go after a minority of citizens for the funding woes of a state.
It would be worth a try. After all, we’re taking a gamble on sports betting, why not try lowering sin taxes? Although we are in an environment where a legislator can make a statement like this without any problem:
[Rep. Pete] Schwartzkopf: “I’m not under any illusion that anyone in this room is in favor of raising taxes, but we were elected to do it.” (link)
Would those that elected Rep. Schwartzkopf to raise your taxes please stand up.
(crossposted on That’s Elbert With An E)
We need higher taxes to pay the bloated salaries of Democrat hacks on the state payroll.
Grow government and pay.
Higher Alcohol taxes would be a proper response in my estimation. We are not up the Laffer Curve.
Cigarettes were just subject to a tax increase. I agree with you that anymore will just lose money. We will make more by just holding the line or maybe as you suggest cutting them.
We should tax fast-food, candy, chips and dips, ice cream, butter, soda and so on. The AMA website claims that obesity is the number one killer in America….more than all forms of cancer and accidents combined. The added cost to healthcare due to smoking is infinitesimal as compared to the burden of the overweight.
Candy, chips and so on should have warning labels like cigarettes.
Lowering both Alcohol and cigarette taxes will result in a steady stream of folks from New Jersey, Pa, and Maryland wanting to buy what is over taxed in their home states. In the end Delaware will collect more than if they raise taxes and run these shoppers off. This does not reflect the truckers going to New York and parts North who will buy in bulk for their trips to the taxachusetts areas of the Northeast.
Walk thru the parking lots of the Tri-State, Chirsitana, and Dover Malls and count the number of out of state shoppers wanting to avoid the instate sales taxes. More Sin taxes will generate smaller and smaller revenue. Whereas a Cigarette/alcohol tax haven will draw many from out of state to our borders. This increases sales volume and employs more people all of whom pay Delaware State Income taxes.
The Democrat response is to imitate PA., NJ, and MD. I say go the other way.
More Sin taxes will generate smaller and smaller revenue.
That is the kind of problem I would like to have.
Whereas a Cigarette/alcohol tax haven will draw many from out of state to our borders.
I can hardly wait.