ABSTRACT
The federal nature of the United States has important implications for ex cise taxation. At this writing, a significant proportion of the so-called sin taxes are levied by state and local governments. Yet large percentages of the populations of many states live within short distances of other states, and some live near Canada or Mexico. Given the lack of major barriers to inter state commerce incorporated in the U.S. Constitution, it is possible for mil lions of Americans to buy goods and services in other jurisdictions. A jurisdiction that heavily taxes, say, cigarettes, will pay a price in lost business to jurisdictions where taxes are less onerous.1
