The Great Lakes State currently levies a cigarette tax of $2.00 per pack. Gov. Jennifer Granholm has proposed a 25-cent per-pack cigarette tax increase.[71] We estimate that this hike would raise Michigan’s overall smuggling rate to 28.3 percent of the state’s total consumption and the commercial smuggling rate to 18.8 percent — up from 26.0 percent and 16.6 percent, respectively. Legal sales would drop 3.3 percent, but revenue to the state is estimated to increase by approximately 9 percent.

[71] Scott, “Proposed Increase of Michigan Beer, Cigarette Taxes to Boost State Revenue Draws Fire from Industry, Lawmakers,” The Grand Rapids Press, Aug. 3, 2009, http://www.mlive.com/news/grand-rapids/index.ssf/2009/08/proposed_increase_of_michigan .html (accessed Nov. 4, 2010).