Cigarette Tax Money Goes Up in Smoke
Chicago residents forced to buy cigarettes elsewhere
By NICOLA ORICHUIA
Updated 12:15 PM CST, Sat, Nov 14, 2009
Fewer cigarettes sold doesn’t necessarily mean less smokers, but it does mean less revenue in local, state and federal taxes.
Cigarette sales in Chicago have seen a huge decrease over the past several years, leading to a decrease in tax revenue.
Since 2001, tax revenue from cigarette sales has decreased by almost 68 percent, Chicago Department of Revenue spokesman Ed Walsh told ChicagoTalks in an email statement.
A major blow to cigarette sales in the city was given in spring, when an almost 62-cents-a-pack federal tax increase was issued. Now a pack of cigarettes in Chicago includes 98 cents of taxes to the state of Illinois, $1.01 to the federal government, 68 cents to the City of Chicago and $2 to Cook County.
That’s $4.67 in taxes.
But instead of quitting, many smokers are buying their cigarettes elsewhere or relying on illegal sales by peddlers on street corners.
“The proximity of Chicago to other cities could lead to an increase in smuggling in Chicago if taxes are raised,” Michael LaFaive, executive director of the Mackinac Center for Public Policy, told ChicagoTalks.
The city has also seen an increase in tax law violations by local businesses.
Efrat Stein, spokeswoman for Chicago’s Department of Business Affairs and Consumer Protection, told ChicagoTalks 289 businesses had been cited for violating the tobacco tax law since 2006.
With 65 business inspectors, the city has produced $600,000 in revenue from fines in just the last two years, Stein said.
First Published: Nov 14, 2009 11:37 AM CST
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