Wednesday, June 04, 2008

Law and Disorder

The new cigarette tax went into effect yesterday, and the impact on local stores will be significant. AS the NY Times reports: "Shahid Akhter, who opened the Amazing Store and Smoke Shop on Columbus Avenue on the Upper West Side a month ago, said that past increases caused business to drop slightly, but that crossing the $8 threshold — especially as the cost of everything from oil to eggs continued to rise — was likely to have a bigger effect."

The store owner went on to tell the Times: "“I am very unhappy about this, boss,” he said. “People come in and say they are going to import them or get them in the Bronx from people selling them out of the back of their cars.” He said he made roughly half his profit from cigarettes. Looking at the magazines on his rack, he joked that maybe he would have to sell more pornography to make up the difference."

In a joint press conference yesterday our two health commissioners talked about the cost of treating smokers, a misleading observation if you examine the actuarial tables and see the extent to which shorter life spans and increased tax payments make smoking a gruesome bargain for the government.

And as we told Eyewitness News, the tax increase will be a smuggler's goldmine; with the state losing over 1billion dollars a year in lost tax revenue. Not to mention the fact that city retailers are losing $250 million every year to smugglers and the Internet. If anyone wants to see a textbook case of how taxes drive business away they should take a peak at all of the cigarette sales on Indian reservations and New York City street corners,

This was admitted by State Health Commissioner Daines: "Dr. Richard F. Daines, the state health commissioner, acknowledged at the news conference that many people might seek to evade the taxes by buying their cigarettes online or bringing them in from other states, but he said he still expected the price increase to reduce smoking significantly." Yet nowhere do we see any call for increased enforcement of the Indian tax evasion.

It's getting so bad that only the state and the criminals can make any money on the sale of tobacco products. "With the $1.25 increase in state taxes that took effect Tuesday, New York City now has the most heavily taxed cigarettes in the nation. The price of each pack includes $4.25 in taxes, $2.75 of which goes to the state, $1.50 to City Hall." When will the state get the brass to crack down?