[leetcrew]

i would argue that if taxes are so onerous as to support a black market for a legal good, the taxes are probably much too high. for instance, consider the price of cigarettes in the state of new york. the average cost of a pack (after tax) is $12.85. the federal tax is about $1 per pack, and the state government levies an additional $4.35. without accounting for local taxes that are added in some counties/cities, that amounts to a ~70% tax on a pack of cigs. in addition to being an absurd tax from the get-go (in my opinion), it is also quite regressive, since poor people are significantly more likely to be smokers. when you add states that levy per-pack taxes of less than $1 to the mix, you basically guarantee that people are going to bootleg cigarettes.

[AnthonyMouse]

> i would argue that if taxes are so onerous as to support a black market for a legal good, the taxes are probably much too high.

Nah, when something has large negative externalities you set the tax to the point of mostly discouraging it. That'll be pretty high. It's supposed to be.

> in addition to being an absurd tax from the get-go (in my opinion), it is also quite regressive, since poor people are significantly more likely to be smokers.

"Regressive tax" only applies to necessities. Cigarettes are a luxury item, like lottery tickets or whiskey. Nobody ever starved or froze or lost their job for lack of a cigarette.

[leetcrew]

> Nah, when something has large negative externalities you set the tax to the point of mostly discouraging it. That'll be pretty high. It's supposed to be.

you really think each pack of cigs does $5.35 worth of damage to people other than the smoker?

[AnthonyMouse]

When their insurance premiums or taxes go up to have to cover a million dollars in claims when you get cancer or other long-term chronic health conditions, yes.