Studies

Cigarette Taxes and Smuggling: A 2016 Update

Click here to view the PDF of the full study.
Introduction
Since 2008 the Mackinac Center for Public Policy — and more recently in conjunction with the Washington, D.C.-based Tax Foundation — has worked to estimate the degree to which cigarettes are smuggled into and out of American states. Our research, and that of other scholars too, suggests that smuggling is a rampant problem, particularly in states with high cigarette excise taxes.
Unintended and unforeseen consequences are a frequent problem in public policy. Few politicians realize when they vote for higher excise taxes that doing so may dramatically increase cigarette-related crime, such as smuggling. These crimes not only deprive local and state governments of tax revenues, they also tend to descend into violence, which produces all sorts of unnecessary damage. Policymakers should take these realities into consideration when contemplating how much to tax cigarettes.
This report analyzes the relationship between cigarette tax rates and cigarette smuggling rates. It relies on the same statistical model used in our previous studies, but uses the latest available data from 2014. New York State once again claims the highest smuggling rate in the nation. In fact, according to our analysis, New Yorkers consume more smuggled cigarettes than they do legally taxed ones. New York state has the highest excise tax rate on cigarettes in the country at $4.35 per pack and New York City adds another $1.50 tax. Arizona, Washington state, New Mexico and Minnesota round out the top five states for percentage of in-bound smuggling. Michigan ranks 12th, down two positions. … more

Problems With Estimating the Union Wage Premium

Click here to view the PDF of the full study.
The “union wage premium” — the amount a union worker makes in wages and salary above a similar nonunion worker — is often used to highlight the potential value of joining a union. Unions claim that if workers unionize, their wages will increase, because allegedly the average union worker makes more than the average nonunion worker. If this were universally true, it seems like a compelling argument for enrolling in a union. However, the decline in union membership rates over the last several decades shows that an increasing number of workers have not been persuaded to join existing unions or organize new ones, suggesting that they are not convinced that becoming a union member will automatically boost their pay.
Some still maintain that union members earn significantly more, on average, than nonunion workers: the American Federation of Labor and Congress of Industrial Organizations union says that “union workers’ wages are 27 percent higher than their nonunion counterparts” and the U.S. Secretary of Labor claims that union workers make $950 per week compared to nonunion workers’ $750 per week. But these statistics are based on a relatively simplistic view of the data. As this paper will demonstrate, there are significant challenges to using official government data to estimate the size of the union wage premium.  … more

An Analysis of State-Funded Tourism Promotion

Click here to view the PDF of the full study. … more

An Evaluation of Michigan's 21st Century Jobs Fund

In 2005, Michigan Gov. Jennifer Granholm launched a project intended to stimulate he state’s economy: the 21st Century Jobs Fund. At the time the state had not yet recovered from the 2001 national recession and was suffering the country’s highest unemployment levels.
After a tough political battle to establish the program and after making a number of compromises, the 21st Century Jobs Fund was created. The program was to be funded from 2006 to 2015, and in the 2013-14 legislative session, under a new governor and Legislature, it was extended until 2019 and provided with $75 million in continued annual funding.
After ten years of existence, this program has received little attention and its effectiveness has never been measured. All government programs should be reviewed regularly, and it is time for a close look at the 21st Century Jobs Fund. … more

Top Labor Reforms for Michigan

Michigan School Privatization Survey 2016

Click here to view the PDF of the full study.
This is the 14th edition of the Mackinac Center's annual school privatization survey. We ask every school district in the state if they outsource one of the three main noninstructional services — custodial, transportation and food services. The results from this year's survey show that 70 percent of school districts contract out for at least one of these services. … more

Michigan School Privatization Survey 2016

Click here to view the PDF of the full study.
This is the 15th edition of the Mackinac Center's annual school privatization survey. We ask every school district in the state if they outsource one of the three main noninstructional services — custodial, transportation and food services. The results from this year's survey show that 70 percent of school districts contract out for at least one of these services. … more

Worker's Choice

Freeing unions and workers from forced representation

Where there’s a unionized workplace, there’s forced representation. That’s true regardless of whether a state is right-to-work or not. Even if a union can’t get a worker fired for not paying dues, the worker is still bound by union representation. … more

Guarantee of
Quality Scholarship

The Mackinac Center for Public Policy is committed to delivering the highest quality and most reliable research on Michigan issues. The Center guarantees that all original factual data are true and correct and that information attributed to other sources is accurately represented.

The Center encourages rigorous critique of its research. If the accuracy of any material fact or reference to an independent source is questioned and brought to the Center’s attention with supporting evidence, the Center will respond in writing. If an error exists, it will be noted in a correction that will accompany all subsequent distribution of the publication. This constitutes the complete and final remedy under this guarantee.