Just exactly what is it that makes them so bloody stupid?
Those Cigarette Taxes Are Sure Working Out, Eh?
by Jazz Shaw
posted at 2:31 pm on December 15, 2012
Taking a break from the firestorm of sad news this weekend, let’s circle back and see how things are going in the states which have chosen to sin tax their way back to prosperity. First, my own home stomping grounds of New York, which has been seeking a way to stave off total fiscal collapse by jacking up one of the highest tobacco tax rates in the nation. How’s that working out for ya?
ALBANY – Chronic cigarette-tax evasion continues to cost New York State at least $1.7 billion a year in tax revenue and 6,700 jobs, according to a new report from the New York Association of Convenience Stores (NYACS).
Commissioned by NYACS, the economic study by John Dunham & Associates determined that in 2011, one of every two packs of cigarettes consumed in New York State escapes collection of New York State taxes. “This is further proof that New York, which has the highest cigarette excise tax in the nation, continues to suffer the corrosive economic and fiscal effects of the worst cigarette tax evasion in the nation,” said NYACS President James Calvin in a press release.
Their study finds that nearly half of the packs of smokes purchased in New York were “from other states, Indian reservations, duty-free shops, and military bases.” And that doesn’t take into account the number of smokers who are choosing to do their shopping with black market bootleggers who are increasingly prevalent in sections of the state which are further from the border. This has led to the “unexpected” result of more police resources being diverted to enforcement efforts, more people winding up in jail and more small businesses being swept up in the wreckage and disarray. In short, rather than soaking up more cash with this tax, New York is actually losing money on the deal. Who could possibly have predicted that?
But that’s just New York. We’re kind of weird out here anyway, right? So maybe this case is just an outlier. I’m sure things are working out much better in Chicago, where Illinois is quickly moving to catch New York in the smoke tax category. The money surely must be rolling in by now.