One of the things I noticed driving in Ohio yesterday was that gasoline prices were substantially lower than they are in Michigan. ($3.85 in Ann Arbor versus an average of $3.60 in northern Ohio.) As to why this is, I don’t know. Ann Arbor is known for high gas prices, so it isn’t representative of Michigan, but still, Ohio has cheaper gas.  I’m not the only one to notice; the Detroit Free Press called the higher prices here a “mystery,” and said that Chicago “is where Michigan prices are essentially set.”

So… “Chicago” gets to sets Michigan gas prices? Then who sets Ohio gas prices? The whole thing is weird, as Ohio is only 40 minutes away from me.

Hey, I think I just solved the “mystery”!

From a site that looks at Michigan gas prices, I found a state by state gasoline tax map.

Sure enough, Michigan’s gas taxes are nearly 16 cents higher than Ohio’s. Funny, because Michigan is now in Republican hands, and I constantly hear about how the state needs lower taxes as an incentive for people to move here.

While I was filling up at a Pilot station in Ohio near the Michigan border, I went inside to use the bathroom, and I noticed a line of cigarette purchasers — all of whom were buying by the carton. Not being a smoker, cigarette prices normally don’t merit my attention, but this was odd, so I looked up and saw a huge cigarette pricing board behind the cash register. Prices by the carton were in the low forties range, and they obviously did a high volume business — to visiting Michiganders, no doubt!

And guess what! Ohio is not only a gasoline tax haven, it is also a cigarette tax haven.

Here’s another map, helpfully provided by an anti-cigarette tax group:

Again, Michigan’s taxes are much higher than Ohio’s. The Mackinac Center did a study demonstrating that this has led to major bootlegging activity in Michigan, with a predictable upsurge in crime. To his credit, Republican State Senator John Hune has a bill to lower the tax tax by $1.00 per pack. Which would give Ohioans an incentive to drive to Michigan for a change. Right now the economic activity on the border is mainly in Ohio.

I couldn’t help notice that beer is substantially cheaper in Ohio too. Once again, it’s the government!

Because Michigan’s excise taxes are already the highest in the region, Michigan businesses are at a disadvantage with other neighboring states. We lose businesses, jobs and even revenue to Ohio, Indiana and Wisconsin.  Michigan’s excise tax on beer is 300% higher than neighboring Wisconsin.  Raising the tax will only provide incentive for individuals to purchase beer and wine in our neighbor states.

The Michigan Liquor Control Commission has recently warned that smugglers who buy cheaper alcohol in other states rob Michigan taxpayers of millions of much-needed dollars every year – money that pays for critical public services, such as schools and public safety.  Raising the beer tax will only worsen the smuggling problem, rob Michigan families of even more tax dollars and hurt Michigan businesses.

Add to the higher Michigan beer tax the ten cent recycling surcharge per can or bottle that Michigan imposes, and you’re talking $2.40 less out of pocket for a case of beer. Sure, the recycling fee is refundable, but it isn’t charged in Ohio, and you have to keep your cans locked up lest homeless recyclers steal them.  (Fascinatingly, Michigan’s recycling system led to an entirely unprecedented form of crime called “bottle deposit fraud.”)

There are calls for repealing Michigan’s outmoded government alcohol monopoly game, but naturally the beneficiaries are fighting to keep their turf.

These laws are bad for consumers and taxpayers, but good for the wholesalers who spend big bucks on lobbying and campaign contributions to protect their privileges. Busting this relationship between lawmakers and monopolists is overdue. The next time your family shops for a nice merlot to go with dinner, or you purchase a “sixer” for the big game, make a note to ask your own state elected officials how much they received from beer and wine monopolists in the last election campaign.

In discussions comparing the drug war to alcohol prohibition, the point is frequently made that people no longer commit crime to buy alcohol, because the stuff is legal. Well, higher tax differentials can change that in a jiffy! If a state wants a bootlegging problem, all they need to do is raise taxes.

Oppressive taxes simply gouge the law-abiding and create criminal opportunities.

Nothing new or mysterious about any of it.