There's a wonderful editorial in today's NY Post on the way in which New York City and State have put a stake through the heart of small business through its craven refusal to enforce the cigarette tax laws. And this pusillanimous behavior has cost the tax payers big time: "Rather more substantial figures from the state Tax Department show that during Mike's incumbency, sales of fully taxed cigarettes in New York City have dropped from more than 350 million packs a year to roughly 150 million - a 57 percent plunge. Yet the city smoking rate has dropped fewer than five percentage points in the same period. So where are Gotham's million-plus remaining smokers getting the goods? The black market, maybe?"
And where do all of these bootlegged smokes come from? From Indian retailers who former Governor Spitzer pledged to crack down on before he got so badly distracted: "And it just so happens that New York's tobacco smugglers have the perfect source for their product. The state for years has refused to collect taxes on the more than 300 million packs of cigarettes a year coming off of New York's Indian reservations - which smugglers affix with phony tax stamps and sell to retailers at massive profit,"
All of this is costing NYC bodegas and newsstands over $250 million a year in lost revenues-something that Mike Bloomberg, that champion of the cause of the little guy, called a "minor economic issue." As the Post says, the responsibility hear lies with the governor and the mayor: "Ultimate responsibility, of course, rests on the three governors - Pataki, Spitzer and Paterson - who've refused to lift a finger to crack down on Indian tax evasion. But Mike bears blame, too. He should 'fess up, and work to mitigate it." Let's hope they're up to the task.