Our tobacco tax policy is broken (and how Canada/UK fixed it)
The current excise tax strategy has backfired. By pushing a pack to $40+, we’ve created the most profitable black market on earth, funding organized crime turf wars and firebombings.
We need a hybrid of what worked overseas:
The Canada Approach: In the 90s, Canada realized high taxes fueled massive smuggling. They swallowed their pride and cut the tax to instantly kill the black market's profit margins.
The UK Approach: The UK kept taxes high but went scorched-earth on enforcement—crushing the supply chain from ports to retail shops.
Right now, Australia is trying to enforce its way out of a problem, do we have the cojones? while keeping the criminal profit margins astronomically high.
It’s a paradox.
Should the government lower the excise to kill the financial incentive, or just drastically ramp up the penalties? Or is the current government too afraid of the public health optics to change course?
Meanwhile the profits fund other illegal activity, that are a clear and present danger. Are we too arrogant to admit we are wrong? Canadians are a bit smarter than us?