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| | | | Cigarette and Tobacco News:Border Zone Cigarette Taxation: Arkansas's Novel Solution to the Border Shopping ProblemFiscal Fact No. 168 Read complete article: Tax Foundation, 2009-04-09 Author: Mark Robyn
Summary: On February 12, the Arkansas General Assembly passed legislation to increase the state's excise rates on all tobacco products. As required by the bill, on March 1 the cigarette tax went from 59 cents to $1.15 per twenty-pack.1 But the same tax rate will not be enforced statewide. In a novel provision, the legislation, Act 180 of 2009, included a lower, variable rate for certain towns and stores located near the Arkansas border. . . .
Arkansas legislators are shrewdly acknowledging that cross-border shopping for low-tax cigarettes is a major problem for tax enforcement. To retain tax revenue and stop tax evasion, Arkansas has established a low-tax zone on its own side of the border. If this policy is successful in Arkansas other state legislatures may follow suit. To understand the rationale for this policy, the first of its kind among states, it is necessary to understand the problems that sometimes accompany cigarette taxation. . . .
It is important to note that this policy effectively shrinks the "tax border" of Arkansas. While there is still a minimum rate differential of three cents between Arkansas and any low-tax neighbor, this amount is small enough to provide almost no incentive for Arkansas residents to buy in other states. A significant tax differential does still exist however. The differential is now between different jurisdictions within the borders of Arkansas rather than between Arkansas and other states. . . .
Conclusion
Arkansas's border zone tax policy is a first in the world of cigarette excise taxation. This choice of policy is an acknowledgement of what many policy experts have been pointing out for a long time, that cigarette excise taxes are very susceptible to evasion through border shopping and other means, and that as tax differentials increase, these illegal activities become an increasing problem. Arkansas's policy may be successful enough that other states will consider similar policies in the future. While the policy will likely reduce border shopping and increase revenue to some degree, there are pros and cons that need to be weighed when states are considering whether to implement such a policy. The Arkansas experience will be instructive.
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| | | Connecticut State Trivia and Facts:In 1902 Dr. Luther Leonidas Hill performed the first open heart surgery in the Western Hemisphere by suturing a stab wound in a young boy's heart. The surgery occurred in Montgomery, Alabama. |
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| |  | | Tobacco History:
Cigarettes and Literature | The Social History of Smoking
George Latimer Apperson
Chapter 1:
Every one knows the legend of the water (or beer) thrown over Sir Walter by his servant when he first saw his master smoking, and imagined he was on fire. The story was first associated with Raleigh by a writer in 1708 in a magazine called the British Apollo. According to this yarn Sir Walter usually "indulged himself in Smoaking secretly, two pipes a Day; at which time, he order'd a Simple Fellow, who waited, to bring him up a Tankard of old Ale and Nutmeg, always laying aside the Pipe, when he heard his servant coming." On this particular occasion, however, the pipe was not laid aside in time, and the "Simple Fellow," imagining his master was on fire, as he saw the smoke issuing from his mouth, promptly put the fire out by sousing him with the contents of the tankard. One difficulty about this story is the alleged secrecy of Raleigh's indulgence in tobacco. There seems to be no imaginable reason why he should not have smoked openly. Later versions turn the ale into water and otherwise vary the story.
Read More | The Social History of SmokingGeorge Latimer AppersonChapter 6:The more fashionable folk of the Restoration Era and later began to leave off if not to disdain the smoking-habit. Up to about 1700 smoking had been permitted in the public rooms at Bath, but when Nash then took charge, tobacco was banished. Public or at least fashionable taste had begun to change, and Nash correctly interpreted and led it. Sorbière, who has been quoted in the previous chapter, remarked in 1663 that "People of Quality" did not use tobacco so much as others; and towards the end of the century and in Queen Anne's time the tendency was for tobacco to go out of fashion. This did not much affect its general use; but the tendency—with exceptions, no doubt—was to restrict the use of tobacco to the clergy, to country squires, to merchants and tradesmen and to the humbler ranks of society—to limit it, in short, to the middle and lower classes of the social commonwealth as then organized. In the extraordinary record of inanity which Addison printed as the diary of a citizen in the Spectator of March 4, 1712, the devotion of the worthy retired tradesman to tobacco is emphasized. This is the kind of thing: "Monday ... Hours 10, 11 and 12 Smoaked three Pipes of Virginia ... one o'clock in the afternoon, chid Ralph for mislaying my Tobacco-Box.... Wednesday ... From One to Two Smoaked a Pipe and a half.... Friday ... From Four to Six. Went to the Coffee-house. Met Mr. Nisby there. Smoaked several Pipes."
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