According to a recent op-ed by Marc Kilmer of the Maryland Public Policy Institute, a 2007 cigarette tax is having an adverse effect on the Free State’s economy. While public health advocates have lauded the move as an effective way to deter smoking, Maryland smokers simply starting buying their cigarettes in neighboring states that have a lower tax rate, including Pennsylvania.
Looking at neighboring states’ cigarette sales, it seems that at least part of the drop-off in Maryland cigarette sales is due to Marylanders buying cigarettes in those states. Pennsylvania, for instance, had been seeing a steady decline in cigarette sales since 2002. In 2008, though, as Maryland cigarette sales were falling, Pennsylvania sales increased by more than 7 million packs. Cigarette sales in the District of Columbia and West Virginia also increased from 2007 to 2008.
Check out Budget Facts 2009: Cigarette Taxes for more.