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I think for certain "unpalatable" vice taxes, the increase in revenue is usually not worth the bad publicity. But one example I can think of regarding cigarette taxes is the increase in smuggling they cause, and as a consequence a lot of "government action" to prevent said smuggling. What ends up happening then is you get to see a glimpse of the thinking not being "lets keep people from smoking" but rather more in terms of "lost revenue" or "tax money stolen by smugglers".

On some level, if the tax is there to "discourage" people, then the fact that they're willing to buy "smuggled" goods to save a bit of money shows you that they're not discouraged enough and they're not your target audience.



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