Friday, March 31, 2006

Butts for Terror

When Gristedes filed its lawsuit against the Indian retailers one of the complaints was that untaxed smokes is a source of terrorist financing. In response to the complaint, the tribal spokespeople took great umbrage over the terrorism link even though the point that was made was that the differential between untaxed and taxed cigarettes, and not the direct intention of the tribes, provided the opportunity for the financing of terrorist activity.

Now we have another confirmation of this point and a further indication that the tribes were protesting too much. In today's Daily Star, the largest English language paper in the Middle East, there is an article about 19 people who are charged in connection with a scheme to fund the terrorist group Hizbullah. Here is the money quote:
"The indictment charges that the group would obtain low-taxed or untaxed cigarettes in North Carolina and the Cattaraugus Indian Reservation in New York and bring them into Michigan and the state of New York for the purpose of evading tens of millions in state cigarette taxes."
As the story goes on to report, "The enterprise obtained large profits by reselling the cigarettes at market prices in Michigan and New York." Just as we have been arguing till we're blue in the face. Not only do these tax disparities hurt local businesses they also threaten our country's security.