Australia has taxed cigarettes so much that a thriving black market has started that nobody seems interested in policing.
Alcohol appears to be going in the same direction.
Alcohol appears to be going in the same direction.
Honestly, I dislike smoking as much as anyone else but I frankly oppose the way Australia is taxing cigarettes and alcohol. These are sin taxes. They are high to deter people from doing things they want to do. That's overreach.
Taxes should aim to cover externalities. That's fair. Your choice forces a burden on the collectivity which it's trying to recoup. Above that, that's just coercion and paternalism. Plus it disproportionally affects the poor but I guess the moral police pushing for this kind of taxes sees that as a benefit.
Even if you have the most addictive substance on the planet, the black market puts an upper bound on how much you can tax it.
The taxation level that maximizes revenue or minimizes harmful noncompliance never satisfies the moralizing people who wanted the thing you're discussing (whatever it is) punitively taxed in the first place.