i would argue that if taxes are so onerous as to support a black market for a legal good, the taxes are probably much too high. for instance, consider the price of cigarettes in the state of new york. the average cost of a pack (after tax) is $12.85. the federal tax is about $1 per pack, and the state government levies an additional $4.35. without accounting for local taxes that are added in some counties/cities, that amounts to a ~70% tax on a pack of cigs. in addition to being an absurd tax from the get-go (in my opinion), it is also quite regressive, since poor people are significantly more likely to be smokers. when you add states that levy per-pack taxes of less than $1 to the mix, you basically guarantee that people are going to bootleg cigarettes.

> Cigarettes are legal and people still smuggle and sell them on the black market to avoid paying taxes. Your scheme would be mostly indistinguishable from the current prohibition and would still be dominated by cartels and SWAT teams.

Then where are the cartels and SWAT teams in the black market for cigarettes? The difference in the level of violence is stark. And most of the cigarettes on the market are sold through legal channels.

Failing to eliminate 100% of all crime is hardly an indictment of a significant improvement from the status quo.