Director's law in tennessee
I’ve got a new analysis of a proposal in Tennessee to fund a package of education, smoking cessasion and farm program spending with a 40-cent increase in the state’s cigarette tax. Unfortunately there’s an unanticipated side effect:
While the Governor’s plan to boost education spending may be well intended, funding the Schools First initiative through tobacco taxes rather than general sales taxes will make low-income households in Tennessee much worse off that they could otherwise be. Because the plan relies almost entirely on cigarette tax revenue, at least three components of the plan have the perverse effect of redistributing millions of dollars from low-income Tennesseans to the highest-income households in the state.
Sounds like a case of Director’s Law if you ask me. Read the full piece here.
P.S.—Bonus points for locating the Tax Foundation reference in the famous Stigler piece above.
Posted by Andrew on Wednesday April 18, 2007 | Feedback?
