Friday, February 24, 2006

Spitzer Attacks Governor's Refusal to Enforce the Law

As the NY Post is reporting today the state Department of Taxation and Finance, under the direction of Governor Pataki, "defiantly has said that it will not enforce a new law requiring Indian tribes to pay tax on the sale of cigarettes to non-Indians..." The law is scheduled to take effect on March the 1st next week.

This refusal has elicited a stinging rebuke from Attorney General Eliot Spitzer who said that "the department will be breaking the law and costing taxpayers millions..." All of this is, as we have commented, a remarkable display of arrogance on the part of the executive branch. It now appears that our conservative, law-and-order governor is deciding which laws he feels he should enforce, clearly a recipe for anarchy.

Even more so considering the history of this controversy and the outbreaks of violence in the 1990s when Indians were protesting the state's moves to enforce these tax laws. As State Senator Raymond Meir of Utica, NY, told the AP yesterday, "This is a dangerous precedent...It's an invitation to anarchy."

Tax Commissioner Eristoff continues to waffle here and says "he'll wait and see if the legislature agrees with Gov. Pataki to again delay enforcement by a year-a delay that the Democrat-led Assembly already rejects." Or, as Assemblyman Pete Grannis says, "No one is considering it seriously."

The report goes on to speculate that, "The next tier of action after Wednesday could be lawsuits, by non-Indian retailers against the state or by the state Attorney General's office against wholesalers, but either course would be lengthy." What's left is the possibility of direct legal action against the Indians themselves. These are the folks who are willfully failing to comply with requisite state and federal law and are misleadingly advertising that their cigarettes are "tax free."

All of which makes it even more compelling for the city and state to refrain from imposing any new taxes on cigarettes until this issue is resolved. The greater the disparity between legal outlets and those that are avoiding the tax the larger the black market that is created. The money quote comes from Eliot Spitzer:

Come Wednesday, state government will be breaking the law and begin costing taxpayers millions of dollars by choosing not to enforce legislation that would end the huge sales advantage that Indian tribes have over taxpaying competitors off reservations.