Another Tobacco Store Burglary Today

Unintended consequence of high cigarette taxes

News reports today tell of a Macomb County tobacco store burglary by four men who stole cigarettes and escaped capture after a police chase. This unlawful behavior is a direct and unintended consequence of the high excise taxes imposed on Michigan cigarettes ($2 per pack) statewide.

There are other unintended consequences too. Mackinac Center analysts estimate that 25 percent of all the cigarettes consumed in the Great Lake State in 2013 were smuggled in from other states. Revenue losses to the treasury from smuggling total $298 million.

High tobacco taxes lead to violence against police, property and people in addition to smuggling.

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In late 2013, police officers in Warren had to shoot smoke shop thieves as they attempted to make their getaway with $10,000 worth of tobacco merchandise. “It happens all the time” one police officer said. She said tobacco stores are “targeted.” Wholesalers are sometimes targeted too.

The reason they are targeted is that thieves know cigarettes have value in part due to the high excise taxes imposed on them. Once stolen, they are easily passed off as legitimate smokes elsewhere and sold to other (illicit) distributors or directly to smokers.

There are several ways to address the problems associated with illegal trafficking: cut excise taxes, increase law enforcement efforts or some combination of both.

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