Feeling new tax's burn

The law of diminishing returns effects everything.Even cigarette taxes.The Denver Post has an article on how the supply side effect finally kicked in,in Colorado.

Since Colorado's 64-cent cigarette-tax increase took effect in January, sales have declined so much that many cities and counties are experiencing double-digit drops in cigarette-tax revenue.

The new tax is large enough that the state still collected $70 million more from cigarettes during the first seven months of this year than last, according to state figures.

But cities and counties, which get only a slim cut of money from the new tax, have seen drops, typically in the tens of thousands of dollars, in the amount of money they receive from cigarette taxes.

I guess the politicians maxed out on this tax and who will have to think of new ways to take taxpayer's money.