The current anti-smoking campaign
not about your health ...
It is all about
YOUR MONEY... They want it!
The big cigarette tax increases many states are imposing
combined with federal taxes to fund the SCHIP program will only make
black-market smokes more profitable and lead to more cigarette smuggling.
People stock up in low-tax states like Virginia and Missouri, truck the
cigarettes north and illegally resell them in high-tax states like Michigan and
New Jersey. Others buy cartons of tax-free smokes on Indian reservations and
sell them elsewhere.
Those pushing to steal more
of your money told us that higher prices for cigarettes would not create a
black market. They tried pointing to the higher prices in Europe has not
created a black market there. Well, all I can say is they just simply don't
know what they're talking about. When I was in Germany years ago, for example,
I found a HUGE black market for both cigarettes and alcohol. In England,
one-half of all cigarettes are sold on the black market. The black market is so
common throughout Europe, American legislators are simply closing their eyes to
the obvious, and lying to the American public about it.
In 1996 the
European parliament warned that organised crime is now involved in large scale
cigarette smuggling. "The FENEX Dutch distributors association estimate that
the EU is losing $US775m in excise taxes from the illicit trade," said a Cape
Business News report. "Typically the cigarettes enter ports like Rotterdam
destined for countries outside the EU and therefore not subject to duties. Once
landed the cigarettes false documentation allows the cigarettes to be
distributed within the EU. Some estimates suggest that up to 20% of EU consumed
cigarettes are contraband.
There is already a lucrative black market
for cigarettes in the United States and after Congress adds its $1.10 plus tax,
the states add their excise taxes, and the tobacco companies add their share to
recover its legal costs, etc., you can expect the price of a pack of cigarettes
to be somewhere around $5 per pack/ $50 per carton. And you don't think there
will be a huge black market?
Since the first state cigarette taxes were
imposed in the 1920s, black markets and related criminal activity have plagued
high-tax jurisdictions. Sen. Dianne Feinstein (D-CA) admitted there is ALREADY
a huge black market for cigarettes in California. It is estimated that nearly
20 percent of the cigarettes sold there are sold on the black market.
New York state is raising its tax $1.25 to $2.75 a pack, the highest in
the nation. New York City charges an additional $1.50, which will bring the
cost of a typical pack of cigarettes here to $9. Consumers are responding by
turning to the city's bustling black market and other low-tax sources of
cigarettes. During the four months following the previous tax hikes, sales of
taxed cigarettes in the city fell by more than 50 percent compared to the same
period the prior year. Over the decades, a series of studies by federal, state,
and city officials has found that high taxes have created a thriving illegal
market for cigarettes in the city. That market has diverted billions of dollars
from legitimate businesses and governments to criminals.
also turned to counterfeiting cigarette tax stamps to disguise packs on the
black market. New York state officials announced recently that they had seized
$6.1 million worth of fake stamps from a Jordanian tobacco distributor.
In 1994, as part of a property tax reform package known as Proposal A, Michigan
boosted the tax on a pack of cigarettes from 25 to 75 cents per pack, creating
a huge gap between the price of cigarettes there and nearby states. Not
surpringsly, this spawned a Michigan blackmarket.
When Canada steadily
increased taxes on cigarettes in the 1980s, a black market sprang up and, at
one point, it was estimated that as many as half of all cigarettes consumed
there were smuggled in. "There are large profits to be made by smugglers,
distributors and retailers," prime minister Jean Chrétien told the
Canadian House of Commons in February, 1994. "In 1993 criminal proceeds from
tobacco smuggling were upwards of $1 billion." As the smuggling became
lucrative, criminal gangs engaged in bloody turf wars to dominate the market.
Eventually, the government was forced to cut taxes to reduce the smuggling and
crime its actions had nurtured. [Source: Perspective, "Up In
Smoke," Investor's Business Daily, July 11, 1997.]
legislators who continue to increase cigarette taxes know this. They can't all
be that stupid. You can bet they know there will be a huge black market and
they know when that happens the American public will cry out to them again to
clean up their streets from all the organized crime they created. They will
eagerly pass more laws to attempt fixing what they broke and of course with it
will come even higher taxes for everyone. It's a sort of socialist spin on 'job