As we expected Mayor Bloomberg, undeterred by the legislative turn down of the Governor's cig tax hike proposal, has quietly gotten state law makers to introduce his 50 cent a pack boost to the city's current cigarette levy. As the NY Post reports this morning the increase would raise the price of a pack to $7.50.
As per usual the city is citing the claimed health benefits of the tax hike and, in the process, ignoring evidence from all over the country that declining rates of smoking show no correlation to state tax rates. What is, however, beyond dispute is the effect that the increases have on area store owners. In 2002, the city increase led to a sales loss of over $250 million to local bodegas, newsstands and green grocers.
What is missing is any degree of recognition by the city that the tax has led to drastic business losses and the concomitant increase in cigarette smuggling. The city's enforcement effort has been woeful yet the DCA continues to vigorously monitor legitimate stores ignoring street sales.
Enough already. There should be no cigarette tax hikes until the city and state start to (a) enforce the law against Indian retailers and; (b) start to vigorously interdict the smugglers. IN addition, Bloomberg should immediately join with John Castimatidis in his lawsuit against Indian retailers.