3 Out of 5 Cigarettes Sold in State With Highest Cigarette Taxes are Smuggled

The open question here is whether New York is actually making less tax revenue on cigarettes due to its overtaxing of cigarettes. The question might be speculative if it weren’t for a figure like this.

New York has the highest cigarette tax rate of any state, and nearly two-thirds of the state’s cigarette market is illegal, announced the think tank Tax Foundation on Thursday.

his makes New York the biggest importer of black market cigarettes, along with the state’s highest tax rate of $4.35 per pack. That’s compared to Missouri, the state with the lowest rate, of 17 cents per pack.

In New York City the tax rate is even higher, adding another $1.50 per pack to the state rate. It’s not uncommon for smokers to pay $12 for a pack.

The report said that tobacco smuggling and the tax rate have risen practically in tandem since 2006. The New York State tax on cigarettes has risen 190% since that time, as the rate of smuggling increased 170%.

The faster the taxes go up, the more the market turns into the black market. This is a familiar enough phenomenon in Communist countries. Now all this might be economic fun and games, except for the troubling question of who profits from the smuggling.

Large scale cigarette smuggling networks in New York State are dominated by tight knit nationality-based networks, primarily families through blood or marriage of Lebanese, Yemeni, Jordanian and Palestinian descent.

Federal and New York State law enforcement officials estimate that nearly 60 percent of all convenience retail outlets in New York City are now Arab-owned, and with the Arab networks compartmentalized by ethnicity and family ties, the risk of infiltration by law enforcement is minimal.

In total, law enforcement officials in New York State estimate that well-organized cigarette smuggling networks generate between $200,000 – $300,000 per week. A large percentage of the money is believed to be sent back to the Middle East where it directly or indirectly finances groups such as Hezbollah, Hamas and Al Qaeda.

  • http://www.adinakutnicki.com AdinaK

    Want to know who is deep into cigarette smuggling, all over the U.S?

    Hint: they finance their jihad – http://adinakutnicki.com/2012/09/14/hezbollah-bur

    By the bye, the I-95 corridor is a gateway for jihadi activity, of which cigarettes play a huge part. And if one place stands out among the rest, consider North and South Carolina as major hubs. And this Israeli blogger knows this for a fact.

    Adina Kutnicki, Israel – http://adinakutnicki.com/about/

  • Kris

    And if it 's the same group doing the smuggling as was found to be doing the smuggling in Detroit, to be sold in their convenience stores their nationality is middle eastern.

  • κατεργάζομαι

    Sadly, Smokers will die anyway. Why attack them?

    I PAY directly for ETB and Medicaid Card FRAUD.

    More important FRAUD is facts such as ACORN doing what it does best: handing in phony voter registrations and facilitating election fraud that cancel OUR VOTE.

    The long history of ACORN's role in vote fraud and the inexplicable federal funding of this organization are detailed here: http://www.humanevents.com/2007/03/09/acorn-labor

  • Mary Sue

    In Canada, smuggling of cigarettes is a huge problem. Some provinces have higher tobacco taxes, and the ones that do, end up having a problem with cigarettes from lower-tax provinces being smuggled in.

    Each Province's cigarette packages are wrapped in a special clear plastic wrap that has a thin colored strip encircling near the top of the package that indicates the tax has been paid on it (by the vendor). BC's is a light aqua blue. If the cigarettes don't have that, it's smuggled.

  • κατεργάζομαι

    RE: "3 Out of 5 Cigarettes Sold in State With Highest Cigarette Taxes are Smuggled"

    To tens of millions of Americans, the Internal Revenue Service is a source of income, not a dreaded tax collector.

    Though not widely known, the IRS administers "one of the federal government's largest benefit programs for working families and individuals."

    Smoke This Taxpayers: http://www.americanthinker.com/blog/2011/02/irs_w

    By claiming certain "credits," primarily the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit, eligible tax filers receive a check from the IRS even if they have paid no federal income tax during the year. The EITC is a form of negative income tax, the merits of which will not be debated here. EITC is the "largest cash assistance program targeted at low-income families."

  • Edward Cline

    There was, and probably still is, a tobacco store in Newport News, Virginia, that I patronized because of its low-priced cigarettes. It was run by a very friendly Muslim family. The father would wait on customers, and also the wife, a nice-looking woman, with the kids playing in the empty space behind the counter. But it soon dawned on me, because of my readings on the cigarette smuggling racket on the East Coast, that very likely some percentage of the profits of this store would eventually wind up in the Mideast to fund terrorism and jihad. I stopped patronizing the store. Also, the woman over a period of a year grew fatter and fatter, and was essentially unpaid help and also a baby machine. Now I go to WaWa for my brands.

  • PAthena

    Why should cigarettes be taxed at all? As for smuggling – Adam Smith, in the Wealth of Nations, said that the smuggler is a public benefactor.