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Michigan lawmakers have consistently failed to address our state's structural revenue problem for decades. Michigan simply does not raise enough in taxes, and lawmakers as a whole have been apprehensive to adequately address it. While more could be done on the revenue side, Michigan has some sensible solutions on the table to both raise revenues in the short term and improve physical and mental health outcomes in the long term for Michiganders.
Michigan has not increased its tax on tobacco products in over 20 years. Currently, consumers pay a $2 tax on a pack of 20 cigarettes, the second-lowest tax in the Great Lakes region. If we were to index this to inflation, the tax would be $3.52 today. Additionally, Michigan should look at increasing its tax on other tobacco products (like moist snuff, cigars, and cigarillos), which currently sits at 32%. Taxes like these reduce tobacco consumption, and it has been found that tobacco taxes, like those on cigarettes, have a particularly strong effect on young adults. Tobacco taxes will lower healthcare costs by reducing tobacco-related illnesses like lung cancer, so these taxes will bring in revenue but also help Michigan save money on healthcare, a sector already strained by high demand.
But young adults today are not buying traditional tobacco products; instead, they are opting for vape products or e-cigarettes. Young adults ages 21-24 are the most likely group to consume e-cigarettes at 15.5%. Additionally, 5.9% of middle and high school students use vape products per the Centers for Disease Control. Health risks from vaping are well documented and the market is large and growing; yet Michigan is behind most of the country, being one of 16 states that do not tax vape products, and the only state in the Great Lakes region to not levy these taxes. Taxing vape products at the same wholesale rate as the other tobacco products listed above would bring us in line with our neighboring states and most states in the country. It will also help improve the health of Michigan youth by discouraging consumption.
We also need to update our taxes on gambling, a profitable and pervasive industry that is mostly impacting young men. In June 2026 alone, Michigan casinos and gaming operators generated over $340 million in gross revenues. In 2025, Michigan casinos generated nearly $3 billion in revenue, with the state collecting nearly $600 million dollars in taxes. Michigan legalized internet gaming in 2021 and has taxed the industry since, including gross revenues. The taxes raised are distributed to various funds that help lower the negative impacts of gambling. Despite Michigan taxing casinos progressively, with operators paying a range of 20% to 28% depending on how much a casino generates in gross revenue, state taxes on online sports betting -- which reached over $55 million in October -- are some of the lowest in the country.
The proliferation of gambling comes at a societal cost, with a notable increase in calls to the problem gambling hotline. Since the legalization of gambling, calls to the state's Problem Gambling Helpline have increased by 171%. The National Council on Problem Gambling estimates that the proliferation of gambling costs the U.S. $14 billion every year due to job loss, healthcare for treatment of gambling addiction, and bankruptcy. Teens and young adults are especially prone to addiction, which often overlaps with depression, anxiety, and self-harm. According to the latest Kids Count in Michigan report from the Michigan League for Public Policy, the state has seen a surge in teen mental health issues. Easy access to online gambling among teens, despite age restrictions, raises addiction concerns for young people because their brains are still developing.
Michigan should update its taxes on these socially harmful industries and habits, but relying on "sin taxes" alone is not enough, especially when we want to decrease the consumption of these goods and services. Reducing cigarette usage in Michigan is a worthwhile goal and a net positive for Michigan, but would also mean that tax revenue is depleted. Therefore, Michigan needs to look at more stable revenue sources -- like income and corporate profits -- to close these revenue shortfalls we are seeing across the state. Nevertheless, these taxes are a good start.