Making something illegal does not get rid of them. Drugs tend to be stranger when illegal. It is costly to make something illegal and it is a waste of time. It is resistant to change as 33 billion get arrested to 1.5million. More people are in prison for drugs than people in prison for other reasons. Prices for cocaine have decreased. Marginal cost of going to jail is dropping to zero after two strikes.
Excise tax - The legal liability for tax is on the seller. But who is baring the burden?
$3.75 to $4.00 costs to buyers is 0.75 on the economic burden.
$3.75 pay money costs to sellers = 3-2.75 = $0.25
Prices does not increase by the amount of the tax. Taxes can be bad because they prevent trascations from happening. Costs of IRS is also costly to monitor, enforce, tax, cheating the taxes is bad, wasting time, and raising taxes.
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