Policymakers should be very cautious about relying too heavily on excise tax increases to pay down tax reductions elsewhere. Ideally, revenue offsets would come from more stable, broader-based revenue sources.4 min read
Ulrik was Director of Excise Tax Policy with the Center for State Tax Policy at the Tax Foundation. His focus was on excise taxation and supporting the team developing principled positions on various excise taxes ranging from gasoline to tobacco.
Prior to joining the Tax Foundation, Ulrik worked in tobacco, finance, and public relations. He has a master’s degree in business administration from Copenhagen Business School and has always been interested in public policy—he has been involved in local politics since high school.
Ulrik was born and raised in Copenhagen, but now resides in Washington, D.C. with his wife and infant daughter. In his spare time he enjoys playing and watching soccer, as well as traveling.
Limiting addiction to nicotine is a laudable goal, but lawmakers should exercise caution with the methods employed. Using gross receipts taxes on businesses to effectively levy an excise tax introduces complexity to an already flawed tax design. It is better to let the excise tax internalize externalities and the business tax raise general revenue.3 min read
In Pennsylvania, Gov. Tom Wolf (D) has proposed phasing out the gas tax as the main funding mechanism for the state’s highway fund, and he has established a commission to recommend options for replacing it with alternative revenue sources. In a statement, the governor called the current motor fuel tax burdensome, outdated, and unreliable.5 min read
The excise tax family is growing. Over the last decade, several products have become subject to excise taxes or are in the process of becoming so. Given this development, it is more crucial than ever that lawmakers, businesses, and consumers understand the possibilities and, more importantly, limitations of excise tax application.77 min read
With several states entertaining proposals to tax the financial transactions of savers and investors who don’t even live in their states, some members of Congress see an interstate commerce question worthy of a federal response.6 min read
Amid a debate over water extraction from Florida’s springs, Florida Sen. Annette Taddeo (D) has introduced a bill (SB 562) which, if enacted, would establish an excise tax on water extraction beginning July 1.4 min read
At least four states—Connecticut, Hawaii, New York, and Washington—are considering statewide excise taxes on sugary drinks this year.4 min read
West Virginians would face extraordinarily high taxes on vapor products in state if Senate Bill 68 becomes law. The bill would increase taxes on liquid used in vapor products from 7.5 cents per milliliter (ml) to $1 per ml—an increase of over 1,300 percent.3 min read
The potential override of Gov. Larry Hogan’s (R) veto of a digital advertising tax (HB732) looms large over the current legislative session in Maryland, though it is only one of many tax proposals under consideration in the state.7 min read
Although this week’s Super Bowl festivities may be muted, states with legalized sports betting may have something to cheer: a tax revenue bump thanks to the accompanying excise taxes.3 min read
Washington state lawmakers have proposed a bill that would make it the second state to ban all flavored tobacco and the first to impose a nicotine cap on vapor products, and would increase taxes on vapor to among the highest in the nation.5 min read
Despite the potential of consumption taxes as a neutral and efficient source of tax revenues, many governments have implemented policies that are unduly complex and have poorly designed tax bases that exclude many goods or services from taxation, or tax them at reduced rates.40 min read
The Massachusetts flavored tobacco ban highlights the complications of contradictory tax and regulatory policy, the instability of excise taxes that go beyond pricing in the cost of externalities, and the public risks of driving consumers into the black market through excessive taxation or regulation.5 min read
With most states experiencing reduced tax revenues due to the coronavirus pandemic, several are contemplating whether recreational marijuana legalization and taxation may be one avenue to raise new revenue. While states that have already legalized do raise meaningful revenue, lawmakers should remember that establishment of legal markets takes time.5 min read
Lawmakers looking to close budget shortfalls would be well-advised to consider other and more stable avenues for new revenue.28 min read
By the time marijuana is sold to a consumer, local taxes could be applied four different times—by one or more localities.5 min read
While increasing taxes on cigarettes may limit demand, a 200 percent hike may also result in a number of unintended consequences, such as increased smuggling.2 min read
New York already suffers from significant smuggling of untaxed tobacco products—smuggled cigarettes accounted for 53 percent of cigarettes consumed in the state in 2018—and further increasing tobacco taxes is likely to make matters worse.3 min read
Excessive tax rates on cigarettes in some states induce substantial black and gray market movement of tobacco products into high-tax states from low-tax states or foreign sources. New York has the highest inbound smuggling activity, with an estimated 53.2 percent of cigarettes consumed in the state deriving from smuggled sources.13 min read