Tuesday, March 21, 2006

Tax Deferred Indian Exemption

The Indian cigarette tax issue is now beginning to become a major issue up in Albany. The Attorney General and the Governor appear about to lock horns over the issue and the lawsuit filed yesterday by Gristedes (with a follow-up story in today's Newsday) will undoubtedly put pressure on the state to take the appropriate action.

The pressure will continue to build as the media attention focuses on the unfairness of the so-called Indian exemption. In today's NY Post the paper editorializes against this "foolish policy" that is costing the state and city-along with thousands of legitimate retailers-millions of dollars a year.

As the Post points out, "You can't blame the company for suing...After all, if it has to pay the taxes, then why shouldn't its competition-the stores and internet retailers on Indian reservations-also pay?

In addition the Post also points out the false correlation between higher cigarette levies and the decline in youth smoking As the paper says, "But data from the Centers for Disease Control suggest otherwise. Even Mayor Mike, in crediting cigarette-tax hikes with lower rates of smoking among kids, admitted that lighting up also fell before the hikes took effect."

Finally, the Post goes after the governor for discriminating "in favor of the tribes" and suggests that "If Albany won't make the tribes pay, it shouldn't make anyone else pay, either." Pataki, however, still feels entitled to flout the law.

As the NY Times reports this morning the Tax Department spokesman is saying, "Our goal has always been to solve this matter through cooperation instead of confrontation.." What balderdash! Someone should seriously investigate the money trail on all of this. It has a distinct Abramoff flavor to it and our suspicion is that the hoo hah over Indian violence is a true smoke screen to cover up the real source of the reluctance to enforce.