Tuesday, November 30, 2010

Reduce the Cigarette Tax-and the Crime that Goes With It!

The NY Post has a scathing editorial this morning on the NY State cigarette tax-and recommends, at least until there is some degree of enforcement, that the levy be lowered: "How pathetically predictable: Albany raises taxes on cigarettes to such onerous levels that purchasing them legally becomes all but unaffordable. So what happens? Folks buy them illegally. (Duh.) As reports in The Post last Friday and Saturday show, that's what's happening: underground sales of 7.3 million packs a month."

Stores who are trying to legally sell cigarettes simply cannot in the City of New York-not in a climate of lawlessness: "Legal sales, by contrast, plunged 27 per cent, from 41 million packs a month to 30 million, between June and July -- when Albany jacked up butt taxes to as much as $5.85 a pack in the city. That's far more than the 8 percent to 10 percent dip that the state projected. And it comes with a price: "We see lots of [rip-offs] and violence with drug-trafficking," ATF special agent Ron Turk told The Post. "As volume and money go up, the stakes get higher."

NYS needs to take prompt action-and remove the criminal incentives: "But with tax-free cigs so ubiquitous and so much cheaper, why should smokers be expected to resist them? They buy levy-free packs in lower-tax states, on Indian reservations or at local bodegas. State enforcement agents complain that budget cuts are curtailing their operations, which no doubt they are. But the answer's not restoring the cuts. The answer is bringing cigarette taxes into equilibrium with national norms -- thereby removing the chief incentive for buttleggers and Indian reservations to break the law in the first place."
All of this will soon be place right on new Governor Cuomo's lap-and with wholesalers biting the dust and bodega owners dropping like flies, immediate attention is needed. We are creating an insidious environment for criminality to flourish-and it could be cleansed if Cuomo and the legislature take the action that the Post asks for: "No one has reliably shown that sky-high cig taxes curb tobacco use enough to justify the added crime. Nor are the tax hikes bringing in revenues anywhere close to what was projected, since legal sales have dropped. Meanwhile, the growth of the underground market, and the attendant crime and violence, are reason enough to shut down this ill-begotten exercise in social engineering once and for all. Lawmakers created this mess. They can end it with the stroke of a pen. It's time to do just that."