In fiscal 1958, the first cigarette tax increase raised the rate to 5 cents, and the 1960s saw three changes in the rate. First, in fiscal 1960 it rose slightly for the second time, to 6 cents. Then in fiscal 1962 it was lowered to 5 cents. This decrease coincided with a slight increase in the number of taxed cigarettes sold in the state relative to other states, and it is reasonable to assume that the rate decrease led to a small decrease in illegal cigarette purchases. Later, however, the rate rose to 7 cents in fiscal 1963 and remained there for the rest of the decade.
In terms of law enforcement, the decade started off on an optimistic note, just as the last decade had. Said the director of Cigarette and Miscellaneous Taxes at the Department of Revenue: "At the present time in Michigan we do not feel that any serious border problem exists with our neighboring states." In 1961, the NTTA reported that no arrest had been made for illegal transportation of cigarettes for the past two years but stressed the need for "continued vigilance." The next few years did see some arrests, including one in which a bus and 1,605 cartons of cigarettes were seized. There were also reports of traffic in cigarettes and alcohol between Detroit and Windsor, Ontario.
One problem, which could have become more serious if left unattended, was Michigan's general tobacco products tax, which went into effect in January 1960. Cigars were not covered by the federal Jenkins Act, so many Michiganders used mail order to purchase tax-free cigars, just as they once had with cigarettes. In some cases, cigars were billed as other items, such as tissues or candy. The problem was compounded by the fact that adjacent states did not tax cigars, so Michigan residents who lived near the border often purchased them in neighboring states, sometimes sidestepping Michigan's tobacco products use tax during the shopping trips. Legislators allowed the tax to expire in June 1961.58]
Across the country, the cigarette tax landscape began to change in the mid-1960s as state legislators responded to growing concerns about smoking and health. In 1964, the U.S. Surgeon General issued his famous report linking smoking to a variety of health problems. The report prompted legislators to raise cigarette taxes even further.
In 1977, the American Commission on Intergovernmental Relations said of the report: "Prior to that time, the disparity in state tax rates was not very great. There was only a little casual smuggling. There is no question but that the federal action in releasing that Surgeon General's report really amounted to throwing gasoline on the tax rate fires, especially in the Northeast and Midwest where states were having serious fiscal problems." The release of the report gave way gradually to negative changes in the public perception of smoking. This attitude is so prevalent today that smoking has become a politically popular target of taxation.
 David W. Parker, "Border Problems in Michigan," Proceedings from the 35th Annual Meetings of the National Tobacco Tax Association (Chicago: Federation of Tax Administrators, 1961), 23.
 Ibid., 24.
 "Report of the Committee on Tax Evasion," Proceedings from the 38th Annual Meetings of the National Tobacco Tax Association (Chicago: Federation of Tax Administrators, 1964), 56.
 "Committee on Tax Evasion," 38th Annual Meetings, 72.
 "Border Problems in Michigan," 35th Annual Meetings, 23.
 John Shannon, "The Prospects for Federal Legislation against Cigarette Smuggling," Proceedings of the 51st Annual Meeting of the National Tobacco Tax Association State AND Federal Responsibility, (Chicago: Federation of Tax Administrators, 1977), 26.