It isn't a comment on trade, it is a comment on the decision to stop money from coming into their country. It would be like the state of Florida, which has no state income tax because tourism brings in so much money, telling tourists they can't use amusement parks or beaches. Or Las Vegas telling tourists they can't gamble.
Except I think it's fair to say both those states were targeting tourism when the trend towards theme parks and casinos began. The Netherlands weren't.
What does that have to do with smuggling? It could explain why they feel the need to tax it so high, but then that backs up my point about it being a defacto prohibition, in fact I would say that it is evidence that making it cost prohibitive is the goal.
I think in a state funded health system it's worth noting the "break even" point for a sin tax.
And I agree that current taxation is defacto prohibition on the surface. But in fact, the British government just enjoys taxing things that
are luxuries, but you'd struggle to go without once you had one (the other being motoring). In a recession a luxury like a tobacco is also an easy target, and the 2011 government budget reflects this.
77 percent!!!
THAT is why you have smuggling and black markets.
Now, look at what an area with no smuggling and black markets is doing differently:
http://revenue.ky.gov/business/tobaccotax.htm
$0.60 a pack. That is roughly 17% of a pack of Marlboros (~$3.50 a pack). Short of some Cuban cigars I am unaware of any black market tobacco in this state.
Using very, very simple maths the base line would have to be about 35% for smokers to break even on their imposed health costs to the NHS. But still a massive cut in current prices.
Do you still think alcohol and tobacco smuggling and black markets in your country is simply because it is a drug, or because your government is trying to price it out of the market? Too much government involvement leads to the crime around products, not the products themselves.
Government tax entirely. "Booze Cruises" to France where many cases of Wine and crates of beer, and large quantities of cigarettes can be bought without Tax due to EU law are common.
The government even sought to impose a base cost-per-unit-alcohol on alcoholic beverages, but it was laughed out as everyone agreed that even in a recession people would still buy it and it would simply be a tax measure with none of the proposed health benefit.
And I think this is a perfect example of what some of us have been saying about drugs being legalized. Legalizing drugs doesn't spread crime. Making drugs illegal causes crime to form around them. It was true of alcohol in the US prohibition, it is true of alcohol and tobacco in certain areas today, it is true of gambling, so on and so forth. Every time anyone suggests legalizing something there is all kinds of "BUT THE CRIME!" nonsense.
I would gladly see Cannabis legalized in the UK. I have seen upwards of a £2,000,000 of cannabis plants confiscated within just 2 miles of my house and 3 different locations by 3 different "gangs".
The things my community could do with even £200,000 would be immense for reducing crime.
I also have a medical student friend who has never taken drugs or smoked, but would publicly defend the legalisation of standardised Ecstasy if it wouldn't destroy his future career.
FORTY-NINE PERCENT. Wow. That is absolutely stunning.
Care to guess why half the market is illegal product? They're too expensive. Why are they too expensive? Because...
I don't have much of a clue. Rolling your own cigarettes is cheaper than buying packs pre-made. However, youths and tramps seem to be the majority of people I see doing it. Perhaps they care more about the price than where it came from?
They're clearly trying to shut down the industry, but to what benefit? At the moment I'm having trouble wrapping my head around why governments do this. Who votes for this stuff? You'd think at least they would want to industry alive and strong so they can tax it reasonably. That's the type of conniving logic I would expect from the government.
Because the government loves the tax revenue, a stigma towards smokers is ever growing but also as these work together to reduce the number of smokers the government seeks to maintain the revenue by increasing taxation on the decreased numbers.