Liberty: -- Issues -- Bootlegging and violence
- Nicotine Fights
By Jacob Sultum
"Increasing the Cigarette tax saves lives," New York Mayor Michael
Bloomberg declared last year while pushing 19-fold increase in the
city's levy. To the contrary, suggests a recent report from the Cato
Institute: Increasing the cigarette tax can be deadly.
In July the combined state and local cigarette tax in New York City
hit $3 a pack, the highest in the country. Patrick Fleenor, former
chief economist at the Tax Foundation, argues that the steep hike is
bound to promote the sort of black market activity that has been
associated with violence in the past.
During die first four months after the tax hike, according to official
figures, cigarette sales in the city fell by 50percent compared to the
same period in 2001. But that doesn't mean New York has half as many
smokers as it did before Bloomberg came to their rescue. The official
figures do not reflect border shopping (which nowadays includes online
sales as well as purchases in other states) or bootlegging.
As Fleenor shows, New York has a long, bloody history of cigarette
bootlegging, with smugglers fighting among themselves, hijacking
trucks, and robbing dealers. "The enormous profits that can be made
smuggling cigarettes into New York have lured smalltime crooks,
mobsters, street gangs, and terrorists into the racket," he writes.
"Those criminals have engaged in a host of violent activities,
including murder, kidnapping, and armed robbery, to earn and protect
their illicit profits .... If history is any guide, the involvement of
several rival groups in large-scale cigarette smuggling operations
that also face competition from small-scale bootleggers creates a very
If you think Fleenor's warnings are overwrought, consider what New
York Gov. Malcolm Wilson said in 9974. "One major incentive to
organized crime." he observed, "is the high New York City cigarette
taxes, piled on top of the state tax, which have made that city the
promised land for cigarette bootleggers." Taking inflation into
account, the tax when Wilson spoke was less than half what it is now.
Source: Reason 5.03
- "I'm not sure which upsets me more: that people are so unwilling to
accept responsibility for their own actions, or that they are so eager
to regulate everyone else's." --Kee Hinckley
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