New York State and City officials have for years been in love with raising revenue on the backs of the long-suffering cigarette smoker. Between the high state taxes, which are about to be increased in the amount of $1.60, and taxes levied by the city itself, the price of a pack of cigarettes in New York City is about to crack the $11 mark. Anyone who knows basic economics knows exactly what this kind of gross distortion of the price of any commodity leads to…a black market. Sure enough, illegal cigarette venders have begun popping up all over the city, offering smokes at heavily discounted prices.
These venders will usually appear late nights in bars and nightclubs, to the delight of buzzed patrons, carrying satchels full of all of the popular brands, from Marlboro to Camel. I witnessed one such vendor confidently walk into a bar on the lower east side this weekend (The Double Down Saloon). Upon inspection of one of his packs, the New York State tax stamp did not appear.
With the coming rise in State taxes, and an economy that’s already hurting, it is inevitable that organized crime will find its way back into the cigarette business here in the city, assuming they aren’t already.
Unfortunately, this rise in illegal cigarette venders will also have the effect of hurting legal brick and mortar establishments that sell packs, as illegal cigarette venders begin to creep in on their share of the tobacco market. In all likelihood, many stores will begin to engage in shady practices to make up the difference. Next time you pick up a pack of cigarettes in New York City, look at the bottom of the package; do you see the New York tax stamp? If not, there’s a good chance that those cigarettes came from an out of state source and bypassed the heavy taxes.
Mayor Bloomberg and the New York State Legislature deserve a round of applause for making crime once again pay in New York City, all for the benefit of Bloomberg’s anti-smoking crusade and New York’s desperate attempt to fill its budget gap. I hope the increased revenue created by the heavy cigarette taxes will cover the cost of the increase in law enforcement that’s going to be necessary.