An old and bad idea
BRAD Polumbo of the libertarian Foundation for Economic Education says a new report shows why the proposed large increase in federal taxes on cigarette and nicotine products “is such a terrible idea.” Don’t be surprised, he adds, when criminal enterprises see the biggest benefits.
Authored by the nonpartisan Tax Foundation, the report “analyzes past cigarette tax increases and shows how they helped fuel the black market. Using data from the Mackinac Center for Public Policy, Tax Foundation expert Ulrik Boesen shows that as these taxes increase, so too do illegal smuggling and black market activity.”
Where black markets exist, Polumbo says, there is usually criminal activity — and no accountability or quality standards.
Moreover, with “smoking increasingly unpopular as health risks are more commonly known, smokers — despite being disproportionately low-income — have become an easy target for punitive tax hikes.”
In other words, this is a tax hike that may not result in additional revenue, but may create new or bigger problems while imposing a new financial burden on low-income individuals.
Yes we are for public policies that can 1) help smokers quit their unhealthy habit, and 2) educate the youth about the perils of tobacco consumption and nicotine addiction. And yes we are also in favor of providing additional CNMI government funding to CHCC, an autonomous public corporation (one of whose goals, according to the law/press release that created it, is “increased financial sufficiency”). But raising tobacco taxes is unlikely to be of any good to anyone (who is not a criminal).
“The crafting of tax policy can never be divorced from an understanding of the law of unintended consequences, but it is too often disregarded or misunderstood in political debate,” says Tax Foundation expert Ulrik Boesen. “Sometimes policies, however well-intentioned, have unintended consequences that outweigh their benefits.”
We’ve been warned.
‘Nothing new’ in 2022
WELL, of course it’s a new year, and there will be a new calendar, newly elected or re-elected officials, and new, including unexpected, “developments” occurring in the next 365 days. But the basic issues facing the CNMI will be more or less the same even though not many elected officials want to talk about these unexciting topics.
This week, for example, we learned that the central government was not remitting the Public School System’s quarterly allotments “in a timely manner.” Nothing new about that. As the Department of Finance has repeatedly explained in the past, the allotments depend on actual local revenue collections.
It seems, however, that many of us, including elected officials, believe that words on paper with the appropriate signatures, etc., will enable us to achieve our desired goals. (See the anti-littering/dumping rules and laws since the Trust Territory era.)
But policy/law-making is not a magic wand. And so, again, we have to remind ourselves that the government budget is a set of financial projections: that is, assumptions, expectations, wishes. And these could be rendered irrelevant if not worthless by unforeseen events.
So many problems were caused or compounded by well-intentioned government directives, mandates, programs or laws, several of which could not be enforced, are not being enforced, or have failed to achieve their lofty goals.
Yet many of us still believe that these same problems can be solved with more well-intentioned government directives, mandates, programs or laws.
Nothing new about that either.
