Illinois Legislature: Let’s Help Indiana’s Economy With Our Cigarette Tax!

Published August 20, 2007

An increase in tobacco taxes will be great, for other states (“Cigarette tax hike may disappoint,” July 30). If the Illinois Legislature has its way, total state and local cigarette taxes in Illinois will rise to $1.83 per pack. That’s far above the numbers in nearby states: 55.5 cents in Indiana, 30 in Kentucky, 17 in Missouri, 77 in Wisconsin, and zero cents a pack over the Internet.

More smokers will drive across state lines–and also fill up on motor fuel there. Various state and local fuel taxes add up to 61.4 cents per gallon on a $3 wholesale price in Chicago. The numbers in neighboring states are much lower.

The beneficiaries will be merchants and government in nearby states, which would see an increase in sales and thus tax revenues while Illinois loses both.

Jim Johnston ([email protected]) is an economist retired from Amoco and a policy advisor to The Heartland Institute.