A new tax hike on wholesale e-cig purchases has happened in Alaska’s Matanuska-Susitna Borough, according to News.Heartland.org. The new excise tax will be 55 percent to the price of the wholesale purchase.
While revenue is said to be going to the borough government’s general fund, Michael LaFaive, director of the Morey Fiscal Policy Initiative at the Mackinac Center for Public Policy, told the news site that the tax hike will backfire.
“We know that governments in the United States and around the world have raised excise taxes to such degree that one of the major unintended consequences is rampant smuggling that undermines the health goals that have been cited as the reason to impose those taxes in the first place,”LaFaive told the news site. “With flammable tobacco, the tax rates have gotten so high that it’s been estimated recently by scholars that it would take a 100 percent increase in current excise taxes to get just a 5 percent improvement in the quit rate.” He also said the direction is an “illegal market.”
For the full story, visit http://news.heartland.org/newspaper-article/2015/11/02/new-e-cig-tax-burns-alaskans.