Sunday, November 20, 2005

Cigarettes Kill!

The Times reported yesterday that Angel Jimenez was gunned down in his Bronx apartment. It appears that he was engaged in a small black market business selling cigarettes that he purchased from an online (non-taxed) Indian website.

The death of Jimenez wasn't the first time that buttlegging has ended tragically. In the winter of 2003 two men were killed as a result of a street turf battle in Brooklyn over the sale of smuggled smokes. All of this comes from the 2002 passage of the Bloomberg "bodega" tax that raised the levy from .08/pack to $1.50/pack (an 1800% hike). This created such a wide price disparity that buttlegging has become epidemic.

The only elected official who is doing anything about a situation that is costing NYC's bodegas, delis, green grocers and newsstands $250 million a year is Attorney General Eliot Spitzer. Spitzer has been cracking down on internet sales by going after the common carriers that ship the smokes. This leaves, however, the smugglers in place to continue with their street sales, a common practice in low-income neighborhoods.

The mayor and the police commissioner seem to be oblivious to the problem even though it has been shown that cigarette smuggling has become one of the more common methods terrorists are using to raise revenue. When the law was originally passed, Jose Fernandez of the Bodega Association complained that it would badly damage his stores. The mayor's famous response was, "It's a minor economic issue."

We wonder if the recently released job loss figures have any measure of employment losses in the city's retail sector. Our guess is that the administration's tax and regulatory policies have led to a depressing of neighborhood commerce all over New York City.