[Photo of Todd Nesbit, Ph.D.]

Todd Nesbit, Ph.D.

Ohio State University

Todd Nesbit, Ph.D., is senior lecturer in economics at Ohio State University. Professor Nesbit was a double major in economics and mathematics at Capitol University and received his doctorate at West Virginia University. His dissertation, "Essays on the Secondary Impacts of Excise Taxation: Quality Substitution, Tax Earmarking, and Cross-border Effects," established him as a national expert in cross-border consumption. Since 2005, he has authored or co-authored a number of cross-border and excise-related working papers, including "The Effects of Excise Taxes on Product Quality, Evidence from the Gasoline Market" and "Effects of Wine and Spirits Taxes in the Presence of Spatial Autocorrelation."

From Todd Nesbit, Ph.D.

High Cigarette Taxes Lead to More Smuggling

Study provides new estimates of smuggling rates for each state … more

Cigarette Taxes and Smuggling: A 2016 Update

Click here to view the PDF of the full study.
Introduction
Since 2008 the Mackinac Center for Public Policy — and more recently in conjunction with the Washington, D.C.-based Tax Foundation — has worked to estimate the degree to which cigarettes are smuggled into and out of American states. Our research, and that of other scholars too, suggests that smuggling is a rampant problem, particularly in states with high cigarette excise taxes.
Unintended and unforeseen consequences are a frequent problem in public policy. Few politicians realize when they vote for higher excise taxes that doing so may dramatically increase cigarette-related crime, such as smuggling. These crimes not only deprive local and state governments of tax revenues, they also tend to descend into violence, which produces all sorts of unnecessary damage. Policymakers should take these realities into consideration when contemplating how much to tax cigarettes.
This report analyzes the relationship between cigarette tax rates and cigarette smuggling rates. It relies on the same statistical model used in our previous studies, but uses the latest available data from 2014. New York State once again claims the highest smuggling rate in the nation. In fact, according to our analysis, New Yorkers consume more smuggled cigarettes than they do legally taxed ones. New York state has the highest excise tax rate on cigarettes in the country at $4.35 per pack and New York City adds another $1.50 tax. Arizona, Washington state, New Mexico and Minnesota round out the top five states for percentage of in-bound smuggling. Michigan ranks 12th, down two positions. … more

Smuggling Would Rise Along with Tobacco Tax

West Virginia Excise Tax Hike Proposal Invites Smugglers

How Raising Cigarette Taxes Could Increase More Than Revenue … more

LaFaive and Nesbit Op-ed Published in Lincoln Journal Star

Raising cigarette taxes would increase smuggling … more

$1 Cigarette Tax Hike Helps Smugglers, Not Health Outcomes

Prohibition by price drives consumers to alternatives … more

California Tax Bills Asking for Trouble

Lawmakers raising cigarette excise taxes are well-intentioned but misguided … more

Michael LaFaive and Todd Nesbit: R.I. set to lose tobacco revenue

Increasing cigarette tax would be counterproductive … more

Guest Post: Kansas Excise Tax Hike Proposal a Bad Choice

The unintended consequences of higher taxes … more

Cigarette Smuggling Still Rampant, Problematic

Automatic Tax Increases are Not Good Policy

Letter: Continued cigarette tax policy will increase smuggling from other states … more

Smuggling Rampant in Minnesota

The unintended costs of cigarette 'sin' taxes … more

Excise Tax Hike on Cigarettes Irrational Choice for Washington

Fewer legal sales doesn't necessarily mean lower smoking rates … more

State Out Nearly $300M from Cigarette Smuggling

Yet another unintended consequence of high excise taxes. … more

Cigarette Smuggling Still Rampant in Michigan, Nation

Cigarette Smuggling Undermines Tax Revenue

Michigan lost $350 million in 2012. … more

Center Research Question Addressed

Cigarette Smuggling Remains High in Michigan, Elsewhere

Michigan a Cigarette Smuggling Haven

10th highest rate in the nation, according to new study. … more

Prohibition by Price

Analysis: State Alcohol Control Law Expensive, Unfair, Ineffective

Liquored Up: Michigan Government Should Exit Its Liquor Wholesale Business

Cigarette Taxes Fuel Rampant Smuggling

Cigarette Taxes and Smuggling 2010

Authors Michael LaFaive and Todd Nesbit update their 2008 cigarette taxes and smuggling study titled “Cigarette Taxes and Smuggling: A Statistical and Historical Review.” The update includes new statistical data to reflect the 27 state-level tax increases that occurred between January 2007 and the end of 2009 in Michigan’s 48 contiguous states. … more

Cigarette Taxes and Smuggling

In this study, the authors consider cigarette smuggling from two angles. First, they employ a statistical model to estimate the degree to which cigarette smuggling occurs in 47 of the 48 contiguous U.S. states. Second, they review the historical experiences of three states — Michigan, New Jersey and California — known to have problems with cigarette smuggling. The author's findings suggest that state policymakers should reassess the value of cigarette taxes as a revenue and public health tool. … more

Officials Warm to Private Fire Protection