Posted on 07/13/2002 6:14:09 PM PDT by SheLion
NEW YORK (AP) - As state after deficit-ridden state ratchets up cigarette taxes, authorities are bracing for some unwelcome consequences in the form of more aggressive smuggling and bolder use of the Internet as a tax-evading tobacco shop.
Never before have so many states — 17 this year alone — approved cigarette-tax hikes in such a short time. Anti-smoking advocates call it a win-win situation, enabling states to reduce smoking and budget deficits simultaneously.
In many legislatures, even tax-averse conservatives have supported the increases — expected to generate $2.2 billion annually in new revenue — as budget woes and anti-smoking militancy transform cigarette buyers into America's easiest-to-tax constituency.
With prices as high as $7 a pack in New York City, and more than $4 in many states, some smokers are trying harder than ever to quit. Those unwilling or unable to kick the habit are left with several options — legal, quasi-legal and illegal — for getting a nicotine hit without a tax hit.
Those who choose the illegal route are often successful. The Bureau of Alcohol, Tobacco and Firearms estimates state and federal authorities lose more than $1.5 billion annually in evaded cigarette taxes.
The ATF concentrates on major interstate smuggling — operations involving at least 60,000 cigarettes. The workload has increased steadily in recent years; ATF now has about 150 active cigarette-smuggling cases.
"There's no question some large-scale organized crime gangs are involved," said ATF spokesman John D'Angelo. "Not only are these criminals depriving state and federal governments of tax revenue, they're using their profits for other criminal activity."
The primary sources of smuggled cigarettes are tobacco-growing states with low taxes — for example, Virginia with a lowest-in-the-nation tax of 2 cents per pack, and Kentucky with a 3-cent per pack tax.
In Ohio, where the tax recently rose 31 cents per pack, officials plan to monitor the Kentucky border for smugglers, and police are being trained to check for Ohio tax stamps on packs sold at stores. A carton of name-brand cigarettes in Ohio costs about $40, compared to about $25 in Kentucky.
In Maryland, where the per-pack tax rose to $1 in June, authorities are on alert for more smuggling from Virginia. There were only five arrests in Maryland for cigarette smuggling in 1997, and more than 50 so far this year.
The Internet — which thus far accounts for only a small fraction of cigarette sales — may pose a bigger long-term threat to tax collectors than smuggling. The hefty tax hikes may prompt more smokers to order in bulk from online merchants, who in turn may resist state efforts to collect taxes.
Under federal law, online cigarette vendors are required to report the names and addresses of out-of-state customers, but the law is widely flouted.
"Most vendors aren't turning over their customer list, so the Internet is becoming a hotbed of tax evasion," said Kurt Ribisl, a professor at the University of North Carolina School of Public Health.
Ribisl oversaw a study this year that identified 195 Internet cigarette vendors, up from 88 a year earlier. He said most advertise low-tax cigarettes and indicate they won't report to any authorities.
"We're definitely unprepared right now — we don't have the tools to get the states their proper revenue," he said. "You need federal legislation, because a patchwork approach from individual states is going to bog down."
In Congress, Rep. Martin Meehan, D-Mass., is leading an effort to tighten regulation of Internet cigarette sales. Meehan's chief of staff, Bill McCann, predicted bipartisan legislation would be drafted this year aimed at enforcing existing requirements that Internet merchants block sales to minors and report out-of-state buyers.
Some states already are sending tax bills to smokers who patronized the Internet.
"They've thumbed their noses at us," said Gene Gavin, Connecticut's tax commissioner. "And they're right, because we don't do anything."
One legal complication is that many of the Internet sites are run by American Indians. Sales of cigarettes on Indian reservations are exempt from state and local taxes, and some Indian merchants contend their Internet sales also should be tax-exempt.
Larry Ballagh, a Seneca Indian from upstate New York, sells tax-free cigarettes over the Internet.
"Adults who have been smoking for a number of years, they're not going to quit smoking," he said. "But they will shop around."
Tom Ryan, a spokesman for Philip Morris USA, said the tobacco company supports a crackdown on tax evasion.
"The people really hurt by all this are the retailers who are doing business legitimately." he said. "Jobs are on the line."
John Singleton, a spokesman for R.J. Reynolds Tobacco Co., questioned whether law enforcement agencies — stretched thin by anti-terrorism duties and tight budgets — have the resources to combat cigarette smuggling.
"It's extremely profitable for those willing to break the law to drive to a low-tax state, load up a van, drive to a state with high taxes and sell them out of the back of a truck," he said.
Cigarette taxes can be a reliable revenue source for states if the taxes are "reasonable," Singleton said.
"But with taxes at what a lot of smokers view as an unreasonable level, the states aren't going to get the revenues they're projecting and will find themselves with increasingly hard-to-enforce legal problems," he said.
Eric Lindblom of the Campaign for Tobacco-Free Kids disagreed, saying every state which has raised cigarette taxes has boosted revenues despite reduced smoking and cigarette sales. He said tobacco companies highlight tax-evasion problems in hopes of swaying politicians.
"For someone who gets contributions from the industry, these arguments are used as false crutches to support their opposition to tax increases," he said.
I've been buying these for some time now:
Broncos are made in Columbia, and they're pretty good in my opinion (I used to smoke Camel Filter Kings).
If I order eight cartons, price per carton delivered via UPS Ground comes to $11.05. Lead time is about 7-8 days.
The war on tobacco started back in 1999 when Big Tobacco sold us out with the Attorney Generals. From then on, all hell broke loose.
The smoker then became fair game for bans, control, restrictions and higher taxes.
The MSA created a huge honey pot flowing into the states, and the state governments thought they had lost some rich dead uncle, and went bonkers with this money.
The money was to be spent for health care and for any sick smokers, should there be any. But, instead, the state governments spent it on roads, schools, laptops, pet programs, they went WILD. They are all feeding at the trough like fat pigs!! And they can't get enough.
Also, health coalitions sprang up all over touting “Smoke Free Everything.” And “it’s for the kids.” Maine is even using the tax money to sponsor “5” race care teams in Maine! This is a blatant slap in the face to all who pay cigarette taxes!
What most people don't realize is that Big Tobacco isn't paying for the Settlement Money. The smokers are paying it 100% with their taxes!
The higher they tax cigarettes, the more money they thought they would have coming in to keep "feeding on." Now, the smokers are waking up, because who on earth can afford or who would WANT to pay these high ridiculous taxes on a legal product? Smokers are finding much better and cheaper ways to avoid paying into the state coffers. Now the states are screaming bloody murder. It's their own fault. They have shot the goose that laid the golden egg.
I wonder when they will bring alcohol prohibition back?
U.S. Senators offer bill regulating tobacco by FDA
Co-sponsor Sen. Edward Kennedy denied the intent was to ban smoking. "This legislation is about protecting children," the Massachusetts Democrat told a news conference. "There are Americans who are going to smoke, and we understand that."
Yes, right, Senator! Wait until they start taxing your TWINKIES!
This is very just since tobacco use was invented by the Indians. They should have the exclusive rights for trading it.
Gotcha added. Thanks!!
Gotcha added! Thanks!!
NEVER
The Liquor Industry stood up to Big Government. They have pretty much free rein. Notice how they advertise on TV and all the magazines that "so called kiddies" view?
Nope! Alcohol will keep on flowing. They have a big set and won't be touched. Anyway, how many lawmakers do you think tip that bottle behind closed doors. They sure don't want to shoot THAT goose. heh!
How? I simply "switched" from smoking cigarettes to mini cigars (The kind that come in cigareete-like packs)! It takes a couple of days to get used to the new flavor... but you wind up smoking less...paying less...and are not putting all the "addatives" in your system, so you actually feel better.
I recommend this method without reservation! I can now thumb my nose at the cigarette nazi's without having to play their game! It's amaing the advantages of just removing the "ette" from your cigarette choice!
I didn't cut my cigarettes, but now we roll our own and get a beautiful carton for under $8 dollars. Can't beat that with a STICK!
Well, living this far NORTH with only three months of summer, if we are lucky, I think it would be really hard to grow our own tobacco..........
I should have mentioned that the draw-back to my plan is that I have no desire to smoke cigarettes again. The flavor of the mini-cigars is just too good once you get used to the milder/sweeter flavor.
Well, that's good! And that's your choice. The way it should be for everyone. But states imposing these rediculous taxes on us is not the way to reduce smoking.
We die hard smokers WILL find a way to keep our legal product that we enjoy in our lives.
Like one guy said: "If it's so bad for our health, why don't they just BAN the damn things."
THAT'S a laugh. Too much money being made and lining the pockets of lawmakers and health coalitions.
Smoker's Creed
I smoke because I like to smoke.
I smoke because I want to smoke.
Smoking pleases me.
My life is better because I smoke.
I accept responsibility for all of my actions.
I want the freedom to choose to smoke.
I can choose how to make myself happy.
I own myself.
Smoking is my choice.
Another quick question for you (I'm lining up my ducks), would a place like a stogie shop have the "stuffing" machine?
RS
Or get the pipe. Even cheaper and much better! And a lot of fun.
Recently I was pricing cigarettes in Donetsk, Ukraine. Prices per 'blok' of ten, in Ukrainian Grivny and dollars:
Marlboro Gr 30.90 ($5.94)
Winston Gr 21.90 ($4.21)
Camel Gr 24.00 ($4.62)
Rothman's Gr 47.70 ($9.17)
Three Kings Gr 8.20 ($1.58)
Tu-134 Gr 7.50 ($1.44)
Prima Gr 6.30 ($1.22)
Kozak Gr 4.00 ($0.77)
Belomorkanal (aka BelomorCamel) Gr 3.90 ($0.75)
Not much to do here except smoke, drink, and... er... ;-)
I can't do Vegas either, I'm already planning CPAC. :-)
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