Way back in 2011 we took at look at a proposal by Cook County and the greater Chicago area to try to boost revenue through the tried and not very true practice of sin taxes. The government there was going to stock up their coffers by jacking up the taxes on cigarettes. This was on top of a decision by the Governor of Illinois to raise taxes one dollar per pack for the entire state. At the time I noted the warnings coming from industry analysts who said that such a move would likely not produce much in the way or revenue or significantly reduce smoking. People would simply take their business where it was cheaper, including patronizing tobacco smugglers who would see a spike in the black market. By the summer of this year I was feeling like I should buy some lottery tickets, since my predictions looked pretty good.
Cigarette smuggling on the rise as taxes skyrocket
John Chambers, head investigator for the Illinois Department of Revenue, says cigarette smuggling now rivals illegal drug smuggling, and street gangs are getting involved.
“Keep in mind this is very similar to drug activity, smuggling drugs, and there could be concealed compartments, false floors in the bed of a truck, much like drugs, all packed with cigarettes,” Chambers said.
With Chicago, Cook County, and Illinois taxes all included, smokers now pay $4.66 a pack in taxes in Chicago. That’s the second-highest cigarette tax in the nation, trailing only New York City at $5.85. People looking to make quick cash don’t need to travel far to buy cheap cigarettes. Indiana’s tax is just $0.995 a pack, and Missouri’s tax is the lowest in the country at just $0.17. Chambers says cigarette smuggling is now as lucrative as drug smuggling, with much lower penalties.
At least Chicago has taken note of the problem. And having seen the results of this poorly planned and even more disastrously executed scheme, they are clearly ready to put a solution in place. Since the old plan didn’t work, clearly we should… raise the tobacco tax rate even higher. (Emphasis mine)
Cook County Board President Toni Preckwinkle’s proposed $1-a-pack cigarette tax increase won first-round approval by the county board’s Finance Committee — a committee that all 17 commissioners sit on, leaving little doubt it will be approved as part of the larger 2013 budget package.
The hike, scheduled to kick in March 1, will push the combined tax on a pack of cigarettes to $6.67 in Chicago — the second-highest in the nation behind New York City at $6.86.
While some are concerned that smokers will go over the border for cheaper smokes, Preckwinkle isn’t concerned.
And why should she be concerned? I mean, it’s not like it’s already happening on a daily basis, sapping their law enforcement resources and turning citizens against each other, driving traffic down at local small businesses and boosting the payroll of known criminal gangs, is it? Oh, wait… it is.
Either way, it’s too late now. The tax hike was already approved. But hey… it’s just got to work this time, right?