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Date: April 30, 2024 Tue
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Results for taxes
8 results foundAuthor: Sweeting, Jeff Title: Anti-Contraband Policy Measures: Evidence for Better Practice Summary: Tobacco taxation has been used in many jurisdictions as a policy measure to discourage smoking. The effectiveness of taxation strategies can be undermined by widespread availability of tobacco products. This knowledge synthesis presents information on a wide-range of tobacco anti-contraband measures, in an effort to ascertain the relative effectiveness of various policy measures for addressing contraband in Canada and around the world. This report is based on a comprehensive literature search, a series of key informant interviews, and four Expert Focus Panels with participants from Canada, the United States and several European jurisdictions. This paper identifies and defines the different forms of contraband tobacco, including casual bootlegging, organized international smuggling, illicit manufacturing, tax-avoidance from duty-free sources, and counterfeit cigarettes. The effectiveness of ten anti-contraband policy measures are explored: licensing, tax-markings/stamping, tracking and tracing, record-keeping/control measures, enhanced enforcement, export taxation, tax harmonization, tax agreements/compacts, legally binding agreements with the tobacco industry and memoranda of understanding (MOUs), and public awareness campaigns. Analysis suggests that both type of contraband and means of distribution influence the effectiveness of different policies and the unintended consequences of action. For example, policy measures that were effective for legally manufactured, but cross-border smuggled cigarettes in the 1990s are less effective for illicitly manufactured and counterfeit cigarettes that dominate contraband activity today in many countries. Case studies of Brazil, Australia and Canada indicate that while contraband sources often emerge domestically, given the ease of transport and manufacture, sources can be easily displaced to neighboring or overseas jurisdictions. Inter-agency cooperation (both domestic and international) emerges as a vital component of all successful anti-contraband strategies. The dynamic nature of contraband supply requires a comprehensive approach that focuses on both immediate and future threats. Policies designed to ensure contraband tobacco products do not appear in the legitimate retail sector (such as tax-paid markings, licensing, record-keeping) and measures to ensure that counterfeit products are easily identified (such as enhanced taxation stamps) are vital resources. Adequate investment in enforcement is critical to the success of anti-contraband measures. Ontario Tobacco Research Unit 2 Given the global scope of the phenomenon, greater international cooperation and information sharing is paramount. Obstacles and potential solutions to implementing various anti-contraband measures are examined from the unique perspective of Canadian First Nations. Very little data exists on contraband tobacco and there is almost no evaluative research on the effectiveness of anti-contraband policy measures, making study of the problem extremely challenging. Details: Toronto, ON: Ontario Tobacco Research Unit, 2009. 141p. Source: Internet Resource: Special Report Series: Accessed February 13, 2012 at: http://www.otru.org/pdf/special/special_anti_contraband_measures.pdf Year: 2009 Country: International URL: http://www.otru.org/pdf/special/special_anti_contraband_measures.pdf Shelf Number: 124123 Keywords: Black MarketsContraband CigarettesContraband TobaccoIllegal TobaccoSmugglingTaxes |
Author: U.S. Government Accountability Office Title: Identity Theft: Additional Actions Could Help IRS Combat the Large, Evolving Threat of Refund Fraud Summary: Identity theft tax refund fraud is a persistent, evolving threat to honest taxpayers and tax administration. It occurs when an identity thief files a fraudulent tax return using a legitimate taxpayer's identifying information and claims a refund. GAO was asked to review IRS's efforts to combat IDT refund fraud. This report, the first of a series, examines (1) what IRS knows about the extent of IDT refund fraud and (2) additional actions IRS can take to combat IDT refund fraud using third-party information from, for example, employers and financial institutions. To understand what is known about the extent of IDT refund fraud, GAO reviewed IRS documentation, including the Identity Theft Taxonomy. To identify additional actions IRS can take, GAO assessed IRS and SSA data on the timing of W-2s; and interviewed SSA officials and selected associations representing software companies, return preparers, payroll companies, and others. What GAO Recommends GAO recommends that Congress should consider providing Treasury with authority to lower the annual threshold for e-filing W-2s. In addition, IRS should fully assess the costs and benefits of shifting W-2 deadlines, and provide this information to Congress. IRS neither agreed nor disagreed with GAO's recommendations, and it stated it is determining how these potential corrective actions align with available resources and IRS priorities. Details: Washington, GAO, 2014. 50p. Source: Internet Resource: GAO-14-633: Accessed September 25, 2014 at: http://www.gao.gov/assets/670/665368.pdf Year: 2014 Country: United States URL: http://www.gao.gov/assets/670/665368.pdf Shelf Number: 133415 Keywords: Financial CrimesFraudIdentity Theft (U.S.)Taxes |
Author: Henchman, Joseph Title: Cigarette Taxes and Cigarette Smuggling by State Summary: - Large differentials in cigarette taxes across states create incentives for black market sales. - Smuggled cigarettes make up substantial portions of cigarette consumption in many states, and greater than 25 percent of consumption in twelve states. - The highest inbound cigarette smuggling rates are in New York (56.9 percent), Arizona (51.5 percent), New Mexico (48.1 percent), Washington (48 percent), and Wisconsin (34.6 percent). - The highest outbound smuggling rates are in New Hampshire (24.2 percent), Wyoming (22.3 percent), Idaho (21.3 percent), Virginia (21.1 percent), and Delaware (20.9 percent). - Cigarette tax rates increased in 30 states and the District of Columbia between 2006 and 2012. Details: Washington, DC: Tax Foundation, 2014. 4p. Source: Internet Resource: Fiscal Fact: Accessed May 21, 2015 at: http://taxfoundation.org/sites/taxfoundation.org/files/docs/FF421.pdf Year: 2014 Country: United States URL: http://taxfoundation.org/sites/taxfoundation.org/files/docs/FF421.pdf Shelf Number: 135750 Keywords: Cigarette SmugglingIllicit GoodsTaxes |
Author: Drenkard, Scott Title: Cigarette Taxes and Cigarette Smuggling by State, 2013 Summary: Key Findings - Large differentials in cigarette taxes across states create incentives for black market sales. - Smuggled cigarettes make up substantial portions of cigarette consumption in many states, and greater than 20 percent of consumption in fifteen states. - The highest inbound cigarette smuggling rates are in New York (58.0 percent), Arizona (49.3 percent), Washington (46.4 percent), New Mexico (46.1 percent), and Rhode Island (32.0 percent). - The highest outbound smuggling rates are in New Hampshire (28.6 percent), Idaho (24.2 percent), Virginia (22.6 percent), Delaware (22.6 percent), and Wyoming (21.0 percent). - Smuggling rates jumped substantially in Illinois after hikes in state and county excise tax rates, from 1.1 percent of consumption in the last edition to 20.9 percent in this edition. - Cigarette tax rates increased in 30 states and the District of Columbia between 2006 and 2013. Public policies often have unintended consequences that outweigh their benefits. One consequence of high state cigarette tax rates has been increased smuggling as criminals procure discounted packs from low-tax states to sell in high-tax states. Growing cigarette tax differentials have made cigarette smuggling both a national problem and a lucrative criminal enterprise. Each year, scholars at the Mackinac Center for Public Policy, a Michigan think tank, use a statistical analysis of available data to estimate smuggling rates for each state.[1] Their most recent report uses 2013 data and finds that smuggling rates generally rise in states after they adopt large cigarette tax increases. Smuggling rates have dropped in some states, however, often where neighboring states have higher cigarette tax rates. Table 1 shows the data for each state, comparing 2013 and 2006 smuggling rates and tax changes. New York is the highest net importer of smuggled cigarettes, totaling 58.0 percent of the total cigarette market in the state. New York also has the highest state cigarette tax ($4.35 per pack), not counting the additional local New York City cigarette tax (an additional $1.50 per pack). Smuggling in New York has risen sharply since 2006 (+62 percent), as has the tax rate (+190 percent). Smuggling in Illinois has also increased dramatically, from 1.1 percent to 20.9 percent since the last data release. This is likely related to the fact that the Illinois state cigarette tax rate was hiked from $0.98 to $1.98 in mid-2012. This increase in smuggling may continue in future data editions, as more recent increases in both the Cook County rate (from $2.00 to $3.00 per pack, effective March 1, 2013) and the Chicago municipal rate (from $0.68 to $1.18, effective January 10, 2014) have brought the combined state-county-municipal rate to $6.16 per pack of cigarettes, the highest combined rate in the country.[2] Other peer-reviewed studies provide support for these findings.[3] Recently, a study in Tobacco Control examined littered packs of cigarettes in five northeast cities, finding that 58.7 percent of packs did not have proper local stamps. The authors estimated 30.5 to 42.1 percent of packs were trafficked.[4] Smuggling takes many forms: counterfeit state tax stamps, counterfeit versions of legitimate brands, hijacked trucks, or officials turning a blind eye.[5] The study's authors, LaFaive and Nesbit, cite examples of a Maryland police officer running illicit cigarettes while on duty, a Virginia man hiring a contract killer over a cigarette smuggling dispute, and prison guards caught smuggling cigarettes into prisons. Policy responses have included banning common carrier delivery of cigarettes,[6] greater law enforcement activity on interstate roads,[7] differential tax rates near low-tax jurisdictions,[8] and cracking down on tribal reservations that sell tax-free cigarettes.[9] However, the underlying problem remains: high cigarette taxes that amount to a "price prohibition" of the product in many U.S. states.[10] Details: Washington, DC: Tax Foundation, 2015. 5p. Source: Internet Resource: Fiscal Fact, No. 450: Accessed July 15, 2015 at: http://taxfoundation.org/sites/taxfoundation.org/files/docs/TaxFoundation_FF450.pdf Year: 2015 Country: United States URL: http://taxfoundation.org/sites/taxfoundation.org/files/docs/TaxFoundation_FF450.pdf Shelf Number: 136058 Keywords: Cigarette SmugglingEconomics and CrimeTaxes |
Author: Zhang, Bo Title: What Effect Does Tobacco Taxation Have on Contraband? Debunking the Taxation - Contraband Tobacco Myth Summary: Research demonstrates that many factors are associated with contraband tobacco use, including: easy access, misconceptions about "legal" purchase of cigarettes from First Nations' Reserves, insufficient enforcement and penalties, and organized criminal activity. It is frequently claimed that tobacco taxes cause smuggling. For example, a 2010 Fraser Institute Report, Contraband Tobacco in Canada: Tax Policies and Black Market Incentives, concludes that "Our research identifies federal and provincial tobacco excise taxes as a primary precipitating factor in the growth of this black market" (i.e., contraband cigarettes market). Does increasing tobacco tax necessarily increase contraband? To debunk the taxation and contraband tobacco myth we provide evidence from the literature, present Ontario trend data on tobacco taxes, consumption, prevalence and contraband, compare tax and price data in Canada, and critically review the Fraser Institute Report. Key Findings: - Evidence from many countries shows that tobacco tax increases will reduce tobacco use and increase tobacco revenues, even when there is some small amount of accompanied contraband tobacco use. Many of the small proportion of smokers who might move to contraband tobacco return to legal tobacco within a short period of time. - Accompanying increased tobacco taxes with anti-contraband measures are effective in keeping leakage to contraband tobacco. - Self-reported data on purchase of contraband cigarettes based on large population-based surveys show a significant decline between 2008 and 2012 in Ontario - a period during which tobacco taxes increased moderately. - The province of Quebec has successfully decreased contraband tobacco use substantially while maintaining and now raising tobacco taxes. - The Royal Canadian Mounted Police seizure data of contraband cigarettes also show a significant decline between 2008 and 2012 in Canada. - Many factors are associated with contraband tobacco use, including: easy access, misconceptions about "legal" purchase of cigarettes from First Nations' Reserves, insufficient enforcement and penalties, and organized criminal activity. Cigarette smoking prevalence and consumption has been declining since 2007 in Ontario, while tobacco taxes and tobacco tax revenue have been relatively stable during the same period, further supporting a decreasing trend in contraband tobacco use in Ontario. - Ontario and Quebec have the lowest tobacco taxes among all provinces in Canada, yet the number of consumers of contraband tobacco is the largest in these two provinces. - The Fraser Institute Report's conclusion is not supported by the evidence cited in the report and missed substantial evidence from the literature. Our conclusion is that the benefits of increased tobacco taxes outweigh any minor increase in contraband use that might occur. Tax increases are best accompanied by more stringent anti-contraband measures. Details: Toronto: Ontario Tobacco Research Unit, 2015. 32p. Source: Internet Resource: Accessed September 21, 2016 at: http://otru.org/wp-content/uploads/2015/02/special_tax_contraband_final.pdf Year: 2015 Country: Canada URL: http://otru.org/wp-content/uploads/2015/02/special_tax_contraband_final.pdf Shelf Number: 145614 Keywords: CigarettesContraband GoodsContraband TobaccoIllegal TobaccoTaxesTobacco Smuggling |
Author: Lemboe, Craig Title: Cigarette Taxes and Smuggling in South Africa: Causes and Consequences Summary: The main instrument within the broader framework of tobacco control in South Africa has been the more aggressive use of tobacco taxes which since 1999/2000 have increased from 0.12 cents per cigarette to 0.38c in 2009/10. The primary goal of these policies is to reduce cigarette consumption and the attendant negative externality. National Treasury (NT) data seem to suggest that these initiatives and higher taxes in particular have been effective in reducing cigarette consumption. However, the official (NT) data pay little attention to the illegal cigarette market which in South Africa has long been assumed to be only a fraction of total cigarette consumption. Comparing an independent consumption survey with the NT data we find that the level of cigarette smuggling in South Africa is in fact significant, constituting between 40% and 50% of the total market, and that cigarette tax hikes have to a large extent contributed to its continued existence and growth by creating a financial incentive to smuggle. Furthermore, the well-established informal sector in South Africa - which developed under Apartheid rule and is characterised by strong networks with other African countries - implies that there is a greater ability and likelihood of consumers switching from consuming legal cigarettes to consuming illegal cigarettes following a tax-induced price increase. There is also much evidence indicating that illegal cigarettes are of inferior quality which, combined with the tax induced shift to smuggled cigarettes, suggests that cigarette tax hikes could have the perverse effect of raising rather than lowering the overall negative externality. Details: Stellenbosch, South Africa: Bureau for Economic Research, University of Stellenbosch, 2012. 28p. Source: Internet Resource:: Stellenbosch Economic Working Papers: 9/12: Accessed February 10, 2017 at: Year: 2012 Country: South Africa URL: Shelf Number: 147770 Keywords: Cigarette SmugglingIllegal CigarettesIllegal marketsTaxes |
Author: Kulick, Jonathan Title: Unintended Consequences of Cigarette Prohibition, Regulation, and Taxation Summary: Laws that prohibit, regulate, or tax cigarettes can generate illicit markets for tobacco products. Illicit markets both reduce the efficacy of policies intended to improve public health and create harms of their own. Enforcement can reduce evasion but creates additional harms, including incarceration and violence. There is strong evidence that more enforcement in illicit drug markets can spur violence. The presence of licit substitutes, such as electronic cigarettes, has the potential to greatly reduce the size of illicit markets. We present a model demonstrating why enforcement can increase violence, show that states with higher tobacco taxes have larger illicit markets, and apply the findings to discussion of public policy toward a potential ban on menthol cigarettes. The social calculus involved in determining public policy toward tobacco cigarettes should include the harms from both consumption and control. We conclude by highlighting areas where more research is needed for effective policymaking. Details: Malibu, CA: Pepperdine University, School of Public Policy, 2015. 52p. Source: Internet Resource: Accessed August 29, 2017 at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2630411 Year: 2015 Country: United States URL: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2630411 Shelf Number: 146936 Keywords: Black Markets Cigarette Smuggling Contraband Products Counterfeit Goods Illicit Markets Illicit Trade TaxesTobacco Violent Crime |
Author: Di Cataldo, Marco Title: Organised Crime, Captured Politicians and the Allocation of Public Resources Summary: What is the impact of organised crime on the allocation of public resources and on tax collection? This paper studies the consequences of collusion between members of criminal organisations and politicians in Italian local governments. In order to capture the presence of organised crime, we exploit the staggered enforcement of a national law allowing for dissolution of a municipal government upon evidence of collusion between elected officials and the mafia. We measure the consequences of this collusion by using newly collected data on public spending, local taxes and elected politicians at the local level. Differences-in-differences estimates reveal that infiltrated local governments not only spend more on average on construction and waste management and less on police enforcement, but also collect fewer fiscal revenues. In addition, we uncover key elements of local elections associated with mafia-government collusion. In particular, Regression Discontinuity estimates show that infiltration is more likely to occur when right-wing parties win local elections. Details: Working Paper, 2017. 60p. Source: Internet Resource: Accessed March 5, 2018 at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3124949 Year: 2017 Country: Italy URL: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3124949 Shelf Number: 149310 Keywords: Organized Crime Taxes |