Minnesota’s 183% Cigarette Tax Hike Goes Into Effect Today

Minnesota has a big, fact tax hike on cigarettes which goes into effect today. It’s a $1.60/pack increase, putting the total tax at $2.83/pack.

Minnesota now has the 6th highest tax on cigarettes in the nation (New York is the highest at $4.35), which is part of the state’s record-setting tax hikes.

The intent of the law is social engineering. Lawmakers in Minnesota want to encourage people to stop smoking by raising the price of smoking. Ironically, though, lawmakers are also counting on the tax hike to shore up the state budget.

“It’s part of a state budget fix, but has also hailed by public health experts as a way to discourage smoking,” reports KARE11.

Counting on revenue from a tax on a product you also hope the tax will encourage people to stop using seems like a self-defeating proposition. If “public health experts” are right and people stop smoking, revenue from cigarette sales will decline. If people don’t stop smoking, then the tax isn’t very good public health policy, is it?

These are the problems we create when the government attempts to manipulate our behavior through the tax code.

In related news, starting a smoke shop on the North Dakota/Minnesota border is looking like a pretty good investment right now. As we’ve seen with other states that have hiked taxes on cigarettes, it inspires a lot of cross-border tobacco sales (not to mention black markets to avoid the taxes altogether).

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • mikemc1970

    It sounds like a great place for a contraband cigarette operation. Thanks comes from the bottom of the Mexican drug cartels heart, out to big nanny state governments everywhere.

    • ec99

      Under Chrétien, Canada raised its cigarette tax through the roof. Then discovered it was spending more than the revenues on trying to control black market operations.

  • devilschild

    “As part of the tax conversion, retailers must take inventory on packs already in stores. By mid-July they must report their counts to the state and pay a one-time floor stock fee by early September. Floor tax proceeds have been earmarked to pay debt on the new Minnesota Viking’s stadium.”
    *MPR News

    • ec99

      Minnesota should change its motto to “Land of 10,000 Stadiums.”

      • schreib

        No, the “Land of 10,000 taxes are more appropriate. This tax will only put many retailers out of business. They follow in the footsteps of Odumbo

  • http://Sayanythingblog.com The Whistler

    I’m thinking that the various Indian tribes around the state would do well to set up large smoke shops. They’d be smart to charge a higher rate to non tribal members.

    • http://sayanythingblog.com Rob

      The Wahpeton-Sisseton Sioux seem to be situated perfectly to take advantage.

      https://en.wikipedia.org/wiki/Lake_Traverse_Reservation

      • Rick Olson

        It’s not like the Minnesota Department of Revenue will have agents combing every corner and inch of the state, looking for illegally imported smokes. Like just about every state agency in Minnesota is today. Not enough money in the budget to be able to properly enforce the matters under their jurisdiction, not enough manpower to actively enforce the matters under their jurisdiction, not enough hours in the day, etc. It would seem the only time that anyone will see an active enforcement effort undertaken would be in a case or cases where the scofflaws are so flagrant and obvious that the state would have to act.

    • Matthew Mack

      You’d be absolutely amazed to see how stupidly the Mdewkanton Sioux are handling this tax hike. They were 10% higher before, and they’re 15% higher now. They went from $6 a pack to $8.58 at Mystic, purely pretending they’re affected by the hike, when they’re just gouging.

  • matthew_bosch

    Since when is raising the price on addicts a deterrent? Isn’t that what good drug dealers do?

  • schreib

    Every time a state raises cigarette taxes to such a high level, their revenues go down and the black market takes over. Minnesota has a number of Indian reservations as well. This is nothing but prohibition through taxation. And we know how prohibitions works, don’t we?

  • schreib

    Dayton and the looney left Minnesota legislature are all idiots.

  • Sun Recruiting, Inc.

    Raising taxes on cigarettes is essentially a tax on the poor because more poor people smoke than do wealthy people and because cigarettes are addictive, smokers will pay, no matter how high the price gets.

  • schreib

    The states of Iowa, Wisconsin, North and South Dakota all want to thank the useful idiots in Minnesota.

  • schreib

    Piss off a liberal, Grow and roll your own

  • Kelvar62

    I’m going to smoke in that new stadium regardless of a fine :)

    • http://sayanythingblog.com Rob

      good luck!

  • Maus

    Oh, look! All the poor people (70+% of whom smoke) just stopped smoking. Now, they’re buying their kids books, feeding them green, leafy vegetables and looking to buy a Hybrid.

    The Nanny State is such a huge, screaming success!

    • http://sayanythingblog.com Rob

      Yeah, they don’t seem to notice the disconnect between the outcomes they predict for their policies and the outcomes that actually happen.

  • John_Wayne_American

    Just bought lunch at the gas station down the street, the guy in front of me bought 2 cartons of Marboros and 8 packs of Camels, he doesnt smoke, but he was heading back to the lakes in MN and his buddys do so they had him stop. The clerk said their sales have over doubled her in Fargo.

  • John_Wayne_American

    Rob, put in an “early” request for ND tobacky tax sales numbers July 2012 vs July 2013,

    it should prove an interesting number.

  • http://www.youtube.com/Steamlite Best E Cigarette Store

    I think this rise of tax in cigarette will lead smokers to quit smoking. They will switch over to e cig which is healthiest option for smoking. Because of this rise smokers can live healthy life.

    • disqus_O8cGDd3MuX

      And still cross the border because E-cigs are taxed like traditional cigarettes in MN. Shame on MN!

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