• Publications
    • Essay
    • Case Study
    • Policy Study
    • Report
    • Testimony
    • Other
    • Newsletter
  • Blog
    • Daily Blog
    • Podcasts and Radio
    • Video
    • Infographics
    • Commentary / Op-Eds
    • Events
  • Events
  • Donate
  • About
    • Our Team
    • Show-Me Institute Board of Directors
    • Fellows and Scholars
    • Our Authors
    • Jobs
  • Contact
  • Explore Topics
    • Education
      • Accountability
      • Education Finance
      • Performance
      • School Choice
    • Health Care
      • Free-Market Reform
      • Medicaid
    • Corporate Welfare
      • Special Taxing Districts
      • Subsidies
      • Tax Credits
    • Labor
      • Government Unions
      • Public Pensions
    • State and Local Government
      • Budget and Spending
      • Courts
      • Criminal Justice
      • Municipal Policy
      • Property Rights
      • Transparency
      • Transportation
    • Economy
      • Business Climate
      • Energy
      • Minimum Wage
      • Privatization
      • Regulation
      • Taxes
      • Welfare
      • Workforce
Show Me InstituteShow Me Institute
Show Me InstituteShow Me Institute
Support the Show-Me Institute
  • Publications
    • Essay
    • Case Study
    • Policy Study
    • Report
    • Testimony
    • Other
    • Newsletter
  • Blog
    • Daily Blog
    • Podcasts and Radio
    • Video
    • Infographics
    • Commentary / Op-Eds
    • Events
  • Events
  • Donate
  • About
    • Our Team
    • Show-Me Institute Board of Directors
    • Fellows and Scholars
    • Our Authors
    • Jobs
  • Contact
  • Explore Topics
    • Education
      • Accountability
      • Education Finance
      • Performance
      • School Choice
    • Health Care
      • Free-Market Reform
      • Medicaid
    • Corporate Welfare
      • Special Taxing Districts
      • Subsidies
      • Tax Credits
    • Labor
      • Government Unions
      • Public Pensions
    • State and Local Government
      • Budget and Spending
      • Courts
      • Criminal Justice
      • Municipal Policy
      • Property Rights
      • Transparency
      • Transportation
    • Economy
      • Business Climate
      • Energy
      • Minimum Wage
      • Privatization
      • Regulation
      • Taxes
      • Welfare
      • Workforce
Economy / Taxes

How to Succeed in Business Without Really Trying

By Michael Rathbone on Nov 5, 2012

Yours truly was recently a guest of New York City while it suffered through a pretty devastating hurricane. Thankfully, I am fine. The worst thing that happened to me was that I gained a few pounds from binging on Oreos and flying home in day-old clothes. Considering what happened to a lot of people in New York, I got off light.

While I was in New York, a gentleman approached my father and offered him $1 for one of my father’s cigarettes. My father declined and I realized that there are people willing to pay $1 for a single cigarette. Cigarettes are addictive, but this display of demand still took me by surprise.  What this indicates is that demand for cigarettes is pretty inelastic.

This is important because one of the arguments in favor of raising taxes on cigarettes is that it will cause smokers to quit, but if the gentleman I encountered in New York is any indication, raising the tax might not get as many people to quit as tax hike proponents believe. At the very least, if someone is willing to offer $1 for a single cigarette, how effective would a 90 cents per pack tax be in deterring smoking?

It is possible that the high cigarette tax in New York encouraged this gentleman to seek cigarettes from sources other than a convenience store (New York state imposes a $4.35 per pack tax on cigarettes). Yet raising taxes by so much brings with it its own set of problems, among them being the incidents of cigarette smuggling that occur in high tax jurisdictions. It is not the government’s job to change people’s behavior through the tax code. If my experience in New York is any indication, it will have a difficult time doing so.

  • Share
  • Tweet
  • Share
  • Email
  • Print
About the author

Michael Rathbone

More about this author >
    Footer Logo
    Support the Show-Me-Institute
    Showmeinstitute.org is brought to you by Show-Me Institute and Show-Me Opportunity.
    • Publications
    • Blog
    • Events
    • Donate
    • About
    • Contact

    Reprint permission for Show-Me Institute publications and commentaries is hereby granted, provided that proper credit is given to the author. We request, but do not require, that those who reprint our material notify us of publication for our records: [email protected]

    Mission Statement
    Advancing liberty with responsibility by promoting market solutions for Missouri public policy.

    © Copyright 2023 All Rights Reserved