Tuesday, February 12, 2008

Several thoughts on cigarettes 

Spurred by an email from Marcus Aurelius, who probably thinks I forgot about it, some random notes on smoking that I've found over the last few days.
  1. Mark was initially pointing me towards a summary article on the economic effects of smoking bans from the St. Louis Federal Reserve. Be it on Delaware racinos or bars and restaurants around the University of Missouri, the effects appear to be negative, though with levels that are rather modest. One might wonder if somehow bar owners could be compensated for their losses based on the evidence provided. That would drive up city or state expenditures, however.
  2. When you tax an activity in a locale, the typical result is that business shifts to the jurisdictions that don't bear the tax. The Tax Foundation highlights tax evasion from a $3 a pack increase in taxes on cigarettes in New York City. Much of the tax evasion for outstate New York residents (who only faced a $1.50 a pack hike) went to Native American reservations. Just as hypothesized by Minnesotans opposed to our smoking ban, " small businesses tend to be the ones hit hardest" by the cigarette tax increase in NYC.
  3. When two jurisdictions are adjacent to each other and one has a smoking ban but the other doesn't, the result appears to be more drunk driving, and more fatalities. Of course, our friends in Minnesota will argue this is just cause for a statewide ban, and for actively lobbying neighboring states to ban as well. Is a nationwide ban far off?

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