-By Warner Todd Huston
Rumors are once again rumbling in the cash-starved, big spenders in California’s legislature to raise tobacco taxes. But does this work? History says that not only does the tax hike rarely bring in more money to the state the hike also causes more crime as criminals move in with black market good s at cheaper prices.
Once again the denizens of Sacramento are looking to a huge hike in taxes. Earlier this year Senator Kevin de Leon floated a scheme to raise taxes by two dollars a pack for cigarettes.
Democrats claim that this will bring in millions of dollars in new taxes a year but other states have tried this and found that instead of bringing in what legislators thought would come in all they got was more black market crimes and cigarette smuggling.
In 2012, for instance, the State of New York raised cigarette taxes yet still had a $130 million shortfall. The new taxes did not bring in what Empire State legislators projected.
But this is the least of the problems that large hikes in tobacco taxes bring to a state. The biggest problem is that it also brings a hike in crime.
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High Cigarette Taxes Bring Little Revenue and New Crime”