From: Moody on the Market
A problem that has long plagued border counties like Berrien, Cass and St. Joseph Counties here in Michigan is increasingly being felt in other border locations nationwide. It’s the issue of cigarette smuggling. According to a new study by researchers with the Mackinac Center for Public Policy and the Tax Foundation, high state cigarette excise tax rates continue to encourage tax evasion and avoidance around the country.
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Todd Nesbit, a Senior Lecturer in Economics at Ohio State University is also co-author. He points out that, “Most consumers are very rational shoppers.” He notes, however, that, “As the price of cigarettes rise from excise tax hikes, many look for cheaper alternatives in other taxing jurisdictions. A price hike likewise acts as a signal to organized crime that there are profits to be made smuggling smokes on a large scale to distant locales.”
