The Great Lakes State currently levies a cigarette tax of $2.00 per pack. Gov. Jennifer Granholm has proposed a 25-cent per-pack cigarette tax increase. We estimate that this hike would raise Michigan’s overall smuggling rate to 28.3 percent of the state’s total consumption and the commercial smuggling rate to 18.8 percent — up from 26.0 percent and 16.6 percent, respectively. Legal sales would drop 3.3 percent, but revenue to the state is estimated to increase by approximately 9 percent.
 Scott, “Proposed Increase of Michigan Beer, Cigarette Taxes to Boost State Revenue Draws Fire from Industry, Lawmakers,” The Grand Rapids Press, Aug. 3, 2009, http://www.mlive.com/news/grand-rapids/index.ssf/2009/08/proposed_increase_of_michigan .html (accessed Nov. 4, 2010).