Grand Rapids Cigar Society

You know, the American people once went to war with the most powerful empire on the planet over idiocies just like this one:

If approved by the Legislature, state taxes on non-cigarette tobacco items would jump from 32% of wholesale price to 64% next year. Combined with the new federal tax, the average price of a one-pound bag of popular Gambler tobacco would skyrocket from $19 to $70 in Michigan.

I am beginning to wonder if we are not going to have to do it again.

The Granholm administration is attempting to double down on the SCHIP tax atrocity that was passed without a backward glance earlier this year. We are approaching the point where 75% or more of the price to the consumer for tobacco products is going to be taxes collected by the government – not profit collected by the manufacturer. Much like gasoline, by far the largest profiteer in the tobacco industry is going to be the government, not the private business.

Economics 101 is if you want to reduce or stop an activity, get the government to tax it. If the taxes are high enough, the people will stop participating – because they will not be able or willing to afford it anymore.

The bad part about this is that the government is using this money that they think they are going to be getting to balance the budget and/or make welfare handouts. When the money from the tobacco taxes dries up, the Government is going to do two things: Claim victory in the war on tobacco, and then complain about how they don’t have anymore money and need to find something else to tax into oblivion. My guess would be fat – as that appears to be the next big health bugaboo.

What they never seem to want to accept is that if they were to lower the taxes on these products, they would have more money and the people that use these products would have more money, which in turn would mean more spending, more commerce, and more taxes to the government as a result of that increased commerce.

CRA – Cigar Rights of America

This entry was posted on Thursday, March 19th, 2009 at 2:01 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.