"They were willing to trade cocaine for cigarettes"

The Wall Street Journal reports that cash-strapped states are beginning to crack down on cigarette smuggling, a practice that basically involves legally purchasing cigarettes in a low-tax state, then reselling them tax-free in places like New York, where smokers pay $4.25 in taxes per pack. So how's that working out for our elected officials? The Journal says it's costing taxpayers big time:

In one recent case, an undercover investigation by the New York State Department of Taxation and Finance led to the arrests of 18 residents of Nassau and Queens counties. Investigators from the tax department posed as cigarette bootleggers and sold illegal, untaxed cigarettes to a network of store owners, including two 7-Eleven operators. The operation cost state and local governments $2.1 million in uncollected taxes.

A similar incident took place in Fairfax, Virginia when police arrested two men accused of attempting to distribute cocaine. The suspects were caught trying to exchange one kilogram of cocaine with an undercover agent for 3,000 packs of cigarettes. "They were willing to trade cocaine for cigarettes," Edgar Domenech, head of the Bureau of Alcohol, Tobacco, Firearms and Explosives, told the Journal.

What we have here is a classic lose-lose situation. Levying high taxes on a popular commodity like cigarettes creates not only a black market, it also turns otherwise innocent people—who are just trying to circumvent an oppressive and confusing tax system—into criminals. Furthermore, cracking down on these criminals involves a whole slew of other resources (courts, police, etc.) that drain government funds.

Increasing taxes on cigarettes has become a popular option for states in the struggling economy, but doing so won't be the answer to budget woes. Indeed, with smokers in some states apparently valuing cigarettes more than cocaine, I'm guessing the smugglers aren't going anywhere—except maybe jail, that is.

Reason coverage of cigarette smuggling in 1995 here.

Comments

[Stephen Smith]

That must've been some really shitty cocaine. I can't imagine a pack of black market cigs is worth more than $5, which means that they tried to buy a kilo of coke for $15,000. That comes out to $15/gram, whereas the going price for a gram of pure cocaine is about $100. Granted, retail purchases of cocaine rarely come to a gram and are rarely more than 50% pure, but still, they should've known the deal was rotten if the buyer actually thought he was going to get a kilo of coke for $15,000.

[smartass sob]

Next thing you know, they'll be fining people for rolling their own. Then they'll go after the poor bums who pick a butt up off the street.

[IceTrey]

"I'm guessing the smugglers aren't going anywhere-except maybe jail, that is."

Which costs the taxpayers tens of thousands of dollars more a year to keep them incarcerated. Of course, as soon as one is arrested another one takes his place.

[Silentz]

The entrepreneurial spirit lives on!!

[brotherben]

smartass sob, I was rolling my own. A can of ZigZag tobacco, complete with papers,would last me a month and was $10.69. The price after the latest federal tax increase is $21.95. Now I use an electric cigarette. No tax and I use about $15.00 of liquid per month.

[brotherben]

I will admit, my first thought when I read the headline was:

where?

[Mike Farmer]

It's going to wind up costing taxpayers a fortune to pay for government trying to stop something it started. It seems this has happened once or twice before.

[R C Dean]

Now I use an electric cigarette.

So that's what the kids are calling it these days. Me likee.

[J sub D]

Indeed, with smokers in some states apparently valuing cigarettes more than cocaine, I'm guessing the smugglers aren't going anywhere-except maybe jail, that is.

Only the ones that get caught. If you live close to the Ohio border, you don't buy your smokes in Michigan. You'd be a fool to as there are no border checkpoints. I'm sure this takes place all over the country sans organized crime.

[ChicagoTom]

Now I use an electric cigarette. No tax and I use about $15.00 of liquid per month.

And lots of flavors that kids might enjoy are available for the E-cig as well.

I have to say, I've tried the E-Cigs, and I think they are pretty awesome. They require a bit of maintenance but it's totally worth it.

[James Ard]

Come on, Ben and Tom, the little thrill you get from nicotine is nothing compared to the smug pomposity you get when you quit. Everytime I hear about the great revenues additional taxes will garner, I say not so fast. Actually, I'll smoke a cig if I can get my daughter to give me one.

[Paul]

And the Drug War continues...

[James Ard]

I'm not sure because I heard it from Rush Limbaugh, but when the recently deceased oldest man on earth was asked how he did it he claimed it was the cigarettes, whisky and wild women.

[Agammamon]

Ya know, this lawmaking thing would be easier if all these people just did what they're told.

[ev]

I was a light smoker for 4-5 years. When you get on the cocaine, cigs are kind of a necessity.

I used to roll my own manually with filters. It was just so economical----also, the act of rolling the smoke was so much fun. You get to control how big it's gonna be, etc. It's a fun ritual. A pouch of Top/Bugler (yeah, I know they're both gross)cost $1.81 here in Bloomington. It lasted about a week, around 30 smokes. Literally overnight, taxes brought the price up to $4.27.

I got taxed out of being able to afford to smoke. I'm still bitter. I told people at work that cig smuggling would start to become a "problem." I've got some more ammo to throw at 'em now.

[Fellcolor]

E-cigs are definitely a bit fussy, but it's worth it. I just got a shipment from ruyandirect today with a bunch of goodies, including a pocket charging case and a newish model (DSE8084) that's the size of a regular cig, and is showing signs of being a solid e-cig.

[fishfry]

As numerous studies have shown, nicotine is actually much more addictive than cocaine.

[brotherben]

Fellcolor, my brother just turned me on to a site where I can get 30ml of the liquid for 15 bucks. Cheapest I've seen so far.

addictionejuice.com

[Michael Ejercito]

Only the ones that get caught. If you live close to the Ohio border, you don't buy your smokes in Michigan. You'd be a fool to as there are no border checkpoints.

For now.

[Tulpa]

Levying high taxes on a popular commodity like cigarettes creates not only a black market, it also turns otherwise innocent people-who are just trying to circumvent an oppressive and confusing tax system-into criminals.

This particular bust had nothing to do with confusion. You'd have to be born yesterday to think that the cig buyers in this case didn't know that buying cartons of cigarettes from a strange guy on the street was illegal.

I could see people not realizing that buying cigs in low-tax states or reservations and then bringing them back was illegal. But this is another matter.

If you live close to the Ohio border, you don't buy your smokes in Michigan. You'd be a fool to as there are no border checkpoints. I'm sure this takes place all over the country sans organized crime.

I'm not sure. NYS has a nifty fireworks law enforcement mechanism: a plainclothes cop parks at a fireworks store just across the border in PA and sends the LP# of any New York plates to a trooper parked at the toll plaza at the entrance to the Thruway, just across the NY border. If any of those cars enter NY via the Thruway, the trooper pulls them over after they stop at the toll booth -- and they are seriously fucked.

[The Bearded Hobbit]

As numerous studies have shown, nicotine is actually much more addictive than cocaine.

I recall an interview in Playboy with Kevin Zeese, then head (okay, okay) of NORML. Paraphrased it said something like, "after NORML comes NORCL". This is just after a Federal Judge made a statement like, "there's nothing wrong with this stuff (re: cocaine)". Seems like all of this happened late 70's-early 80's for those more computer literate than I.

.. Hobbit

[smartass sob]

smartass sob, I was rolling my own.

Yeah, I rolled my own, too, for many years before I finally gave up tobaco years ago. In fact, I got so I could roll them in my fingers to look as good as store-bought - not one of those twisted-end joints either. I could even do it in the dark. As expensive as it has become these days and with the hassle from the anti-smoking nazis, I'm glad I was able to quit.

An acquaintence of mine rolls his own and is looking into growing his own leaf. Seems like alot of work unless one uses a pipe to smoke it. Not all leaves on the plant are suitable for cigarettes, but they can all be smoked in a pipe.

[Uncle B]

Quit Smoking! Cut down on meat! non-smokers and vegans get less cancer, pay less tax and don't have to work so hard to survive! Avoid prescription drugs and any addictive substances at all costs! Don't burn gasoline if possible! Taxes are for suckers to pay in these times. I smoked 1 1/2 packs a day for 23 years,(quite a chunk of cash) then after 6 months of hell, declared myself smoke free, have gained weight, and never felt better, but: It takes severe self-discipline, a couple of re-tries and a lot of courage. By trying seriously to quit, you will realize just how deeply "The Man" owns your ass!

[R C Dean]

An acquaintence of mine rolls his own and is looking into growing his own leaf.

Growing tobacco isn't very hard. Curing tobacco so that it actually smokes well and tastes good is a bitch.

I grew a couple of tobacco plants one year as a lark. What I wound up with was barely smokable (in a pipe), but was apparently about 98% nicotine. Holy crap, was it strong.

[tony- electronic cigarette]

An electronic cigarette vaping is the best smoking alternative device which is safe to use!

[cell phone locator]

I don't think it will come to that point that cocaine will be traded for a cigarette, the price alone has very large gap and cocaine is illegal

[Internet Marketing Chicago]

I'm not sure this is very accurate!

[rt job illinois]

who would in the right mind trade cocaine for a cigarette?

[Dog Walking]

who in the right mind would trade a cocaine for a cigarette?

[Dog Walker]

i don't think this is even possible? maybe too much exaggeration?

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[cell phone spyware]

i don't think there's any truth to this story!!

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