Newsbrief: NYC Cigarette Tax Hike Leads to Black Market Violence 12/12/03

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Welcome to the drug wars, Mr. Butts. New York City's black market cigarette business turned violent this week, with two people killed and two others shot in separate attacks linked to turf wars over prime sales locations, the New York Post reported Wednesday. The violence comes amidst a surge in cigarette bootlegging since the city increased its cigarette tax from 8 cents per pack to $1.50 per pack in June of last year -- a whopping 1,900% increase.

As a result of the tax increase, cigarette smuggling has gone through the roof.

By purchasing smokes in tobacco-friendly states such as Kentucky and North Carolina, bootlegging entrepreneurs can make a profit of as much as $50 per carton. With profit margins like that, a single van load of Kools or Winstons can be worth tens of thousands of dollars once the smokes are sold on the street corners and bodegas of the city. Such profits are attracting criminal gangs, New York police and federal officials said. Among those mentioned by authorities are Russian mobsters, Chinatown gangs, and Arabs with ties to Hezbollah, a Lebanese militia facilely labeled a "terrorist group."

"You can liken this to narcotics trafficking; there are people who buy in bulk, then break it down and distribute to stores or to street dealers who sell them by the cigarette," said Garry McCarthy, the NYPD's deputy commissioner for operations.

Naturally, the police are ready to confront this new menace. NYPD has created a special unit, the Cigarette Interdiction Group (CIG—get it?) to go after the black market trade. These new Untouchables have so far made 146 arrests, seized six cars, $250,000 in cash, and 30,000 cartons of cigarettes. Those figures do not include the more than one thousand cigarette-related arrests made by patrol cops since the tax took effect last year.

According to Patrick Fleenor, author of "Cigarette Taxes, Black Markets, and Crime: Lessons from New York's 50-Year Losing Battle," efforts to suppress behaviors through excessively punitive taxation always yield such unanticipated yet predictable results. "Since the first state cigarette taxes were imposed in the 1920s, black markets and related criminal activity have plagued high-tax jurisdictions. Such activity has proven to be resistant to law enforcement curtailment efforts," wrote Fleenor. "The negative side effects of high cigarette taxes in New York provide a cautionary tale that high tax rates have serious consequences -- even for such a politically unpopular product as cigarettes."

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Issue #315, 12/12/03 Editorial: Steve Kubby IS a Refugee | Canada Denies Refugee Status to US Medical Marijuana Exile | Fallout Continues in Goose Creek, South Carolina, High School Drug Raid | DRCNet Interview: Darrell Rogers, Acting Executive Director, Students for Sensible Drug Policy | DRCNet Book Review: "A Drug War Carol," by Susan Wells and Scott Bieser (Big Head Press, $5.95) | Newsbrief: Bush Campaign Letter Attacks Drug Reform Funders | Newsbrief: Thai Government to Investigate Itself over Drug War Killings | Newsbrief: Bolivian Government Shifts Away from "Zero Coca" | Newsbrief: New Canadian Prime Minister to Revive Marijuana Decriminalization Bill | Newsbrief: Jamaican Solicitor General Warns Ganja Decrim Could Violate International Treaties, Invite US Retaliation | Newsbrief: Australian Prime Minister Says Injection Room Violates Treaties, UN Says No It Doesn't | Newsbrief: Medical Marijuana Approved by German Court | Newsbrief: West Virginia Supreme Court Grants Private Employers Greater Pre-Employment Drug Test Rights | Newsbrief: NYC Cigarette Tax Hike Leads to Black Market Violence | Newsbrief: Cop Kills Cop in Methamphetamine Raid Gone Awry | DRCNet Temporarily Suspending Our Web-Based Write-to-Congress Service Due to Funding Shortfalls -- Your Help Can Bring It Back -- Keep Contacting Congress in the Meantime | Perry Fund Accepting Applications for 2003-2004 and 2004-2005 School Years, Providing Scholarships for Students Losing Aid Because of Drug Convictions | The Reformer's Calendar
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