Taxation And The Laffer Curve

This has been on my stack for some time.  I came across a story after reading a post by Dan Mitchell of CATO:

CIGARETTE-smuggling continues to soar in Ireland, with new Department of Finance figures showing that tobacco excise tax receipts are falling dramatically short of targets, even though taxes have increased and the number of people smoking has remained constant at 29 per cent of the population.

I especially enjoyed the assumed fact that economic gain made by the voluntary trade in an open a free market somehow first belongs to the government:

What Fianna Fail TD Niall Collins called “Premiership-style criminality” is behind the latest upsurge in smuggling, which is costing the state hundreds of millions in lost revenue.

Not one pause at the idea that the profits realized by selling tobacco from those who have it to those that want it should first be the property of the sellers.


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