The Finch Formerly Known As Gold

15 November 2005

The reality check comes due

The state has been grumbling that the newly-increased tobacco tax wasn't bringing in as much money as they'd planned: what with people quitting the habit, sales are down about 16 percent overall, and tribal smoke shops, which don't have to fork over anywhere near the full $1.03 per pack, are garnering a much larger share of the market than anticipated.

This, of course, is the Law of Unintended Consequences in action, though it could have been predicted by anyone who got through the first semester of Econ 101. Now Ron Cross, owner of Indian Nation Wholesale Company and a member of the state's advisory committee, is proposing that the entire system be scrapped.

It won't happen, of course. And Sooner Politics' Keith Gaddie notes:

The decision of some cigarette smokers to cut back or quit as a consequence of the new tobacco taxes — an admirable public health consequence — nonetheless indicates that in our poor state, there is a very delicate revenue tipping point for the consumption of sin. High gas, high cigarettes, and lottery tickets: At the end of the day, where do working poor consumers place their moneys? And what are the consequences for Oklahoma?

The phrase "muddling along" comes immediately to mind.

Posted at 7:52 AM to Soonerland


...tribal smoke shops, which don't have to fork over anywhere near the full $1.03 per pack, are garnering a much larger share of the market than anticipated.

Anticipated by whom? By idiots? I remember when the California Legislature was considering tax hikes, one idiot legislator was asked whether increasing the already epicly-proportioned California tax burden wouldn't drive businessesout of the state. His reply (paraphrased from memory): they'll never leave their economic paradise.

California was the first, thereafter, to begin suffering from what became a nationwide recession, and the last to come out of it. And some argued at the time that California's late recovery was causing everyone else's recovery to be more anemic than it ought to have been.

This, of course, is the Law of Unintended Consequences in action, though it could have been predicted by anyone who got through the first semester of Econ 101.

Yep.

Posted by: McGehee at 10:11 AM on 15 November 2005

I remember when the California Legislature was considering tax hikes...

Er, well, it was one time in particular, while I still existed there (don't even try to call it "living").

Posted by: McGehee at 10:12 AM on 15 November 2005