Daily News Calls Out the Indians-Without Reservation

Three cheers for the editorialists at the NY Daily News for their strong support of the federal court ruling against the black market Indian cigarette retailers on Long Island: "A federal judge has finally ordered the shutdown of Indian tobacco dealers who've been flagrantly dodging hundreds of millions in sales taxes. A big thank you to Federal Judge Carol Amon. And kudos to Mayor Bloomberg's lawyers for providing her with the slam-dunk evidence of mass thievery against the taxpayers."

The mayor does deserve a belated thanks, but along with the caveat-as we have pointed out-that it was his action in raising the tax to a confiscatory level that has opened the black market flood gates in the first place. And the legal effort by the city should have also been accompanied by an aggressive street-level enforcement effort to interdict the wave of illegal sellers who have set up shop on the city's sidewalks.

In addition, it was the initial legal challenge by John Catsimatidis that we believe prompted the Bloombergistas to get involved. And he deserves the kudos here as well. But the News misses a crucial point-and in the process ends up blaming the victims of the buttlegging: "For years, smoke shops based on Long Island's Poospatuck Reservation have been selling millions of untaxed cigarettes to buttleggers who peddle them by the vanload in the streets and bodegas of the city."

The bodegas are the victims of this scam, not co-conspirators. The estimated loss is around $250 million a year-and the rising level of bodega bankruptcies can be at least partially attributed to the loss of a significant revenue stream; a fact that didn't seem to motivate the mayor who seemed to be solely concerned about the lost tax dollars.

The News is, however, right to point its finger at Albany: "Amon's ruling stands in stark contrast to the weak-kneed posture of Albany officials, who have failed to crack down on wholesale tax evasion going on right under their noses. Gov. Paterson has continued the fruitless policy of trying to negotiate with Indian scofflaws. And so Poospatuck merchants have robbed the city and state of $840 million between 2004 and 2008. But, at last, the thievery may be ending."

Let's hope so. With rising budget deficits and struggling mom and pop retailers, New York can ill afford to let the Indian rip-off continue.