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Tax on the border

Arkansas's solution to prevent smokers from jumping borders to buy cheaper smokes -- give preferential tax rates to border cities -- draws attention here.

This means residents in towns that do not border other states can (legally) purchase cigarettes at lower tax rates by traveling to border towns. Mark Robyn, a Tax Foundation analyst, argues that this will still probably result in a net tax revenue gain for Arkansas — since it will keep more cigarette purchases in-state — and a net revenue loss for adjacent states.

As far as I can tell, no other state has tried to stop border-shopping for cigarettes in quite the same way. Mr. Robyn notes, however, that Arkansas has put in place similarly clever laws in response to border-state income tax and border-state gas tax differentials.

The tax policy experts ought to take a look at other favors granted border cities in Arkansas, namely Texarkana. And take a look at what those advantages have done vis a vis development of sister cities across the border.

 

Comments

Illinois used to catch people flying back from North Cariolina with more than the allowed number iof cartons of cigarettes. American had a Raleigh-Chicago flight that stopped at Greensboro and passengers would load up before the trip onward.

in the same way, Missouri used to have revenue agents in the parking lots of alcohol outlets near Alton IL to record license numbers of Missouri cars and then pick them cak up after they crossed over the Alton bridge back into Missouri.

Passing stupid laws to raise revenue from people who can't afford them forces good citizens to become criminals after they have concealed weapons permits. Duh!!!


Agree BWC, let's print the names of those that voted against the tobacco tax.
But the best was Rep Ingram's bill titled -
"TO ALLOW A CITY THAT ADJOINS A BORDER CITY THAT IS SEPARATED BY A RIVER FROM A CITY IN ANOTHER STATE TO SELL CIGARETTES AT THE RATE USED BY THE BORDER CITY."
So now his city Marion is exempt. Huh and Ingram voted FOR the tax.

United is supposed to mean united. United States means every citizen should share the tax burdon, not certain groups of citizens just because they smoke. If this was an actual free country a person should be free to smoke without persecution.
http://www.youtube.com/results?search_type=&search_query=american+gestapo&aq=o
http://www.americangestapo.org/

This is great, let's expand on this novel method of keeping smokers from going across the border or buying their cigarettes off the internet. If giving preferential cigarette tax rates to border cities will result in a TAX REVENUE GAIN for AR why not give the same preferential rates to all cities in AR. Smokers would then buy their cigarettes throughout the entire state and tax revenues would really go up. The state might then be able to make up the $14M shortfall that is expected in cigarette tax collections due to lousy estimations from the governor and his staff. Additionally, this increase in revenue would free up the $14M in surplus funds the governor plans to use to shore up the cigarette tax shortfall. Maybe that $14M could then be put to use helping to finance ESSENTIAL GOVERNMENT FUNCTIONS, whatever those may be in this day and time.

I think there are going to be some interesting stories to tell before all is said and done on this cigarette tax. And yes.... you've just got to love Rep. Ingram who has certainly mastered the art of double talk, something that seems to be required of most elected officials.

It's OK, don't bother. I've lived in Fort Border since I was 6 and all this talk of free gifts to border towns is poppycock because if you lived here, you'd never feel this supposed savings. Buying stuff in Fort Baptist feels just like buying stuff in Conway. If you saved 14 cents today, you'll never know it. But it sure looks good in print.

Having spent all these years trying to avoid Eastern Oklahoma, I've enjoyed my trips across the border to buy cheaper cigarettes. I've found a new grocery store I like. My fear of these people have lessened, they're friendly and so far no one has asked me if I wanted to buy a builder or a burner. These are the 2 types of houses built in Easter Oklahoma. A builder is a house you build to live in. A burner is a house you build to burn down for insurance money. Who knows...maybe that era has passed?

But all in all I've enjoyed my trips 5 miles into Oklahoma a couple of times a week. I did a walk through the other day, but maybe soon I'll get the nerve to gamble at the Casino while on a cigarette run. All those machines with flashing lights and noises is pretty foreign to a recovering Baptist. But I see lots of cars with Arkansas tags and so if my neighbors can figure out how to do it, I can figure it out. I bet if I look a little harder, I can find some good food for cheap too. And it looks like car prices are a little cheaper over the border too.

So.....don't worry about this border town business. I'm enjoying my forays into Eastern Oklahoma, it's opened up a whole new world for me. Keep giving tax breaks to the oil & gas companies and go back to worrying about texting teenagers......I'm doing fine over here on the left side of the state.

I suspect there are a lot of smokers in AR who feel the same way DBI feels. Regardless of the preferential cigarette tax rates border cities are given, many smokers are so ticked off about having to bear the entire load of financing the state's trauma centers/system that as long as they are able they will continue to get their cigarette's by running the borders and purchasing from the internet as a form of protest. So I really question Mr. Robyn's argument that the preferential tax to border cities will calculate to a net revenue increase for AR. Additionally, if a smoker can drive to a border town for the purpose of buying cheaper cigarettes, why wouldn't they just drive a little bit further and go across the border in order to save a little bit more? Suppose we will find out in a year or so.

Now, that's not to say they won't return to AR if border states ever raise their cigarette taxes to a level that exceeds AR. Have fun DBI of your trips west of the border!

A little advice to smokers.

Hire a PR firm to help with y'all's image, then nonsmokers might join your causes.

A probably small percentage of smokers is killing your reputation.

Just walk down any street in Arkansas and look at all the cigarette butts on the roadside. Especially anywhere a car is slowed down like stop signs or traffic lights.

I guess it isn't considered littering if the litter is small, covered in spit, stinks, and is burning. I go weeks without seeing comuters blattantly throwing fast food bags or drink bottles out their window but it is rare the day I don't see someone litter with cig butts. Yesterday on Cantrell I saw THREE!

This indicates that smokers have no clue that everyone around them is disgusted when we see you litter.

Why do smokers toss their butts out car windows? Because butts are dirty, messy, and disgusting and they don't want them in their car. Why do you think nonsmokers like them all over their streets.

If you are a camper you will notice that butts are nearly as numerous as pea gravel at most state parks.

Don't thank me for the tip on improving your image, I consider it a good deed for the day.

Before I went to Missouri yesterday.. I stopped in half a dozen places in ES....all of which were sold out of loose tobacco.

America, selling out of tobacco and bullets... Bastille Day just gets closer and closer.

Better put a rush job on those trauma centers...it ain't going to be purty when poor folks get tired of ********** like a dog in heat.

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