Originally Posted by joshbaumgartner

Regardless, the end result was that their chart showed that adding the tax did not increase or decrease the rate of decline in revenue over the time period, as the decline over the illustrated period was about 55% (give or take a couple points for roughly interpreting the exact numbers the chart tries to illustrate) both with or without the new tax.

Thus the chart shows the following four points conclusively:

1) Tax revenue for tobacco will steadily decline over the next 12 years.
2) The rate of decline in tax revenue over the period will not be exaggerated by the introduction of a new tax.
3) Total tax revenue collected over the period will be greater by approximately 15% with implementation of the new tax.
4) The percentage of revenue represented by the new tax will remain constant at about 15% over the duration.

Now all of this is just from the chart itself. If the goal was to illustrate elasticity, it doesn't accomplish this, because that element is not illustrated, even though it is supposedly part of the behind-the-scenes calculations. If the goal was to show that the new tax will cause a greater decline of tax revenue, it doesn't accomplish this, because it actually shows that the new tax has no impact.

As for variables shown, the only three are time (X-axis), revenue (Y-axis), and which tax law is applied (red vs. blue lines). All other variables are hidden, and thus the chart is meaningless in demonstrating their effects.

I don't believe that all four of the above points are true, therefore I doubt the validity of the chart itself. As far as I can tell, a spreadsheet of data points was not there to see, so more precise calculations can not be made.

Personally, I'm not a fan of cigarette taxes (or any of these focused taxes that are ramped up because they target politically vulnerable sectors), but this chart really does a disservice to those arguing against such taxes.



I agree that the government should not be in the business of legislating morality, and you are right that doing so by taxing something excessively is as bad as making it illegal...and in fact worse in my opinion, because tax schemes are like saying it is illegal for the poor, but not those who can afford it. If something needs to be illegal than just do it and we'll debate whether or not that is right to do. Don't use the back door way to enforce your will on people in a way you know would never pass the democratic process.



Well, it didn't of course! I mean sure, some of it did, and in some states more than others. But of course, tax starved state legislatures who are filled with politicians who don't have the nuts to raise honest taxes, nor cut into cherished programs, licked their lips at the incoming cash and by and large treated it as general revenue. Even where the money was earmarked correctly, it often just freed up other money to be spent as they pleased.

To some extent this is our own fault...really to a great extent. We constantly put the sword to any politician that we catch raising taxes on us, but yet we demand that they do all these expensive things. The money has to come from somewhere, so they find low hanging fruit like tobacco and alcohol to tax, they obfuscate other taxes behind a bunch of different schemes, they raise 'user fees' and in some cases enforce the law almost entirely for the revenue gained by fines (speeding being the classic example).

We should have one source for taxes and that is income. Both individuals and corporations. I know a lot of people will scream, but think about it, sales, property, tariffs, fees, fines, all of that is ultimately paid by us the people. So just take it out up front in a way that it can't be hid. Every American will know EXACTLY how much they have to pay and then we'll have grounds to debate whether it is too much, too little, whatever. We can't have that debate right now because no one knows how much they pay in taxes exactly. Debates over individual taxes (sales or cigarette or user fees or whatever) are hard to come to any meaningful result because it is lost in the swamp of all this complex tax scheming.

One tax, up front and clear.