Latest posts by Jesse Hathaway (see all)
- Work Requirements, Block Grants Would Stop Medicaid’s ‘Pac-Man Doomsday’ - September 17, 2017
- Arizona Legislature Hosts Balanced Budget Amendment Convention Planning Meeting - September 8, 2017
- Congressional Lawmakers Can Help Stop IRS’s Abuse of Small Businesses—But Will They? - August 15, 2017
Michael LaFaive, director of the the Mackinac Center for Public Policy’s Morey Fiscal Policy Initiative, joins Budget & Tax News managing editor Jesse Hathaway to talk about cigarette excise taxes and their effect on consumer behavior. With help from the Tax Foundation, LaFaive examined how states’ taxes drove consumers in all 50 states to purchase cigarettes on the black market.
According to LaFave, states seeking to reduce the size of black markets should not look to higher taxes or more police actions, but instead reduce the differential between their states’ excise taxes and the excise tax rates of neighboring states. Free markets, he says, are the key to reducing the economic impact of cigarette black markets, instead of more taxes or more government.