Look at all these glamorous people eating canapés and drinking champagne in their seersucker suits and sundresses! Oh, no—is that what I think it is? RUN!

If you think it’s not a great idea to fund educational programs via cigarette taxes, you can start to feel like a skunk at a garden party.

Here in the great state of Missouri, on November 8 we will vote on a constitutional amendment that would establish a 60-cent tax per pack of cigarettes to create a fund for pre-K education. Backers believe that it would generate as much at $300 million per year, which would pay for tens of thousands of Missouri children to attend pre-K. They have an impressive advertising campaign and a strong social media presence highlighting the bipartisan support they have assembled for their plan.

On one level, I am sympathetic to their cause. I understand that there are perfectly defensible reasons to support raising cigarette taxes. Smoking is terrible, and we want fewer people to do it. Raising taxes will deter them. If we can provide pre-K with the funds such a tax generates, we’re killing two birds with one stone.

But there is more to this plan than meets the eye.

The largest financial backers of the amendment campaign have been big tobacco companies. Why, you might ask, is an industry looking to increase taxes on itself? Well, paired with the 60-cent tax on all packs of cigarettes is a 67-cent surcharge on so-called “wholesale” cigarettes—cigarettes produced by “small tobacco” companies not party to the landmark tobacco settlement that required the big tobacco companies to pay states in exchange for protection against future lawsuits. Big tobacco pays right around 67 cents per pack into these funds, giving small tobacco an edge in the marketplace. This amendment would eliminate that advantage.

What’s more, many anti-smoking and cancer-fighting groups have decided to oppose the amendment. They argue that a 60-cent tax is not substantial enough to deter folks from smoking.

For those of you keeping score at home: We have a cigarette tax campaign that is funded by big tobacco companies and opposed by the American Cancer Society. If I’m a skunk at the garden party, at least I’m in good company.

Setting the parlor intrigue aside, it’s hard for me to not think that for many Missourians, the real draw here is getting something for nothing. I don’t smoke, so I would never pay this tax. Most Missourians, particularly educated and wealthy ones, don’t either, so they won’t have to pay. If the state generates enough funds, there is good reason to believe that many middle-class children of nonsmokers will get pre-K without their parents having to pay a dime.

If we think one step further though, we see the problem. Cigarette taxes are about the most regressive tax we could possibly institute. Poor people pay the brunt of them. If this tax was going to be passed in 1950, when nearly half the population smoked, it would be spread more evenly across the populace. But it is 2016, and only a specific subset of Missourians smoke. What’s worse, a lot of those people are addicted to cigarettes, and we are preying on that addiction to fund something that we want.

Look at what happened in Arkansas, which instituted a lottery in 2008 to provide scholarships for students to attend college in the state. Like cigarettes, lottery tickets are disproportionately purchased by poor people. In Arkansas, scholarship recipients are disproportionately middle- and upper-income, making the scholarship lottery a pretty clear upward transfer of wealth. Sure, it sounded great at the outset, as non—lottery ticket buying parents eyed scholarships for their kids, but on the backs of the poor? It just feels unseemly.

There are reasons to support providing scholarships to pre-K to students in the state, but the how matters. How we fund those services, how we determine who is eligible, and how we pay for them is critically important. These considerations can get lost in big promises to people with little skin in the game.

The post A Skunk at the Pre-K Garden Party for Cigarette Taxes appeared first on Show-Me Institute.

The post Amendment 3: The Good, the Bad, and the Ugly appeared first on Show-Me Institute.

My colleague Rik Hafer and I decided to compare Missouri’s income taxes to those of other states. In our anaylysis, we went beyond looking at states’ top marginal income tax rates or income taxes collected per capita. Using tax preparation software, we examined how much an average family of four would have to pay in income taxes in each state. This is a new way to look at how income taxes actually affect households by giving people an idea of how much they would owe if they were to live in a particular state.

So where does Missouri rank? Give our paper a look and find out.

20150814 – Compairing Income Tax Liability Accross States – Hafer_Rathbone.pdf

The post Show-Me Institute Presents: Comparing Income Tax Liability Across States: Where Does Missouri Rank? appeared first on Show-Me Institute.

The latest anti-smoker proposal aims to raise the cigarette taxes to around 90 cents a pack (cigarette taxes in Missouri currently are 17 cents a pack) in order to fund scholarships for students. On the surface, this proposal sounds appealing, but raising excise taxes in order to fund education is not good policy. There are a couple reasons why this is the case: First, cigarette taxes are regressive. Poor people smoke more than higher-income individuals, and smoking takes up a higher percentage of their income.

Second, an increase in cigarette taxes can harm Missouri businesses. More people commute into Missouri than out of it. Our low excise taxes serve as an inducement for out-of-state visitors to purchase alcohol, gasoline, and cigarettes in Missouri instead of Kansas and Illinois. The chart below from  showmedata.org shows just how low Missouri’s taxes are in comparison to Kansas and Illinois (Missouri is in yellow).

If this proposal becomes law, Missouri’s cigarette tax rate will be higher than in Kansas. It isn’t hard to imagine commuters on State Line Road choosing a Kansas convenience store over a Missouri one if products are cheaper.

Now, some might argue that raising cigarette taxes is good in and of itself because doing so will reduce cigarette usage and improve public health. That’s partially true, but the effect is small. If the increased tax revenue would be spent on treating smoking-related illnesses, then the conversation would be worth having. However, even if we agreed that a tax hike should go to increased health spending, if taxes go up too much, people would simply resort to smuggling.

Personally, I’m not a fan of smoking. My grandfather suffered from emphysema due to his smoking. However, just because I don’t like an activity doesn’t mean I believe the government should treat it as a piggy bank for more spending. Let’s find ways to cut spending, not increase it.

The post Still Coughing Up More for Education appeared first on Show-Me Institute.

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.

The post How to Succeed in Business Without Really Trying appeared first on Show-Me Institute.

In this appearance, Stokes and the host discuss topics such as the recent supreme court decision overturning Missouri’s legislatively imposed cap on non-economic damages in lawsuits, the cost of malpractice insurance, the back-to-school sales tax holiday, the state’s uniquely low cigarette tax rate, and the imminent primary election.

The post McGraw Milhaven – David Stokes on KTRS appeared first on Show-Me Institute.

I, and other members of the Show-Me Institute, have opposed raising taxes on cigarettes. However, if Illinois wants to send more of its residents fleeing to Missouri to buy cigarettes, then I will not talk them out of it. We could use the money. In fact, some legislators in Illinois fear that is exactly what will happen: “”We are going to lose revenue . . . from goods purchased across the border when people go to buy their cigarettes,” Illinois Sen. Kyle McCarter (R-Highland) said.

When the Show-Me Institute asked several visitors from Illinois whether they planned to stock up on cigarettes and other goods while in Missouri due to our lower excise taxes, many responded in the affirmative. It is likely that many more Illinois residents will feel the same way when this increased tax goes into effect.

So when people in Missouri advocate for increasing cigarette taxes, think about the state’s price advantage compared to some of its neighbors. Think about the potential customers that will be lost when the state no longer makes it worth their while to travel across the border to buy goods here. Also, think about how increasing taxes on cigarettes would harm the poor the most. Consider these things and be thankful that Missouri has not followed Illinois’ lead, at least, not yet.

The post Reminder From Illinois: It Could Be Worse appeared first on Show-Me Institute.

While growing up in the small border town of Atchison,
Kan., my father, uncles, and family friends made frequent trips
over the Amelia Earhart Bridge to a small convenience store in
Buchanan County, Mo. They usually returned with a full gas
tank and small quantities of alcohol or cigarettes. I was too
young to understand what prompted these excursions. Now I
know. My father and others took advantage of Missouri’s low
excise tax rates on gas, alcohol, and cigarettes. As these trips
continued, sales and tax revenue were redistributed from Kansas
to Missouri. While the convenience store in Missouri remained
busy, the Shell station near the bridge in Atchison was often
empty.

Missouri benefited at Kansas’ expense as a direct result
of maintaining a lower tax rate in a competitive marketplace. In
2009, the QuikTrip on Southwest Blvd. in Kansas City, Kan.,
moved its location 100 feet into Missouri to take advantage of
the lower excise taxes. However, the situation that prompted this
move may be about to change.

Last fall, the Missouri Secretary of State gave approval to
a coalition of Missourians, led by the American Cancer Society,
to circulate a petition proposing an increase in the cigarette tax
from 17 cents to 90 cents per pack, a whopping 429 percent
increase. If passed, this proposal will stop the heavy cross-over
traffic of people coming to Missouri from other states to buy
cigarettes at a bargain price. In fact, business likely will shift in
the opposite direction – out of Missouri into other states.
Kansas’s 79-cent cigarette tax would certainly serve as an
appealing alternative to Missouri’s potential 90-cent tax. Under
the proposed increase, those who purchase cigarettes in Missouri
would pay $2.20 more per carton than they would if they
purchase cigarettes in Kansas.

While raising excise taxes might appear to be a simple way to
increase revenue, it can backfire and may even cause a loss in net
cigarette sales. Missouri’s two largest metropolitan areas, Saint Louis
and Kansas City, border states with much higher cigarette taxes,
prompting residents of neighboring Illinois and Kansas to make their
purchases here. Missouri’s 17-cent tax is certainly attractive to residents
of Illinois, where the tax rate is 98 cents, and Kansas, where the rate is
79 cents. Missouri benefits when residents of other states who come to
Missouri for work, sporting events, etc., voluntarily make such purchases
here.

Missouri Attorney General Chris Koster, a proponent of raising
Missouri’s cigarette tax, claimed in the Kansas City Star that a fivefold
increase in the state’s cigarette tax would lift revenue by a commensurate
amount – from $90 million a year to close to $500 million. But Koster’s
figures do not account for the major decrease in sales likely to occur
should the tax hike become a reality. It is silly to think that cigarette
sales will remain the same if Missouri smokers are required to spend
$14.60 more per carton of cigarettes. Remember, when you tax
something, sales will decrease. Increasing a cigarette tax might result in
less smoking, but it will also drive down purchases of cigarettes.

Patrick Fleenor, former senior economist at the Tax Foundation,
provides a telling example: When Michigan increased its cigarette tax
rate from $2.50 to $7.50 per carton (25 cents to 75 cents per pack), sales
decreased 26.7 percent. During the same period, cigarette sales greatly
increased in Indiana and other neighboring states with lower cigarette tax
rates. Should Missouri follow in the footsteps of Michigan, convenience
stores in Atchison, Kan., are likely to become much more profitable and
Missouri will experience a loss of cigarette revenue because fewer
cigarette will be sold on the eastern side of the border.

Amy Lutz is an intern at the Show-Me Institute, which promotes market
solutions for Missouri public policy.

The post Why a Whopping Increase in Missouri’s Cigarette Tax Is a Bad Idea appeared first on Show-Me Institute.

For instance, stores in Missouri that are on the border with other states attract business from people shopping here in order to take advantage of the state’s low excise taxes. Show-Me Institute intern Amy Lutz recently wrote an op-ed that details the impact such a tax hike could have on interstate commerce.

Also, an increased tax on cigarettes would disproportionately harm the poor. The Post-Dispatch article mentions that raising taxes is an effective method for getting people to quit smoking. Do increased cigarette taxes result in significantly fewer smokers? If smoking is bad for us, and it is OK to increase taxes on that, where does it end? What next, enormous taxes on sugar to finance heavy broccoli subsidies? What about an obesity tax? Isn’t there something offensive about government micromanaging our lives?

The post Missouri’s Low Cigarette Taxes (And Why They Should Stay That Way) appeared first on Show-Me Institute.

Why are tax hikes even on the table? Legislators have not even cut all waste and low-priority programs from the state budget, never mind bigger ticket items such as higher education and medical programs for the blind. Considering that the Missouri House passed an appropriations bill that includes funding for the Missouri Wine & Grape Board along with ethanol subsidies (and that is only for the Department of Agriculture), the state has plenty of places to cut.

The Star editorial is not all bad. It does call for reigning in tax credits, which the Show-Me Institute has pushed for repeatedly. However, it also calls on raising the cigarette tax. The Show-Me Institute has written on this issue and the situation is the same now as it was then; raising taxes on cigarettes is not the cure for what ails Missouri.

Missouri needs a healthy environment so its economy can thrive. That does not just mean low taxes; it also means lowering regulatory burdens. Doing so will ensure that the state receives enough revenue so that all PROPER functions of government have enough funding to work effectively.

The post Contra the KC Star: Tax Increases are NOT the Answer appeared first on Show-Me Institute.

State Sen. John Lamping, R-Ladue, has followed through with his plan to file a bill that eliminates state income taxes on the first $2,000 in individual income and replaces the money by hiking the state’s cigarette tax — now among the nation’s lowest.

Lamping says the bill is revenue neutral.

Under his proposal, SB 638, no Missourian would pay taxes on the first $2,000 of earned income. Now, state income tax is levied on all income, no matter how small. That cut would cost the state $128 million a year.

As David Stokes noted Thursday, non-smokers and infrequent smokers would be net beneficiaries if the legislation is implemented. The problem is, who would not be a net beneficiary? Smokers tend to be poorer than non-smokers, and any hike in the cigarette tax will tend to hit those living in poverty fairly hard. In 2009, the CDC found that “[t]he prevalence of current smoking was higher among adults living below the federal poverty level (31.1%) than among those at or above this level (19.4%).” Will there be a deterrent effect if there is a marginal increase of 26 cents in the cigarette tax? Possibly, but it also is fairly likely that what the poor gain from the income tax reduction could get eviscerated by the cigarette tax hike. If income taxes were exempted at a higher level, a “worse off” scenario for poor smokers would be less likely.

But there is an alternative to a straight cigarette tax hike if legislators really want to exempt income from the individual income tax. I wrote last week that major reductions to the corporate income tax could be made with the elimination of millions of dollars in failing tax credits. There also is ample room for a deeper cut to the individual income tax that would increase the likelihood that the poor would be net beneficiaries in a tax system rebalancing. Aside from the drastic hikes in the cigarette tax that have been proposed elsewhere, which would exacerbate the problem for the poor, a reduction in tax credits could account for much of the revenue required to make major cuts to the individual income tax.

Put more succinctly, to reduce income taxes, other taxes do not necessarily have to go up if state tax credits go down to a more manageable and appropriate level. Instead of picking winners and losers, let everyone benefit. It would make for a better Missouri and a better-balanced tax system.

The post Legislators Can Rebalance Tax System — And Make Missouri More Competitive — Without Raising Taxes appeared first on Show-Me Institute.

A gas station and liquor store were located just across the border on the other side of the bridge; their parking lots rarely had an open space. Conversely, in Atchison, the liquor bottles and cigarette packs collected dust on store shelves while gas pumps remained unused. The higher excise taxes in Kansas on these products drove business away from my home state and into her eastern neighbor’s economy.

This scenario soon may become a distant memory. The American Cancer Society is leading a coalition that submitted a ballot initiative to the Missouri Secretary of State on Sept. 20. The proposed measure is expected to generate $308 million annually through tax increases on tobacco products, primarily cigarettes.

A similar initiative failed in 2002 and 2006. Like the 2006 vote, this initiative includes a proposed 80-cent increase in the cigarette tax, bumping the total tax to 97 cents if passed. This proposition, however, will not affect just the Show-Me State, but surrounding states as well, a point the Show-Me Institute has covered in the past. As David Stokes, a policy analyst for the institute, alluded to in an Aug. 4 blog post and video, Missouri’s neighbors often are propelled to make tobacco purchases in this state because of its attractively low cigarette tax.

The cigarette tax in Kansas now stands at 79 cents, 18 cents cheaper than the proposed tax increase in Missouri. What is intended to be a profitable deal for Missouri will prove to be more beneficial for the state of Kansas. The incentive for Kansas to cross the border in pursuit of a cheaper pack will be eliminated. Missouri stands to lose some revenue from the current cigarette tax; other revenue-increasing proposals, such as the fair tax, would not balance out this budget loss.

Should this initiative pass, the eastbound cigarette-seeking Kansans who flood into this state might be replaced by Missourians driving in the opposite direction.

The post The Missouri Cigarette Tax: A Partial Solution to Kansas’ Economic Woes appeared first on Show-Me Institute.

I wonder whether they caught my recent op-ed about cigarette tax hikes. I argued that raising the rate would not solve Missouri’s budget woes. Instead, it would cause people to buy their cigarettes in other states that have lower taxes. Cigarette tax hikes are no quick fix.

In New Hampshire, they want to cut the cigarette tax by 10 cents, to $1.68 per pack. In New Jersey, even more, by 30 cents, to $2.40 — and, in Rhode Island, by a whopping $1 a pack to $2.40. All are still way above Missouri, which, at 17 cents per pack, has the lowest cigarette tax in the nation.

I’m not pro-cigarette (my Dad’s a cardiologist and very anti-cigarette), I’m pro–low taxes. Cutting taxes on cigarettes and other “sin goods” will promote economic activity and personal liberty in the state.

The post Cutting Cigarette Taxes for Budget Health appeared first on Show-Me Institute.

I credit lawmakers in Missouri for being forthcoming about the fact that the purpose of this tax hike is to generate tax revenue, not to discourage bad behavior. Lawmakers often attempt to discourage smoking on moral, ethical, or public health grounds with higher taxes, but that’s not the issue here — money is. No matter the reason for higher cigarette taxes, though, this policy won’t solve the state’s money problems. The tax hike will cause smokers to buy fewer cigarettes. Some will smoke less as a result, and others will quit entirely. Their personal health may benefit, but they won’t contribute any cigarette tax revenue.

Those who do continue to smoke will buy fewer cigarettes in Missouri because they will no longer be getting a comparative price break. By keeping its tax rate low relative to other states, Missouri encourages those who do smoke to buy their cigarettes within the state, and it motivates non-residents living close to the border to shop here, as well. After a rate increase, smokers living near the border would be much less likely to buy their cigarettes in Missouri when they come here to work and to attend sporting events downtown, instead buying their cigarettes in their home states and generating tax revenue there.

The eight states that border Missouri have an average tax rate of $0.90. If lawmakers hike the tax rate by $1, which is what they propose, the tax rate in Missouri will exceed the tax rate in all but one of its border states. Individuals will tend to vote with their feet and buy cigarettes elsewhere, and the state will see less tax revenue as a result.

Missouri residents and businesses would be better off if the state government tried other strategies to close the budget deficit instead. State officials should reform spending and operate within their means, looking for ways to lower tax rates across the board rather than raise them. Missouri would attract more business activity and, consequently, more tax revenue if policymakers fostered a low-tax environment.

Christine Harbin is a policy analyst for the Show-Me Institute, an independent think tank promoting free-market solutions for Missouri public policy.

The post ‘Sinful’ Tax Collections Won’t Fix Budget Woes in Missouri appeared first on Show-Me Institute.

I credit lawmakers in Missouri for being forthcoming about the fact that the purpose of this tax increase is to generate tax revenue, not to discourage bad behavior. Lawmakers often attempt to discourage smoking on moral, ethical or public health grounds with higher taxes, but that’s not the issue here — money is. No matter the reason for higher cigarette taxes, though, this policy won’t solve the state’s money problems. The tax increase will cause smokers to buy fewer cigarettes. Some will smoke less as a result, and others will quit entirely. Their personal health may benefit, but they won’t contribute any cigarette tax revenue.

Visit the Southeast Missourian’s site to read the rest. And, if you’d like to read more on the subject, check out an earlier commentary about cigarette taxes by former Show-Me Institute editor Tim Lee.

The post Cigarette Taxes Won’t Solve Missouri’s Budget Problems appeared first on Show-Me Institute.

The best part–and this is why the health department needs to sign on–is that they’ll take the cigarettes back to Illinois to smoke them, meaning their later health problems will be issues for Illinois to deal with, not Missouri. So Missouri would profit, generating more money for education, highways, and maybe for health programs, and Illinois would have to deal with the problems smoking causes. […]

Let’s all root for Illinois to pass this dollar-a-pack cigarette tax increase.
It can mean so much to The Smuggler State.

States already do use selective tax rates to advertise products, to a certain extent. Recently, I saw such an advertisement for cigarettes on the Wisconsin-Illinois border.

I realize that the author is largely being facetious, but there is truth in his analysis that Missouri would likely experience benefits as a consequence of this policy. By keeping its tax rate on cigarettes low relative to other states, Missouri will encourage a marginally higher number of individuals to buy cigarettes in Missouri instead of in their home states.

The post Missouri: The Show Me Smuggler State appeared first on Show-Me Institute.

While I was loitering outside, I noticed the following sign on the front of the building:

This sign is fantastic! It acknowledges and capitalizes on the fact that tax rates affect consumer behavior. As contributors to Show-Me Daily have discussed previously, businesses and individuals tend to vote with their feet. Differences in tax rates across borders encourage individuals to shift their purchases to areas that have lower taxes.

The tax rate on cigarettes in Illinois is $0.98 cents per pack of 20. In Wisconsin, this rate is $2.52 per pack of 20. This means that an individual will pay (2.52-0.98)*10 = $15.40 more in excise taxes on cigarettes in Wisconsin than she would in Illinois. (I’m assuming that state and local sales taxes account for the $0.85 discrepancy between this number and the sign.)

I suspect that at least some number of Wisconsin residents shift their cigarette purchases to Illinois when they can, which results in higher tax revenues and more business activity in Illinois. I also suspect that this Road Ranger has higher cigarette sales than an identical gas station that’s located on the Wisconsin side of the border, as a direct consequence of this difference in tax rates.

In comparison, Missourians enjoy the lowest taxes on cigarettes in the nation, at $0.17 cents per pack. Although there have been frequent calls to increase this rate, the economy in Missouri benefits from the marginal increase in tax revenues as a direct consequence of this policy. Increasing the state tax rate on cigarettes would shift some marginal amount of this activity from Missouri to other locations.

The post Selective Tax Rates in Advertising appeared first on Show-Me Institute.

The Daily RFT blog picked up on her post, but didn’t seemed particularly swayed by an argument for liberty. I had a conversation yesterday morning with my coworker Abhi Sivasailam, who suggested an efficiency argument against taxation, and pointed me to a National Bureau of Economic Research working paper titled “Cigarette Taxation and the Social Consequences of Smoking.” An argument that many people make in their attempts to justify cigarette taxes is that such a tax helps to internalize the additional costs of smokers — but this study concludes that the societal cost is already internalized.

From the study’s abstract:

Detailed calculations of the financial externalities of smoking indicate that the financial savings from premature mortality in terms of lower nursing home costs and retirement pensions exceed the higher medical care and life insurance costs generated. The costs of environmental tobacco smoke are highly uncertain, but of potentially substantial magnitude. Even with recognition of these costs, current cigarette taxes exceed the magnitude of the estimated net externalities.

So, if the costs of smoking are already largely internalized, imposing additional taxes on cigarettes is inefficient. It’s also worth pointing out that cigarette taxes are regressive, and any argument that holds the state should appropriate money from smokers to pay for other programs places an undue burden on a vulnerable group.

Is it horrible that people die from smoking cigarettes? Yes. Is it horrible that people die in automobile accidents? Yes, but that doesn’t constitute a rationale for taxing cars out of existence, or cupcakes, or the many other things that people use and enjoy that can also contribute to future poor health. If free, consenting adults choose to smoke, despite the known risks, it is their prerogative.

The post Smoke Screen Arguments appeared first on Show-Me Institute.

Efforts to increase Missouri’s cigarette tax have been around for a while, and are often couched as an incentive to get smokers to quit and improve public health. The issue is now back on the radar in states like Missouri that are struggling to balance their budgets.

Using the Show-Me IDEAS tool, I was able to compare cigarette taxes across states. This chart shows the nation’s average tax at around $1.30 per pack, far higher than Missouri’s 17 cents per pack:

Click image to enlarge

Illinois legislators recently put a $1 per pack hike proposal on hold until later this summer. If this goes through in Illinois, smokers along the border and in the Metro East can look to Missouri for the cheapest cigarettes in the nation — but only if Missouri can hold on to its new title.

Although the majority of Americans don’t smoke, a new poll suggests that most voters would favor increases in tobacco taxes as an alternative to state budget cuts. This kind of discrepancy demonstrates one of the main problems with cigarette taxes — those least directly affected by the tax feel justified in imposing a tax on those most affected.

John Stuart Mill had it exactly right. Only six years before the appearance of cigarette taxes in America, he wrote in On Liberty:

The majority have not yet learnt to feel the power of the government their power, or its opinions their opinions. When they do so, individual liberty will probably be as much exposed to invasion from the government, as it already is from public opinion. But, as yet, there is a considerable amount of feeling ready to be called forth against any attempt of the law to control individuals in things in which they have not hitherto been accustomed to be controlled by it; and this with very little discrimination as to whether the matter is, or is not, within the legitimate sphere of legal control; insomuch that the feeling, highly salutary on the whole, is perhaps quite as often misplaced as well grounded in the particular instances of its application.

The post Cheapest Smokes in the Nation appeared first on Show-Me Institute.