Take cigarette taxes, for example.
Liberals have successfully raised taxes on tobacco products to the highest point they have ever been. Today, the federal tax rate on cigarettes is $1.0066/pack. However, state and local taxes tack several more $$$s onto the price of a pack of cigarettes. Today, one package of cigarettes costs $6.16 in Chicago.
The liberals' logic was simple: Tax cigarettes. End smoking. Use the tax revenues generated by the taxes to fund additional entitlements (aka, "investments").
Courtesy of the Tax Foundation, consider the transcript of a U.S. Senate Finance Committee hearing concerning the consequences of those Draconian taxes on cigarettes. For example, for the State of New York:
- Since 2006, the tobacco tax rate in New York has risen 190% to $4.35/pack in 2014.
- Concurrently, the smuggling rate has risen 59 percent. Today, 56.9% of cigarettes consumed in the state are smuggled in from other jurisdictions.
And it's not just New York. Arizona, New Mexico, Washington, and Wisconsin also have high rates of cigarette smuggling which involves:
- counterfeit versions of brand-name cigarettes,
- counterfeit tax stamps; and,
- hijacked trucks.
Also note: China produces a lot of counterfeit cigarettes, to the tune of an estimated 400B cigarettes/year.
With what outcomes? Consumption decreases. Many of those who do somke cigarettes purchase counterfeit versions.
That's how liberal taxation policy works in the real world. In the end, they always stick it to the taxpayers which currently is only 48% of Americans.
Let the discussion begin...
To read the Tax Foundation transcript, click on the following link:
"Tobacco Taxation and Unintended Consequences: U.S. Senate Hearing on Tobacco Taxes Owed, Avoided, and Evaded."