Mar
22
2014

Cigarette smuggling business booming in NYC. Of course.

There are days when I wish that classes in Seventeenth and Eighteenth Century European history were mandatory for government officials – wait, no, I always wish that. There are simply days where my desires are given explicit validation by a new report: “More than half of the cigarettes sold in New York State are smuggled in from other places to avoid the Empire State’s taxes on smokes, which have soared nearly 200 percent since 2006, according to a report issued by the conservative Tax Foundation.” And apparently that’s also true for a bunch of other places in at least the Northeast.

Now, the reason for the history: if our erstwhile public servants had ever read any (books that have ‘Peoples’ or ‘Social’ in the title don’t count) they’d know that when you create a situation where a legal good is available in one place for price X, and available in another for price X+Y, with Y being a protective / ruinously high government tariff, something inevitably happens.  And no, that inevitable thing is not smuggling.  Human beings already smuggle as naturally as we breathe. It is practically instinctive for us. No, what inevitably happens in that situation is that the population enthusiastically joins in on breaking the law. And gets remarkably close-mouthed when tax men start nosing around*.

Some people may be dimly aware of this: the CBS report mentioned above said that a spokesman for the prohibitionist American Lung Association is claiming that the original Tax Foundation report was tainted by Big Tobacco money, and that the problem “is a lot smaller than the study lets on.”  CBS, however, doesn’t seem to be buying that, given that it notes that a shipment of knockoff Chinese cigarettes (street value:  $4.5 million) got seized last year in NYC. Unless you assume that this was the only shipment that the Chinese have ever ran in** (HAHAHA!), or that the tax men intercept every chest of tobacco that people try to smuggle in from abroad (HAHAHA!), or that NYC is the only American port where one might get illicit duty-free foreign cigarettes (HAHAHAHAHAHAHAHAHAHA!)… well, I suggest that the ALA crack open more history books.

And that’s just foreign.  Loading up a case of Virginia cigarettes or two in the back of one’s car and driving it to a high-tariff state is a trivially easy exercise.  The trick is in knowing a guy who will take it off of your hands.

Moe Lane (crosspost)

*I once saw the basic Western dichotomy on smuggling perfectly explained in, of all things, a Bond movie. Bond and current-woman-in-tow were investigating this European guy who was reputed to be smuggling drugs.  The guy captured them, and explained to them quite reasonably that while yes, he was a smuggler, he did not smuggle drugs – but he knew the guy who did, and of course he would be happy to go help take that guy out.  And just like that the smuggler joined the ‘good guys’ and became a loveable rogue in the Romantic Scoundrel mode. And that’s because people make at least an unconscious distinction between transporting goods that society has made illegal, and transporting goods without giving local governments their cuts.  And no amount of pounding the table and shouting ever seems sufficient to convince people to stop doing that.

**If you don’t think that the Chinese don’t both appreciate the irony of smuggling an addictive drug into Western ports contra the desires of the local governments, and wish that tobacco was as devastating a drug as, say, opium… well, you haven’t read enough East Asian history.  Because, believe me: the Chinese still hold a grudge over the Opium Wars.

19 Comments

  • Luke says:

    Well, heck.
    There are plenty of Indian reservations in New York. Why go all the way to Virginia and pay their tax, when you can get them much closer to home with no tax at all?
    It doesn’t take many cartons to cover the gas, and being rendered “unclean”, smokers tend to socialize quite a bit with each other in the few spots they’re allowed.
    You couldn’t encourage smuggling more if you deliberately tried.

    • Moe_Lane says:

      I assume that the casinos are being watched by the revenuers.

      • Catseyes says:

        Probably, but the usual Government problems apply you will have someone assigning coverage who is not aware of the local area so while major access ways are covered the back roads are not. I have personally gotten in and out of areas blockaded because of a tornado strike. It truly never ceases to amuse me how unaware Government officials are of what they don’t know.

      • garfieldjl says:

        Reservations wouldn’t necessarily be subject to the restrictions, nor would they necessarily be under the legal jurisdiction so the only thing that could be done would be to watch the border of the reservation for smuggling.

        • Luke says:

          Exactly. The res is independent of the state, and the state has no jurisdiction over it. (This didn’t use to be the case, but in the early 90’s the federal courts drove the point home with a sledgehammer. Which is why you’ve seen so many casinos pop up on indian reservations over the past 2 decades.)
          State revenue officers are not allowed (and are not welcome) on the res.

        • south jersey says:

          Hollywood, FLorida, reservation was selling smokes and booze and gasoline cheap to Floridians long before they turned to casinos. I used to live west of the reservation when it truly was a reservation with chikees and free-ranging horses and the like – and the Seminoles had their several stories high teepee, yes, a teepee even though they supposedly resent being treated like western Indians, to catch your eye as you drove up the highway. come in and save money!

  • Brian Swisher says:

    “Watch the wall, my darlings, as the gentlemen go by.”
    .
    But you knew that already…

  • garfieldjl says:

    I don’t recall which Bond movie you’re referencing (since more than one involved drug smugglers), however it is a classic theme concerning some villains. Where for all of a “villain’s” evil, there are some things they just won’t stoop to.

    Not sure the smuggler in the Bond movie that you are referring to would rank that highly as a villain, but I digress.

    It seems to me that NYC has made their taxes on cigarettes so expensive, that they’ve actually created a black market demand for cigarettes (because it is cheaper to pay the inflated black market prices than to pay the taxes). That is a bone-headed move on their part, but I guess that’s what happens when you have academics with no clue about reality, run things.

  • Catseyes says:

    Not really a black market item Garfield more of a grey market item, it is perfectly legal to sell cigarettes as opposed to say heroin, the only thing that makes it illegal is not having the tax stamp on the pack. That is what makes the enforcement so hard. Added to that is it’s perfectly legal to drive onto a reservation purchase a pack or a case for personal consumption and not pay the tax. You can light up a illegal cigarette in front of a LEO and unless he can see that there is no tax stamp on the pack there is nothing he can do about it.

    • qixlqatl says:

      Just wait. They’ll be conducting random searches for bootleg smokes before the year is out. Fourth amendment? What’s that?

      • south jersey says:

        there’s an urban legend some validity that Pennsylvania, which is on the state store system, has agents in N.J. looking for Pa. plates at Roger Wilco and other booze-superstores. these are radioed in to agents on the pa. side of the bridge to await their return – and no doubt immediate executions. booze may be brought into the commonwealth – BUT it must also leave said commonwealth unopened. if you buy from us, make SURE it’s clearly understand that you’re buying a gift for someone not living in Pennsylvania.

  • Catseyes says:

    They can try Qixqatl but by definition half the people smoking have paid the tax how long do you think they’ll be doing it after some enterprising attorney unveils the first class action lawsuit for illegal searches. Monkey wrenches every where and not a bolt to turn, yet.

  • south jersey says:

    Why is this considered news? THis is standard operating procedure if you live on a borderland of a major metropolitan area. even earlier than that, the Jersey coast was a great place to dodge the revenuers in PHiladelphia. in current times, jersey always sells smokes, booze and gasoline to N.Y. and pa. for a while we sold clothing as well as clothing was either not taxed or taxed less than Pennsylvania.
    in Michigan, every time Michigan raises a cigarette tax business explodes in just over the border ohio and Indiana. in Michigan, much of the population is with one hour of the state line and most of it within 2 hours.
    Michigan also did well when the Canookians installed a value-added sales tax. turned that whole country into a nation of smugglers – and prevented Michigan from going into recession. trashed their home country, however, and crashed the Progressive-Conservative Party for years.
    Delaware’s state industry is selling major appliances to just over the border customers as Delaware does not have a sales tax. 2nd biggest industry is registering PHiladelphia vehicles so they can get cheaper auto insurance. I was on I-295 one work day and thought the whole state of Delaware was traveling with me – all the other cars had Delaware plates.
    and don’t forget prairie Purgatory (Kansas City) selling gasoline to Kansans for significantly cheaper prices.
    bottom line: what works in Hawaii or ALaska or deep in the heart of Texas does not work everywhere particularly with a large population center on a state line. want your state to see major retail growth? Kill the sales tax and the “use tax” and watch those from neighboring states flood in to buy

  • south jersey says:

    Kansas City bans fireworks. tiny suburb of Riverside has TONS of merchants selling stuff – with K.C.P.D. watching for you at the border. now that I am no longer a resident of Prairie Purgatory (“Kansas city”) I outta go back there to tweak some cops. P.P. being such a crime free bastion you know they have the time for silly-axe stuff like that.

    also, forgot to mention that there’s a thriving business in brining smokes up to Michigan from the South. I’ve been tempted to participate myself just to rub Engler-klaus’ face in his tax hikes.

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