During the first six months of 2009, the volume of tobacco products sales across Maryland have fallen by 25. Have the 25 percent of regular smokers that live in Maryland simultaneously dropped smoking looking for a healthy life? I don’t think so.
The major reason for such a dramatic drop is the increase in the state cigarette taxes, that made Maryland become the fourth state in the list of state with highest cigarette taxes.
Maryland smokers currently have to pay $2 for each pack of cigarettes they buy across the state. The previous tax was $1-per pack.
One part of smokers decided to limit the consumption of precious smokes, and the other part simply turned their heads to flourishing black market.
Legislators state that they have increased cigarette taxes to help Maryland smokers kick down their harmful habit in favor of a more healthy life. However, this statement is rather ridiculous since the last thing that those adult smokers need is a nanny state telling them what they should do.
Nevertheless, as we all understand the actual aim of the tax increase is collecting more money to help cash-strapped state to cope with dramatic hole in the budget that local government has created by their own. Their intentions are rather clear, since it became popular recently to tax the unpopular minority instead of protecting their personal rights and freedoms.
Thus, as the independent analysts had anticipated, the amount of profit generated by exceptional tobacco taxes has been mush smaller than the government expected. It is just another proof to the axiom that lack of economic knowledge results in revenue losses.
Before approving the tax increase, the Maryland lawmakers should have looked on the state map better. The matter is that every state neighboring Maryland has lower cigarette taxes: Pennsylvania has a $1.35-a-pack, Delaware’s smokers pay $1.15 tax, Virginia is home to one of the lowest taxes in the nation with modest 30 cents per pack, and West Virginia has 55 cent-per pack cigarette tax. Since Maryland is very small in size, its residents prefer to cross the borderline to stock up for cigarettes in the neighboring states.
It was proven a long time ago, that the more restrictions the lawmakers place on a product, the more flourishing the black market becomes. Smokers seek cheaper cigarettes and the black market supplies them, so it is not surprising that police authorities claim they expect the number of detained cigarettes smugglers to double this year in comparison to the previous years.
Maryland authorities state thy have taken control on the smugglers of cigarettes. Police agents have been standing across the borders of Maryland to detain every person who has more cigarettes in their cars than the legal limit permits (two packs), and every individual caught on smuggling would face hefty fines and even prison terms.
Well, in my humble opinion, it is just a plain stupid initiative. I do really think that police officers should better crack down the gangs of smugglers instead of detaining people looking for the opportunities to buy cigarettes at lower cost since they simple could not afford paying $8 for every cigarette pack.