Summary: It's the Great American Taxing Game and you have chosen to tax cigarettes to be paid by cigarette suppliers. Who actually bears the burden of the tax? Because smokers are pretty unresponsive to price changes, they are most likely to pay. This is not necessarily a bad thing: smokers pay higher prices and the government collects the revenue. But, does it work at all levels? Your host Prof. Art Carden demonstrates why cigarette taxes are not particularly effective at the state or local levels. Don't forget to see what would happen if you chose to tax oil companies or luxuries instead.
