Monday, August 04, 2008

Ratcheting Up the Pressure on the Black Market

In the NY Post this morning, Mayor Mike and Congressman Peter King collaborate on an Op-Ed that makes a strong case against Indian tax avoiders. And they do so in the context of the MTA's budget short fall: "We're hopeful that the Ravitch commission will develop ideas for innovative and long-term funding streams. In the meantime, here's one idea we hope that state leaders will consider: Start collecting tobacco taxes on the state's Indian reservations - and dedicate a portion of that revenue to the MTA. For years, the state has refused to collect taxes on cigarettes sold to non-residents of Indian reservations - despite a 1994 US Supreme Court ruling that states have the right to collect these taxes."

Here, here! It's about time that top law makers made this a strong push-but they're gonna need some help since spinelessness still rules the state capitol. And kudos to Bloomberg and King for recognizing how much this evasion hurts small businesses, the public health and home land security: "Failure to collect the tax not only hurts public health, it hurts the rest of the state's small businesses, who must sell cigarettes at far higher prices. Worse, there's reason to believe that tobacco smugglers are funneling profits from Indian reservation sales to terrorist organizations overseas. For all of these reasons - public health, economic fairness and national security - it's time to start collecting the tax, which could total an estimated $800 million or more this year, enough to plug the MTA's current deficit."

It's what we've been saying for years, and its past time for the state to act. The Alliance plans to help jump start the political effort in this important policy area.