Thursday, February 18, 2010

Smoking Out the Fakers and the Faint of Heart

Capitol News has an article on the efforts by Senator Kruger to smoke the governor out on Indian cigarette taxes-and some of the statements from the governor's people indicates to us that they may be suffering from shell shock: "Trying to avoid stoking racial and cultural fires, the Paterson administration has delicately proposed taxing cigarettes sold on Native American reservations to help close the $7 billion deficit. Though the collection process would take at least six months to begin implementing, no revenue from the proposed tax was included in the executive budget. That has led some legislators in favor of the tax to say that the governor is simply blowing smoke when it comes to serious commitment to going through with collection."

Which is precisely the position of General Carl Kruger: "“We do not need to wait months,” fumed State Sen. Carl Kruger at a recent press conference in lower Manhattan. “The budget is void of one dollar of revenue that could be collected from those taxes. And we have a gaping hole.”Kruger was joined by Senate Majority Leader Pedro Espada, as well as State Sens. Joe Addabbo, Jeff Klein and Assembly Members Richard Brodsky and José Rivera."

Not everyone agrees, however, and the statements of the governor's counsel are perplexing to us: "As recently as last October, administration officials were casting doubts over efforts to collect taxes on cigarette sales on Indian reservations. “The governor has been advised the costs of law enforcement would offset whatever gains might be achieved by tax collection,” said Peter Kiernan, Paterson’s chief counsel, in testimony to the Senate last October. “And that is without trying to assess the cost of physical injury or the loss of life or possible property damage.”

But who's giving the advice here? And then there's the following gibberish which underscores the reason why Kruger believes that Paterson is simply playing rope-a-dope: "Administration officials say they are more interested in achieving “price equality” in cigarette prices, which they hope will help nearby non-Indian stores while also encouraging smoking cessation programs. Under such a plan, cigarettes sold by Indians would be set at prices Kiernan said would be “roughly equivalent” to those charged by non-Indian sellers by forcing a minimum price for sales made on reservations. The difference between the actual price and this price floor would then be turned into a revenue stream to fund local economic development project run by the state—though this would not officially be called a tax. Store owners have long complained that customers often choose to buy cigarettes from Indian reservation retailers, where prices are much lower."

Can you imagine Paterson negotiating that kind of deal? It would make the Aqueduct racino look like a kindergarten recess-and Kruger's not buying it for one second: "Kruger argues that enforcing the tax would not require tax collectors to set foot on tribal land since fees would be collected from the stamping agent at the wholesalers before the cigarettes are even shipped to Indian land. Wholesalers who do not affix the stamp to those products would be prosecuted, Kruger vowed.“We will hunt them down, we will find them, we will close them down, and we will arrest them,” he thundered."

And as for the governor's office claiming that the "cost of enforcement" would eat up any tax revenue-“I would definitely call Senator Kruger’s position on this issue overly simplistic,” said Morgan Hook, upstate press secretary for Paterson. “There’s nothing to indicate that the state would collect even a fifth of that amount of money.”-our only response is: "Open up all of your books and records." That would demonstrate for all to see that Paterson is just succumbing to a rioter's veto-and is afraid to enforce the law.

In the end, Paterson's stalling and obfuscation will be revealed as simply one more example of gubernatorial non-feasance.; and the Indian robber barons will have to find other ways to make the easy money. Fleecing the tax payers will have been relegated to alternative venues-of which there are all too many.