Posted on 11/24/2002 9:20:48 AM PST by SheLion
Douglas Smith, a chain-smoking mail-order entrepreneur from the coal mining town of Ashland, Ky., wants to share his bad habit. The idea struck last winter, when word of Mayor Bloomberg's proposed cigarette tax increase made the local news.
"I don't know why it aggravated me so much," said Mr. Smith, who smokes three cartons a week. "I'm not even from New York and it makes me angry. It really drives me nuts."
After a few cigarettes, a light bulb went on. "There's an opportunity for people to go in there and make literally millions of dollars," said Mr. Smith, a former landfill operator. With the tax in place, New Yorkers now pay about $7 a pack.
Two months ago, Mr. Smith and a neighbor started El Diablo's Tobacco Shack to sell cheaper cigarettes to New Yorkers. Kentucky has the second-lowest cigarette tax in the country, at 3 cents a pack. Virginia, at 2.5 cents, is the lowest, while New York City is the highest with a combined state and city tax of $3.
Interstate tobacco retailers have grown in recent years. Federal law requires mail-order cigarette customers to pay tax in their own states, but the law is rarely enforced.
El Diablo's is probably alone among the interstate tobacco retailers in marketing only to New York City. Working with a direct-mail company, El Diablo's has started to blanket the city with red-and-white fliers, asking "fellow New Yorkers" if they are tired of paying high prices for cigarettes. Of the 250,000 pieces mailed so far, 10,000 have replied yes, Mr. Smith said.
Newport menthols, traditionally marketed to blacks and Latinos, are the most popular. People in the South Bronx and eastern Brooklyn have been big buyers.
"We just figured that's where the working-class people are," Mr. Smith said. "Most of your smokers are people who can't afford the extra taxes." To that end, El Diablo's accepts payments not only by credit card, but also by personal check and even c.o.d. These easy-payment options don't sit well with some observers.
"I've never heard of this before," said Eric Lindblom, a policy analyst for the Campaign for Tobacco-Free Kids, a Washington advocacy group. "It's preying on poor people." Like Mayor Bloomberg, Mr. Lindblom voices hope that the higher taxes will be an incentive for people to quit.
Mr. Smith sees it differently. "Our plan is to make sure everybody has access," he said. "People have the right to smoke. I'm waiting for Bloomberg to quit drinking, so he'll start calling for prohibition."
Attack the bottom line. Take away their money. Here in California, the state used to get hundreds of dollars per year in tobacco taxes from yours truly. But then they got greedy and wanted $2,000 per year from me. That's why they now get nothing from me. Instead, it all goes to tobacco dealers in Bush country.
Actually, I cost them more than the $2,000 since (1) they will also collect less in business revenue from California cigarette retailers and 2) I induce other California smokers to send their tobacco dollars out of state also.
EXCELLENT!!!!
And how does he avoid demands for customers' lists?
Bwahahahahaha!
Oh, and one other thing -- the state of California estimates that it has lost 300 million dollars per year in tobacco revenues since the tax hikes started in 1998. That means they admit to losing 1.2 billion dollars worth of cigarette taxes over the past 4 years. It's probably significantly higher than this, especially when associated losses are factored in. All they've succeeded in doing is to drive business out of state. LOLOL!
Careful what you wish for
There is nothing to prevent the same leeches from taxing tobacco supplies by any amount they choose.
If they can tax a selected group of citizens with impunity, what's to prevent them from taxing tobacco supplies and "roll your own" machines?
The next thing you know, they'll be saying that Newports go great with watermelon; how does the liberal press get away with this blatant stereotyping?
the state of California estimates that it has lost 300 million dollars per year in tobacco revenues since the tax hikes started in 1998.
How can you lose something you never had???
I would think they would be jumping for joy that there has been a $1.2 billion drop in cigarette tax collections - wasn't part of the increase meant as a means to discourage smoking??? If there has been that much of a decrease in tax collections they are apparently achieving their goal.
And if anyone believes that I've got a bridge to sell them!!!!!!
I'll be there!!!!!!
Somebody tell this guy to get a clue! Like taxes and state lotteries aren't preying on the poor?
I guess he and a neighbor have an internet business? I'm not sure. But they dropped thousands of red and white phamplets in New York City advertising about their new cigarette shop they opened up......
I knew the minute 'they' weren't realizing the tax revenue from cigarettes that they would claim "Oh! They must be quitting!" WRONG! hehe
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