Well, since then, states have indeed spent their settlement money on non-health care initiatives and have become totally dependent on tobacco tax revenue. And now they're worried about the thriving black market of cigarettes; there may have been a tipping point reached in cigarette taxation, here.
Criminal gangs are smuggling cigarettes from lower-tax states to higher-tax states. It's gotten so bad that the ATF has developed a national strategy to combat the trafficking. It's a lucrative business, especially in states like New York. That's where yet another tax increase will push the price of a pack of legally purchased cigarettes to almost nine dollars. An Indian reservation 60 miles from New York City sells over ten million cartons a year to people trying to avoid these high prices.
But it isn't just Native Americans and domestic criminal gangs: smokers are turning to Internet sales operations, too. Tons of counterfeit cigarettes are now showing up from the ChiComs.
Now, all of this unfolded precisely as I predicted. See, the one thing the liberals can't get through their thick skulls is that people respond to confiscatory taxes by changing their behavior. This was the lesson of the American Revolution -- a war fueled by high taxes and lost liberties -- and it's going to be true forever. Trust me, folks. I mean, I'm not blowing smoke up your skirt: it actually happens the way I tell you!
Read the Background Material on the Morning Update...
• AP: Higher Cig Taxes Could Promote Smuggling