Wednesday, October 31, 2007

Isn't this a no brainer

I got a good chuckle out of this:
Flaherty ignores pleas to control black-market cigarettes

OTTAWA — Pleas from senior federal officials for budget measures to help combat the black market in contraband native-made cigarettes went unheeded by Finance Minister Jim Flaherty, newly released documents show. ...

The documents, obtained by The Globe and Mail under the Access to Information Act, warn that Ottawa is suffering substantial tax losses as Canadian smokers switch to illegal, unregulated and untaxed cigarettes – profiting an extensive, cross-border network of organized crime using native land and operatives. ...

But figures in the government's Public Accounts released this month reveal federal tobacco revenues dropped to $1.6-billion in 2006-07, down from $2.97-billion two years earlier – suggesting a loss of more than $1-billion annually.
 Count me under the "not surprised" category.    Despiste the constant nattering from politicians about the "war on smoking" for "public health" reasons, the cries by revenue agents again focuses on the lost revenue.    

When you raise the prices of cigarettes from roughtly $4/pack in 2001-2002 to almost $10 today (over $10 in the Maritimes and Western provinces), you should not be suprised when  organized crime elements move in and take advantage of the "economic profits" you have given them.  Cigarette taxes are subject to the same laws of revenue and rates that the Laffer curve predicts.  

Second, this just proves that prohibition, whether the honest kind (booze in the 20's) or the more gradualist way (smoking the past 15 years) doesn't work, not to mention a gross violation of liberty.

If smoking is that much of a pox on society, then ban it and deal with the political fallout.  If not, then tax is reasonably and in the same manner as booze and you'll get your money to continue being hypocrites on the issue.

1 comment:

Anonymous said...

Notice they don't mention the policing, infrastructure, administration costs that reduce that revenue??

Notice there is no contraband problem; according to the anti tobacco industry? Which they say is the reason that raising taxes work. LOL I think its just ignoring the contraband to prove an agenda that is really the point.

Notice that all the "smoking rate" figures never account for the contraband market. Just 6 months into the Ontario ban (with ever increasing contraband) that the ban made 21% of Ontarians quit. When asked if the contraband market was in the smoking rate the gov't said " its illegal there is no way to put those numbers in", yet they always still have exact figures on how many smokers there is, and how many have quit?

Yeap join gov't where you can make up stats and numbers you want; while ignoring an obvious reason for being wrong.