tag:blogger.com,1999:blog-20142791.post5506206420772393164..comments2024-03-11T07:41:19.149-04:00Comments on The Perfect Substitute: Illegal Substance TaxesUnknownnoreply@blogger.comBlogger3125tag:blogger.com,1999:blog-20142791.post-64050147345665403642012-09-14T08:02:32.686-04:002012-09-14T08:02:32.686-04:00Well, I do not really suppose this may work.Well, I do not really suppose this may work.Prudencehttp://www.wgjh.phc.edu.tw/lesson/user/view.php?id=17747noreply@blogger.comtag:blogger.com,1999:blog-20142791.post-66945260052675908402009-11-06T15:12:03.270-05:002009-11-06T15:12:03.270-05:00That's a good question, in this case it might ...That's a good question, in this case it might matter if the tax is on producers rather than consumers for purpose of deadweight loss. It's not clear to me how it is distinguished by law. <br /><br />It seems North Carolina had a state supreme court case that ruled that, functionally, the cocaine tax was a criminal fee and was therefore reduced. My guess is that for legal reasons they distinguish between taxes and criminal fees, but I don't know the consequences of this distinction.Justin M Rosshttps://www.blogger.com/profile/06990658017459237627noreply@blogger.comtag:blogger.com,1999:blog-20142791.post-15666581361580992012009-11-06T13:23:37.610-05:002009-11-06T13:23:37.610-05:00Wow, this is interesting.
I had no idea about thi...Wow, this is interesting.<br /><br />I had no idea about this; do you think most residents do? If residents DON'T know about the tax, they don't adjust their behavior to avoid the tax. In that sense, there's no Laffer Curve-- it would be linear, at least ex ante to the first crime. They would (presumably) adjust after being caught...then it would be back to the same story.<br /><br />If revenue maximization is the goal here, there's a tradeoff between severity of punishment (i.e., jail) and tax cost. Jail time could be minimized and tax rates increased to maximize revenue. If there were enough experimentation you could isolate the cost of avoiding a year in prison.<br /><br />These are taxes as separate from fines, yes?Matt E. Ryanhttps://www.blogger.com/profile/00290146649328322694noreply@blogger.com