New York Cigarette Tax Stimulates Smuggling Industry

Leave it to New York lawmakers to find a way to stimulate an industry they would prefer just go away. No, I’m not talking about the run on guns leading up to their rushed gun control laws. I’m talking about the highest in the nation cigarette taxes. While the New York economy trudges along, the smuggling business is booming.

 If we can’t lead in freedom, prosperity or employment, we can at least be the capital of piracy. (Cigarette smuggling piracy, that is.)

The Midland, Mich.-based Mackinac Center has released smuggling reports in 2006 and 2009, in addition to its most recent report covering 2011. In 2006, the Mackinac Center estimated that New York had the fifth highest smuggling rate in the country as 35.81%. In 2008, New York’s state excise tax on cigarettes nearly doubled, going from $1.50 to $2.75 per pack. In the Mackinac Center’s 2009 report, New York rose to number two on the list, with a smuggling rate of 47.35%. State excise taxes rose again in 2010, going from $2.75 to the state’s current $4.35. Not surprisingly, the 190% increase in state excise taxes from 2006 through 2011 catapulted New York to its title as the most smuggled state.

But this still leaves a pressing question. Where are all of these smokes coming from? It’s not as if Al Gore’s global warming has suddenly turned New York into a great place to grow tobacco. According to another analysis, the largest (illegal) exporter of cigarettes to the Big Apple was New Hampshire.How could that happen?

Read the whole thing.

Oh, and it isn’t just the smugglers who are doing well. The Indian Tribes have been pretty successful in manufacturing their own cigarettes. But the government raids on their businesses don’t help. They want to crush the tribes just like they’re crushing the roll-your-own smoke shops. Not that there aren’t a few enterprising individuals trying to do something about that.

The moral of the story is, when government goes about trying to the control the behavior of law abiding citizens, it’s usually the criminals who make out like bandits. (Pun intended.)