Thursday, April 01, 2010

Indian Cigarette Smuggling's Little Big Horn

In an expected but appreciated move, President Obama signed the bill that will restrict Indian cigarette tax evaders from shipping contraband through the USPS. As the Buffalo News reports: "President Obama on Wednesday signed legislation that bans the U.S. Postal Service from shipping cigarettes — a measure that's expected to cripple the mail-order tobacco businesses run by members of the Seneca Nation of Indians."

The paper, however, failed to mention that this is one more significant nail in the coffin of a criminal tax evasion conspiracy that is depriving NY State of around $1.6 billion a year in tax revenue. The law has a number of strong and welcome measures: "In addition to banning the mailing of cigarettes, the Prevent All Cigarette Trafficking (PACT) Act requires those selling cigarettes on the Internet to:

• Pay all federal, state, local or tribal tobacco taxes and affix tax stamps before delivering any tobacco products to any customer.
• Register with the state where they are based and make periodic reports to state tax-collection officials.
• Check the age and ID of customers when they purchase tobacco and when the tobacco products are delivered."

These provisions will strengthen NY's own efforts to cut off the smuggling spigot-and will further strengthen the ant-smoking campaigns at the same time: "Enactment of this legislation is a milestone in the fight to keep kids from smoking and prevent tax evasion that costs taxpayers billions each year," said Matthew L. Myers, president of the Campaign for Tobacco-Free Kids."

But the best evidence that the law will cripple tax evasion comes directly from the horse's mouth: "The Seneca Nation has long contended that the bill would devastate the tax-free mail-order cigarette business that provided a bargain to a growing number of smokers while making some Senecas rich. For months, the Senecas had said their cigarette industry employed 1,000 people, but in recent statements, the tribe — without explanation — boosted that figure to 3,000. "We have at least 90 days from the signing before the postal delivery ban goes into effect, so we'll all be looking at ways to adapt and save as many jobs as possible," said J.C. Seneca, a tribal councillor and co-chairman of the Seneca Nation's Foreign Relations Committee."

And the Indians continue to try to propagate the myth that these kinds of legislative actions are somehow violative of their treaty rights. Here's a post from one of their web sites: "Handing big tobacco corporations a huge victory, the U.S. Senate has passed the Prevent All Cigarette Trafficking Act - an act tribal leaders say is an attack on tribal sovereignty and economies that will devastate Indian tobacco businesses across the country."

So kudos to Congressman Weiner and Senator Herb Kohl-and to our own State Senators Kruger and Klein who continue to wage the righteous local battle to close off the final loopholes that are stymieing the state's efforts to bridge the massive state budget gap by collecting legitimately owed taxes. It's a good day for not only tax payers, but for the legitimate wholesalers and retailers who have been systematically victimized by an outrageous criminal conspiracy.