Rating: 
Viewed: 202 times.
Print
There is a basic rule in microeconomics called the elasticity of price. As the price increases, demand will decrease. So it comes as no surprise to a sane human being not suffering from craniorectal inversion that increasing the tax on cigarettes by $1 a pack would cause a decrease in sales.
The Baltimore Business Journal covers this man-bites-dog story here, featuring Maryland Line's own "Fill Er Up" convenience store, hippie joint and gas station.
Of course, the incredible irony here is that increased cigarette taxes were part of the plan to cover more uninsured Marylanders -- especially the children. Now, because of declining sales, that money will not be available.
Whoops.
But that is not the worst part. A lot of those stores -- primarily convenience stores -- depend up on cigarette and tobacco sales to drive sales of other higher-margin products like soda, milk, snacks, etc. Guess what? If people aren't coming in for their Marlboros, they also aren't coming in for the other stuff. That means the state takes two other big hits.
Sales tax and corporate tax.
You think that $300 million decline in tax revenue over 16 months was big, wait until the trickle down effect of the cigarette tax works its magic.
Doesn't anyone in Annapolis study economics anymore? You can't get blood from a stone, even a Blarney Stone.
But fear not. I will continue to smoke my cigars -- the only item I still purchase in Maryland -- for the children.