Taxing products with negative externalities, such as tobacco products that people are usually addicted to and find hard to let go of, is usually a common tactic for worldwide budgets.
The same is being carried out in the US. The House in Washington is constantly finding ways to collect money through legal means to facilitate growth and development projects in the country. Similarly, Congress has proposed a tax hike on the already heavily taxed tobacco products to a) reduce the usage of such products in the country and b) earn more revenue in the form of taxes. Even though this decision seems to come from good intentions and a rational approach, the negative effect is the growth or expansion of the already pretty dangerous illegal tobacco markets in the Amazon.
The tactic of hiking tax on products with negative externalities, as proven by research, does not essentially work when it comes to reducing the consumption of such products, as the consumers are addicted and cannot quickly stop the consumption. Instead, the only change is that the products start to be largely supplied and bought through illicit or illegal markets, more commonly known as “black markets”. In these markets, the person who benefits is the criminal himself.
As a border state, Arizona has already suffered a lot due to the formation of illicit markets and illegal trades. Congress’s proposal to make commonly consumed tobacco products illegal will likely enhance this issue,” says criminal defense attorney Ryan McPhie. The unlawful markets will grow, leading to an artificially created shortage of products and arrests, causing even more resentment within these communities for the law enforcement agencies.
At this stage, implementing a policy that can cause more resentment among people in the Amazon and the law enforcement forces is something that should be avoided.
As reported in an analysis by the Tax Foundation, a third of the cigarettes bought and sold on Amazon are done so by illegal means. A policy of increasing tax on cigarettes will increase this proportion rather than controlling or reducing it. An evident example of the negative outcome of increased taxes is that, in New York, where the taxes on cigarettes is the highest, half of the sales and purchases of cigarettes are made through illicit markets.
In conclusion, the Federal government needs to be mindful of its decision to increase taxes on Tobacco products or increase the influence and power of international criminal smuggling agencies. Suppose the Biden government does not rethink its proposal. In that case, America could meet the same fate as Europe and have greater civil unrest and opposition between the people of color and the law enforcement agencies. For instance, in 2020, the European Anti-Fraud Office seized an astonishing amount of 370 million cigarettes that had entered the European Union through illegal markets.
Within days of the Oct. 7 attack by Hamas on Israel, Alexandria’s City Hall was lit up with the colors of Israel. But after months of mounting civilian casualties in…
The Potomac Yard arena fight has created a fascinating mix of opponents and supporters who don’t adhere to strict political party lines. While Republican Governor Glenn Youngkin and Alexandria’s Democratic…
A 29-year-old Washington, D.C. man was arrested last month for allegedly stealing a $1,300 necklace from the First Cash Pawn shop in Alexandria’s West End and then trying to resell…
Anyone heading out this afternoon should remember to bring an umbrella: storms are likely inbound to Alexandria. The National Weather Service (NWS) said rain is likely this afternoon, mainly after…
Are you looking to work on health and fitness from the comfort of your own home?
Skip the big box gym and try out our in-home personal training service. We bring the gym to you so that you can save time and avoid the hassle of going the the crowded gym.
We bring all the equipment you need for a solid workout and if you have a community gym we can use that too.
We offer programs that will help with weight loss, strength, flexibility, more energy and overall feeling better.
Peace in Gaza: Prayer Liturgy and Community Discussion for Peace in Arlington VA, Sunday, Feb. 11, 10:15 AM
Prayer, liturgy, and community discussion for peace in Gaza, an immediate cease fire and resumption of humanitarian aid will be hosted by Nova Catholic Community. The focus will be Pope Francis’ call for an immediate ceasefire, the release of all hostages, resumption of humanitarian aid for Palestinians in Gaza, and peace talks for a lasting and just peace for all people in the region.
Discussion will follow at Noon on US military role in the conflict and appropriate steps the US should take to foster peace and rebuilding. Light lunch served.