About one of every three packs of cigarettes sold in Wisconsin are either counterfeit or are not taxed properly, according to the Tax Foundation. The groups says the Badger State is the nation’s fifth-largest importer of smuggled cigarettes.
A new report from the group says 34.6 percent of Wisconsin’s cigarettes were not taxed, were taxed improperly, or were counterfeit. New York is the highest, followed by Arizona, New Mexico, and Washington state.
Joseph Henchman of the Tax Foundation blames the new smuggling on a big gap between low-tax and high-tax states. Three of every five states have raised their cigarette taxes to discourage smoking. Wisconsin increased its cigarette tax from $0.77 a pack to $2.52 between 2007 and 2009, while many neighboring states have seen slower increases. Illinois’ cigarette tax is currently $1.98, outside of the Chicago area.
Henchman says those policies often have “unintended consequences that outweigh their benefits,” such as encouraging counterfeit tax stamps, fake versions of legitimate cigarette brands, trucks that are hijacked, and officials who look the other way.