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Van Dough: Why cigarette smugglers love New York.
Reason Online ^ | 7/5/02 | Jacob Sullum

Posted on 07/05/2002 8:06:56 AM PDT by Jean S

In Elizabethan England, the historian Egon Corti reports, tobacco sold for its weight in silver. That would suit New York Mayor Michael Bloomberg just fine.

Bloomberg recently signed a bill raising the city's cigarette tax from 8 cents to $1.50 a pack. With a state tax of $1.50, the highest in the country, New Yorkers were already paying more for cigarettes than other Americans. Now the price of some brands is more than $7, nearly twice the national average.

Ostensibly, the tax hike was a revenue measure. "City officials say the new tax will bring a much-needed $111 million into the city's coffers this year," The New York Times reported, "helping plug a budget shortfall of nearly $5 billion."

But Bloomberg said it was really all about public health. "This may be the most important measure my administration takes to save people's lives," he declared, arguing that higher cigarette prices will encourage smokers to quit, giving them extra years in which to thank him for the favor he is doing them.

In fact, the mayor doesn't even want the money. "If it were totally up to me," he said, "I would raise the cigarette tax so high the revenues from it would go to zero."

Bloomberg thus announced the purity of his own motives even as he took his cut from a business the anti-smoking movement depicts as inherently evil, profiting from the deadly folly of its customers. When a New Yorker buys a pack of Marlboros, the city will make four or five times as much as Philip Morris does. But that's OK, because the mayor's heart is in the right place.

For politicians confronting budget deficits, the opportunity to raise money at the expense of an unpopular minority while expressing sympathy for the people they're fleecing is hard to resist. So far this year 10 states have raised their cigarette taxes, and several others are considering it. The levies in New Jersey and Massachusetts may soon match or exceed New York's.

But this competition to pick smokers' pockets--I mean, to save smokers' lives--does have limits. Although Bloomberg seems to think that a high enough tax would eliminate smoking, in the real world smokers have alternatives.

Rather than pay $7.25 for a pack of Camels, for instance, they can buy them online for $2.70. Or they can buy them untaxed in New York, courtesy of smugglers who already make a nice living transporting cigarettes from low-tax states in the South to high-tax states in the Northeast.

The cigarette tax in New York City, where I used to live, is more than 100 times the tax in Virginia, where I live now. I may get into the business myself.

Then again, the competition might be a little too rough for me. A few months ago the FBI announced the arrest of 17 people accused of smuggling cigarettes from North Carolina to raise money for the terrorist group Hezbollah.

The government said the ring was earning as much as $10,000 with each van load. Thanks to Michael Bloomberg and the New York City Council, the potential earnings for terrorists have doubled.

Robert L. Shepherd, a former New York State tax official, predicts the city will see a decline in revenue as smokers shop around. "I think with $1.50 they'll pass the tipping point," he told the Times. That's what happened several years ago in Canada, where the government was forced to cut cigarette taxes in response to widespread smuggling and evasion.

Yet Bloomberg, who equates zero tax revenue with zero smoking, apparently thinks smokers will not be resourceful enough to avoid his tax. He also seems to discount the possibility that they will respond to higher prices by, say, economizing on other expenditures, getting a second job, dipping into their savings, going into debt, or turning to crime.

These assumptions are surprising, since Bloomberg also believes that life without nicotine is unthinkable for the average smoker. "This is not exactly freedom of choice," he informed opponents of the tax hike, "given that smoking is addictive and that the industry spends billions of dollars to get people hooked on it."

No doubt Bloomberg is right that some smokers will quit rather than pay exorbitant prices or go to the trouble of finding alternative supplies. But that choice will demonstrate that they were never the helpless victims he makes them out to be.


TOPICS: Editorial; News/Current Events; US: New York
KEYWORDS: bloomberg; cigarettetaxes; nannystate; newyork; newyorkcity; pufflist
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To: rodeocowboy
More and more conservative lawmakers have turned into RINOS.

I have been keeping track since the first of the year, and a lot of them are turning against us. Snowe and Collins are RINO'S of the WORST kind!


41 posted on 07/05/2002 10:33:10 AM PDT by SheLion
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To: SheLion
Got your imput already gal, you're my expert, just getting a second opinion,lol. Hunting for a good light additive free tobacco now, all help appreciated. :-)
42 posted on 07/05/2002 10:33:30 AM PDT by steve50
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To: rodeocowboy
Bloomberg is a RINO.

Only ran as a Republican so as to have a clean ticket in the primaries.
43 posted on 07/05/2002 10:40:31 AM PDT by Maelstrom
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To: hellinahandcart
I actually hit the "smugglers" link hoping to find a list of names (cuz I need names!). www.yesmoke.com
44 posted on 07/05/2002 10:43:53 AM PDT by cpprfld
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To: steve50
steve.............your so cute!


45 posted on 07/05/2002 10:49:24 AM PDT by SheLion
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To: JeanS
RINO Mayor Bloomberg said: "If it were totally up to me, I would raise the cigarette tax so high the revenues from it would go to zero," said the mayor, who has said he hopes that the higher taxes will persuade smokers to quit and will prevent children from becoming smokers.

(Seems the mayor, has a double standard, when it comes to smoking. This is the same Mayor, which advocated, the hike in the city cigarette tax, to "discourage smoking".)

Bloomberg must still be smoking dope if he thinks anyone buys his nonsense that hiking the cigarette tax is a public health measure. The theory that people, especially "the children", stop smoking because of price increases has been discredited for quite some time. When California raised taxes a few years ago its smoking rate supposedly went down. For reasons never explained by anti-tobacco, but obvious to even a casual observer of human nature, the smoking rates in neighboring -- and low tax -- Nevada miraculously rose at just the same time. No one will quit in New York City but many will buy out of state or off the internet.

Even the bozos running New York don't believe people will quit. They estimate the new tax will bring in $111-million in the coming fiscal year. For the next fiscal year they estimate the tax will enrich the city coffers by $116-million. If masses of people are going to quit, as the mayor pretends, why would the taxes collected continue to grow?

46 posted on 07/05/2002 10:54:30 AM PDT by SheLion
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To: steve50
I too like light cigarettes and the brand I use is "61." If you prefer ultra-lights just use "ligt" tobacco and "light" tues.

61's phone # is 1-800-61stuff.

47 posted on 07/05/2002 10:59:59 AM PDT by Gabz
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To: JeanS
I was going for an MBA and took a pricing course, and cigarettes came up, because the professor had just been contacted by somebody looking to hire a pricing expert for cigarettes. The prof said he declined but gave leads to the guy.

I'm not a smoker, ergo, I never paid attention until then. So Phillip Morris a short while later lowered the price of Marlboros. Ding-ding.

I was on vacation in Maine in 93 give or take, and the price of Marlboros that stuck in my mind was $1.55/pk.
48 posted on 07/05/2002 11:16:30 AM PDT by Calvin Locke
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To: AdA$tra; AppyPappy
AppyPappy, are you a psychic?

They just raised the taxes on smokes here in Kansas as well. The Dept of Revenue info gal went on all the news shows to make it clear that anyone in possesion of more that 200 cigarettes without a Kansas tax stamp affixed will be fined $1,000 and could face jail time.

49 posted on 07/05/2002 11:27:11 AM PDT by Dakmar
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To: Hunble
This is absolutly criminal!

I'm not a lawyer, so I'll just toss the question out there and hope someone is: Isn't there a point past which taxing any product is illegal government interference in commerce? I mean, 50 cents a pack is one thing, but once the government starts intentionally jacking the prices so high that almost nobody can afford the product, does that not violate any laws?

50 posted on 07/05/2002 11:38:51 AM PDT by Timesink
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To: Timesink
Now you know the reason for the War Between the States.

The South said "Yes, there's a limit."
The North said "No, there's not."

Interesting how history repeats itself, no?
51 posted on 07/05/2002 11:41:00 AM PDT by Maelstrom
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To: Maelstrom
I hope you too are somewhere in NY so you can see for yourself the violence the black market in tobacco brings.

The VIOLENCE? Oh, for crying out loud. As long as anybody can legally cross the border into New Jersey or Connecticut (or hell, even Yonkers) to buy cartons and then bring them back and sell them in NYC to your own friends and coworkers without anyone really noticing (a carton of smokes is a carton of smokes and will not inherently raise suspicions, unlike someone standing on a corner offering little tiny plastic bags filled with powdery substances), there aren't going to BE any turf wars. The product is LEGAL. This is merely a matter of economics 101.

I suppose if the Mafia were to get involved and start hijacking some of those vans filled with cigs from Virginia or North Carolina, you might get a little "violence", but that would be a false argument too because the Mafia's going to get involved in whatever's available, with the same outcomes no matter what.

52 posted on 07/05/2002 11:46:29 AM PDT by Timesink
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To: **New_York
bump for bump list
53 posted on 07/05/2002 11:48:13 AM PDT by Timesink
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To: Timesink
An excellent question. I'll keep track of this thread to see if you get some responses. I too would like a legal beagle to comment.
54 posted on 07/05/2002 11:48:37 AM PDT by Judith Anne
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To: Timesink
I'm not a lawyer, but have dealt with the state legislature for so many years that I can honestly say I do not believe there is a limit at which a tax becomes equivalent to interfering with commerce.

In fact the government of New York City is perfectly within their rights to confiscate that which they would consider contraband, in this case cigarettes without a NYC tax stamp. Granted, unless you get pulled over for something else, I don't think NY's Finest are going to be stopping motorists coming into the city checking for out of city or out of state purchased cigarettes. But they can do it.

55 posted on 07/05/2002 12:00:24 PM PDT by Gabz
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To: JeanS
Yet Bloomberg, who equates zero tax revenue with zero smoking, apparently thinks smokers will not be resourceful enough to avoid his tax.

How does someone so stupid make so much money?

Anyway, now we know what some of next season's Sopranos episodes will be about.

56 posted on 07/05/2002 12:08:51 PM PDT by Jesse
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To: Gabz
I do not believe there is a limit at which a tax becomes equivalent to interfering with commerce.

You are correct. Just remember, liberals (including RINO's and Democrats) think that they own all of your money, and just argue about how much to let you keep. Ask a liberal politician some time if he or she thinks there is or should be a limit to the income tax, and what it should be. They probably will say yes, but they won't tell you what it is.

57 posted on 07/05/2002 12:13:29 PM PDT by Jesse
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To: Timesink
You are correct. In the early days, each State enforced taxes upon products between each State.

It became so impossible, that the Constitution addressed that issue and it is now known as the "Commerce Clause" which has been so abused since FDR.

This taxation between each of the States is exactly why the Federal government was granted this power.

No problem, I will just exploit this stupidity for my own personal profits.

58 posted on 07/05/2002 12:16:38 PM PDT by Hunble
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To: Timesink
I mean, 50 cents a pack is one thing, but once the government starts intentionally jacking the prices so high that almost nobody can afford the product, does that not violate any laws?

Just the equal protection clause of the constitution.
Taxing a legal product, and thus indirectly a defined segment of the population exclusively, would appear to violate it.
When at the same time no gay-related products are specially taxed, and AIDS, (unlike tobacco) is 100% fatal.

59 posted on 07/05/2002 12:31:37 PM PDT by Publius6961
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To: Hunble
Uhhh. I left my Ouija board in my other suit.
Can you please tell us where?
60 posted on 07/05/2002 12:32:22 PM PDT by Publius6961
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