Friday, January 7, 2011
Cigarette Tax
The new taxes proposed to fill the gap in the Illinois budget include a dollar a pack increase on cigarettes, nearly doubling the current tax level on them. While that won't affect locations in the state that are a couple of hours away from the border, cigarette sellers in cities closer to state lines will certainly see an impact as smokers drive the extra to save an extra $10 per carton in taxes. I already know people in C'dale who drive to Paducah to buy their smokes because of the tax differential and the extra buck will likely convince more heavy smokers to make the trip.
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According to the article, the current tax is about $1/pack and raises $560 million. The study says that doubling the tax will bring in an additional $377 million. From those numbers, the expectation is that the number of packs sold statewide will drop from about 560 million to about 468.5 million. The drop would include people who drive out of state plus people who quit, cut back or never start because the price is too high.
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