Document Type

Article

Language

eng

Format of Original

22 p.

Publication Date

12-2009

Publisher

National Tax Association

Source Publication

National Tax Journal

Source ISSN

0028-0283

Abstract

This paper uses a recent increase in Wisconsin’s tobacco tax as a natural experiment to measure the economic incidence of tobacco taxation, using micro-level data on cigarette prices from retail locations in Wisconsin and states that share its border. We find that Wisconsin’s $1 tobacco tax increase was over-shifted to consumers; they pay the entire amount of the tax as well as a premium of between 8–17 cents per pack of cigarettes. We also use geo-coded data to test if the incidence of the tobacco tax is different for locations near the border of states with different tobacco taxation.

Comments

Published version. National Tax Journal, Vol. 62, No. 4 (December 2009): 677-698. Publisher link. © 2009 National Tax Association.

Andrew Hanson was affiliated with the Georgia State University at the time of publication.

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