Missouri voters have repeatedly defeated attempts to hike cigarette taxes in their state. By contrast, Illinois doubled its cigarette taxes in 2012, from $0.98 per pack to $1.98. There’s a lot of room for arbitrage in the space between the taxes on a pack of smokes in Missouri and the government’s take in Illinois—and that’s before we even get to the special taxes imposed by Chicago.
Is Illinois raking in lots of cash from these taxes? Hardly, writes J.D. Tuccille. Cigarette tax revenue in Illinois actually decreased 8 percent from 2016 to 2017 (it fell the previous year, too).
If high cigarette taxes aren’t generating revenue—and instead are fueling a huge cross-border smuggling industry—perhaps such sin taxes at least discourage smoking, as advocates claim. Except, as Tuccille points out, the data doesn’t really support that conclusion.
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