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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: Timesink
Yes, violence, wait and watch.
61 posted on 07/05/2002 12:45:17 PM PDT by Maelstrom
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To: Maelstrom
Cigarette smuggling has been going on in plenty of states around the country for several years now, as various liberal states jack up the tax rate 300% when the state next door was selling cartons for half the price even before the tax increase. And the nation is not awash in cigarette-related violence. It simply isn't going to happen as long as cigarettes are a legal product that can be purchased almost anywhere by anyone, and the only difference is price.
62 posted on 07/05/2002 12:48:51 PM PDT by Timesink
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To: SheLion
The ANTI'S and politicians also claims that for every 10% increase in price, smoking goes down by 4%..... at that rate, shouldn't we be 100% smokefree by now. ???
63 posted on 07/05/2002 1:09:22 PM PDT by Great Dane
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To: JeanS
The Oneida Nation, the nearest reservation to NYC, is going to be richer than the Saudis in a few years.
64 posted on 07/05/2002 1:13:28 PM PDT by Vince Ferrer
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To: Bommer
but for tabacco companys to be solely taxed

Ah, but the tobacco companies don't PAY the taxes...their customers do. They sold us out with their agreement to pass on all these excessive, oppressive, regressive, punitive taxes to the little guy while protecting their markets and actually trying to create a monopoly. So I don't ever mind trashing the industry just like they trashed us. SMOKE CHEAP--it's your civic duty! Make your own for around $8/ctn!

65 posted on 07/05/2002 1:25:01 PM PDT by Max McGarrity
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To: steve50
Steve, I'd go with either of the two machines mentioned here; I'm using the Excel now and it's great. Had a Supermatic before and gave it to a friend to encourage him to make his own. I'd also suggest you call 1-800-CHEWERS and ask for the free Fred Stoker catalog. They have a Sampler Pack of RYO tobaccos, I think six different ones. Gives you a real good idea what's available.
66 posted on 07/05/2002 1:31:48 PM PDT by Max McGarrity
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To: Great Dane; Gabz
Absolutely, Great Dane. I've been trying to find out the average price of brand name cigarettes in 1991. When I do, I'll tell you just how stupid that anti statement really is.
67 posted on 07/05/2002 1:39:06 PM PDT by Max McGarrity
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To: SheLion
Hey She!! Happy 4th! Just wanted to let you know that Audrey Silk is on Fox with Neil Cavuto (sp?). Audrey rocks!
68 posted on 07/05/2002 1:41:15 PM PDT by VA Advogado
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To: VA Advogado
Yes, audrey is a gem and can sure hold her own against the socialistic antis!!!!
69 posted on 07/05/2002 2:28:15 PM PDT by Gabz
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To: VA Advogado
Yes! Audrey DOES rock! I watched her on Cavuto. She is very well versed in the smoking issue. I just wish they would give her more time to get the point across!

That Danny is another anti-a$$hole!!!!


70 posted on 07/05/2002 2:29:23 PM PDT by SheLion
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To: SheLion
I think you should get some TV time. :)
71 posted on 07/05/2002 3:23:02 PM PDT by VA Advogado
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To: JeanS
"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."

It actually got to the point wherein the tobacco companies were participating in a tax evasion conspiracy involving shipping Canadian cigarettes to the US to be smuggled back into Canada through the Akwasasne - St. Regis Mohawk reserves.

That is another nice thing about New York from a smuggling perspective - an aboriginal reserve straddling the international boundary.

It got quite hairy for a while involving firefights in the reserve and on the river. At one point the municipal offices at Cornwall took some rounds.

72 posted on 07/05/2002 3:37:45 PM PDT by Clive
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To: VA Advogado
I think you should get some TV time. :)

~~~~~~blush


73 posted on 07/05/2002 3:47:38 PM PDT by SheLion
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To: SheLion
Cool grafix SheLion. Marlboro $2.40 a pack here in Richmond VA.
74 posted on 07/05/2002 4:36:08 PM PDT by jaz.357
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To: hellinahandcart
I actually hit the "smugglers" link hoping to find a list of names (cuz I need names!). LOL, no such luck.

I was thinking the same thing! How sad is that?

75 posted on 07/05/2002 5:19:13 PM PDT by NYCVirago
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To: Timesink
I agree with you that violence is not going to be an issue. Much of the "smuggling" is going to be rather hard to prosecute. Presents for relatives and family. Courtesy gifts for business contacts. Tourists (both from and to NY) taking a carton or two into the state. Internet sales.
Americans are resourceful, and the product is still legal.
76 posted on 07/05/2002 7:27:41 PM PDT by speekinout
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To: JeanS
Smuggling cigs had been going on for as long as Cigarette taxes have existed.

One notorious mob turncoat described how he got into the mafia with this gig. The plan was simple, drive across state lines.. buy as much as you can carry.. drive back.. drive around to factories & construction sites when they were on break.

He said when he first got into it and sold all he had after a couple of stops they started renting trucks to go make the buys.

77 posted on 07/05/2002 7:31:37 PM PDT by Jhoffa_
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To: newcats
Tell me more about these "cartons from Columbia"...
78 posted on 07/05/2002 7:37:54 PM PDT by M. T. Cicero II
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To: Maelstrom
This was meant for you.
What makes you think I like taxes - taxes on anything for that matter?

If these smoking-Nazis want to OUTLAW cigs - do it and quit farting around with taxing them out of existance.

And I'm speaking as one who went through a period where I puffed on cigs for awhile ...

79 posted on 07/05/2002 8:24:50 PM PDT by _Jim
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To: SheLion
RINO Mayor Bloomberg
YOU KNOW he's really a democrat - don't you?

He ONLY became a Repub to run for mayor (the pipeline is too back-up on the DemocRat side to get in edgewise) ...

80 posted on 07/05/2002 8:27:01 PM PDT by _Jim
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