Michael LaFaive

Director, Morey Fiscal Policy Initiative, Mackinac Center for Public Policy

[Michael LaFaive @lafaive]

Todd Nesbit and I built a statistical model to track cigarette smuggling. It tells us that if Delaware hikes its cigarette tax from $2.10 to $3.60 the state will go from a source of smuggled smoke to an importer of it, and equal to 18% of the state’s total cigarette consumption.

[Michael LaFaive @lafaive]

https://t.co/WLi4szeuup

[John Mozena @johnmoz]

Michigan handed out more corporate subsidies than virtually any other state in recent years while its population stagnated and it lost more manufacturing jobs than anywhere but New York or California. If that's "effectiveness" then I'd hate to see what "ineffective" looks like.

[Michael LaFaive @lafaive]

For more on our state smuggling estimates, see: https://t.co/TyZ8FIeHYm

[Michael LaFaive @lafaive]

If the ban on flavored smoke in Washington state is adopted too smuggling will be worse. Legal sales will fall precipitously and lead to a net decline in cigarette excise tax revenue of $98 million (on the low end), according to our statistical model.

[Michael LaFaive @lafaive]

If the $2 cig tax increase proposed in HB 5803 we anticipate the Washington state smuggling rate will jump to 58.8% of total state consumption and displace New York as the state with the highest inbound cigarette smuggling rate in the nation.

[Michael LaFaive @lafaive]

My economist colleague, Todd Nesbit, and I estimate each year the degree to which cigarettes are smuggled among states. In 2022 WA's cigarette smuggling rate was 36.8%, ranking the state 5th highest for inbound cigarette smuggling.

[Michael J. Reitz @MichaelJReitz]

The Overton Window explains everything from taxes to drunk driving laws to hardcore music. @DetNewsOpinion
https://t.co/LK5hXwlYb1

[Michael LaFaive @lafaive]

Hi @GregForMontana. I am a cigarette tax avoidance and evasion (smuggling) expert. My estimation is a $1 hike in HB 826 will raise Montana's cig smuggling rate to 33% of MT consumption, up from 21%. Your neighboring states will supply the bulk of the illicit traffic.

[Michael LaFaive @lafaive]

States continue to recommend cigarette tax increases. Nebraska is latest. We @MackinacCenter estimate 72-cent cig tax hike this will turn the state from net exporter to net importer, with a tax evasion and avoidance (smuggling rate) of 10.4% of consumption.

[Michael LaFaive @lafaive]

"Corporate Welfare in the Federal Budget" | New study by the Cato Institute. This is a valuable new study to give you an idea of just how much in the way of federal dollars are wasted underwriting corporations and industry. Thanks @CatoEdwards.

[Michael LaFaive @lafaive]

(3/3) Hi, @GovJanetMills. Testimony I submitted Mar 3. regarding the proposed cig tax increase of $1 in Maine. It would double smuggling. An Act to Establish a University of Maine Medical School and to Dedicate Funds from Raising the Cigarette Tax to the School – Mackinac Center

[Michael LaFaive @lafaive]

(2/x) Hi @GovJanetMills. I also noted in my testimony that the $1 additional tax being proposed on cigarettes per pack (if adopted) would result in another 2.6 million packs being brought in from low-tax states like North Carolina. See my full testimony in my next post.

[Michael LaFaive @lafaive]

(1/x) Hi @GovJanetMills. I just submitted testimony yesterday predicting that if the cigarette excise tax goes up by $1, Mainers will smuggle nearly 1.5 million more packs in from New Hampshire.

[Michael LaFaive @lafaive]

Another company picked by the Michigan Economic Development Corporation as a winner turns out to be a loser in the Michigan marketplace: https://t.co/wHb5npitda

[Michael LaFaive @lafaive]

(1/2) Hi, @IN_gov At current cigarette tax rates in IN (99.5 cents) 24 cigarette packs are smuggled out to other states for every 100 consumed in the Hoosier state. If the $2 per pack tax increase proposal is adopted nearly 18% of total consumption will be smuggled into IN.

[Michael LaFaive @lafaive]

(1/x) Hi, @IN_gov . A proposal being discussed in Indiana would hike cigarette taxes by $2 per pack, a 200+% increase. The @MackinacCenter estimates that, if adopted, Indiana would go from being a net seller of cigarettes smuggled elsewhere to a net importer.

[Michael LaFaive @lafaive]

(2/2) @MackinacCenter scholars estimate that a proposed cigarette tax hike in North Dakota of $1.09 per pack, if adopted, would flip the state's status as a net exporter of cigarettes to a net importer. Nearly 3% of total consumption would be smuggled in.

[Michael LaFaive @lafaive]

(1/2) @MackinacCenter scholars in 2008 created a statistical model to measure degree to which cigarettes are smuggled state to state. In 2022 the model reported North Dakota was a net exporter of cigarettes equal to 13.8% of total cigarette consumption in the state.

[Michael LaFaive @lafaive]

Hi, @GovWhitmer. I couldn't help but notice your plan to tax vape and related products. Please be aware of the illegal market surrounding these items. Also consider that some view the use of vapes as a harm reduction strategy for folks who wish to quit combustible cigarettes.