Cigarettes

Bay State Officials Want To Emulate the Drug War to Collect Cigarette Taxes

Harsh tactics may have failed to stamp out the trade in heroin and cocaine, but they'll totally work against tobacco smugglers.

|

Alexandra Xubersnak via RemodelHackers / CC BY
Alexandra Xubersnak via RemodelHackers / CC BY

Massachusetts has a problem with cigarette smuggling—a problem, that is, from the point of view of tax collectors and government regulators. State officials have hiked tobacco taxes so high in pursuit of the twin not-so-compatible goals of enhancing revenue while also discouraging smoking that people are buying their smokes on the black market, smuggled in from low-tax jurisdictions or overseas.

In response, the state established the Illegal Tobacco Task Force, to crack down on those subjects who refuse to be passively milked or else give up on their vice. That unholy committee of cops and revenooers has come up with a plan for victory in pursuit of its "mission to confront and combat the illegal tobacco trade in Massachusetts": import personnel and tactics from the war on drugs.

Because we all definitely look to drug prohibition as a model for success, right? Well, not all of us—a lot of police, health professionals, and prosecutors are having doubts. More on that later.

In its initial report, released two weeks ago, the task force complains: "Several recent studies have indicated that approximately 11.9%-12.7% of all cigarette packs sold in the metro Boston area failed to bear a valid Massachusetts tax stamp. Another study using different methodologies and testing techniques estimates the size of the illegal cigarette market in Massachusetts at 15.53%."

Just as concerning for officials, smuggling has bled over into the growing market for "other tobacco products" including cigars and chewing tobacco, though the scope of the illegal trade is harder to measure.

This is a serious problem, we're told, because "cigarette smuggling costs the Commonwealth millions of dollars in lost revenue year over year."

Unsurprisingly, black market goods are brought in from states where tobacco is taxed at a lower rate—which is to say, almost anyplace else.

Actually, the Task Force—a collaboration between the Department of Revenue and the State Police—may be underestimating the amount of cash slipping through its fingers. The Mackinac Center for Public Policy, the go-to authority on American cigarette smuggling, tracks this sort of trade across the entire country. Its latest estimates, released in 2014, did indeed put smuggled cigarettes at 12.71 percent of the market. But that was before Massachusetts hiked the tax by $1.00 per pack to $3.51. A 2013 study also produced before the tax hike found that nearly 40 percent of discarded cigarette packages in Boston bore out-of-state tax stamps.

And why not bring them in from elsewhere when cigarettes are taxed at $1.78 per pack in New Hampshire, $1.60 per pack in Pennsylvania, and $0.30 per pack in Virginia? That's quite a savings.

As for those other tobacco products, smokeless tobacco is taxed at a rate of 210 percent of wholesale cost, while cigars and smoking tobacco are taxed at 40 percent of wholesale cost. Pennsylvania doesn't tax such products at all.

Smuggling may be a problem for tax-hungry state officials, but it's just good sense for Massachusetts residents trying to enjoy the pleasures of life. Understandably, that high tax differential creates a lot of space for underground entrepreneurs to profit by keeping those pleasures affordable.

"[O]nce taxes get far enough out of whack among states, basic economic incentives almost guarantee a thriving black market—and, eventually, an arms race between enforcement and motivated cigarette traffickers," the Boston Globe noted in a 2014 article on the illicit trade.

In the seemingly inevitable way of governments everywhere, Massachusetts officials appear to have embraced that arms race rather than consider de-escalation of any sort. In particular, they point with envy to enhanced penalties and enforcement powers in Rhode Island that, among other things, "expanded investigators' authority to search the premises of tobacco dealers and suppliers at all levels of the supply chain."

Hmmm… Draconian punishment and weakened search and seizure protections. What could the Task Force be getting at here?

Oh wait, here it is: representatives of Connecticut and New York law enforcement invited to advise their Bay State neighbors "noted the close similarities between narcotics investigations and illegal tobacco investigations. As a result, they suggested trying to find experienced narcotics investigators (often former police officers) to be part of any tobacco investigations team."

It's not only personnel. Smoke-tax enforcers advising the task force also recommended increased surveillance, use of paid informants, and undercover operations in order to target the black market created by high state tobacco taxes.

In other words, enforcement of taxes on cigarettes and other tobacco products should look increasingly like decades-old efforts behind laws against marijuana, cocaine, heroin, methamphetamine and the like—prohibition efforts that have brought ever-growing demands for more law enforcement power and resources because, like efforts to stamp out cigarette smuggling, they haven't worked.

"The war on drugs has been a tremendous failure," Houston Police Chief Charles McClelland admitted in October of last year at the launch of Law Enforcement Leaders to Reduce Crime and Incarceration, an effort in which he's joined by New York City Police Commissioner William Bratton, Los Angeles Police Chief Charles Beck, and Washington, D.C. Police Chief Cathy Lanier, among other criminal justice system veterans. They want to dial back harsh criminalization and lengthy sentences that have filled prisons with nonviolent offenders. They echo the call of the former cops and prosecutors of Law Enforcement Against Prohibition who have made similar—and stronger—arguments for years.

Likewise, the World Health Organization considers prohibitionist policies counterproductive and now urges that "Countries should work toward developing policies and laws that decriminalize injection and other use of drugs and, thereby, reduce incarceration" and ease access to health care. WHO also favors decriminalizing sex work and homosexuality for the same reasons.

Health professionals, police chiefs, and prosecuting attorneys now say that the surveillance tools, intrusive investigations, criminalization, and brutal penalties accumulated over decades of drug prohibition have been terrible and damaging mistakes.

But tobacco regulators in Massachusetts and elsewhere seem to think that they'll be brilliant additions to efforts to squeeze people for taxes on their smokes.

NEXT: Trump, Clinton, and the future of the courts - a reply to John McGinnis [updated with a response to James Taranto]

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. The drug war is indeed an incredible failure, but it’s also incredibly profitable. If they can get drug war tactics, especially asset forfeiture, to work in a cigarette context? They’re going to go for it. To hell with the consequences. I mean, who cares if it results in a few more Eric Garners. Can’t make a big money omelette without cracking a few eggs, can you?

    1. They should go after vaping next… oh, wait. The FDA already is. Thank you big government for saving me from choices.

    2. Start working at home with Google! It’s by-far the best job I’ve had. Last Wednesday I got a brand new BMW since getting a check for $6474 this – 4 weeks past. I began this 8-months ago and immediately was bringing home at least $77 per hour. I work through this link, go to tech tab for work detail.
      >>>>>> http://www.realcash44.com

  2. this is the least stupid thing mass has done for a while

    1. Low bar, huh?

      1. you can say that again

    2. Low bar, huh?

      1. Squirrelz do the limbo too.

  3. How long will it take them to ramp it up to the point where non-Mass smokers just passing through the state with a half-empty pack of Marlboros on the dash have their cars seized and their children taken by Social Services?

    Jackboots are gonna jackboot.

    1. No one needs to carry two packs of smokes.

      1. “One’s for the *kid*! I mean, OH NOOOOOOOOOOOOOO!”

      2. God forbid you have a cold at the same time. That half-used bubble pack of sudafed next to your smokes might just provide the nexus for a major narco-trafficking bust that leads to a 50 year mandatory minimum.

    2. I’m sure they will have plenty to keep them busy stopping all the locals on the way back from all the beer and smokes stores just over the NH border.

      1. I make sure that when I buy low-tax liquor I do it on my way into NH, not on the way home. I figure that they’ll have the guys radioing in license plate numbers at the outbound stores, not the inbound. I could be wrong, but I haven’t been caught yet.

        1. I do the same. The other nice thing is NH prints all of its liquor prices online so you can see what is on sale before you go.

        2. I know Mass. does that. I’m sure Maine probably does too.

          1. I know Maine Troopers do that from time to time, especially around summer holidays. Though I always suspected they camp out at the store on I95 North. I figure I’m safe if I avoid that store and go to the one while I’m traveling south, go to the one in Seabrook (after buying cheap fireworks of course), or deal with that stupid roundabout in Portsmouth. I would think covering all those stores would be kinda hard, while just the one would be easy. These are government employees after all. I never expect them to do anything hard.

      2. that place rules. a buddy and I broke down a little ways south of there and we got the tow truck driver to make a pit stop there. im really surprised it hasn’t been shut down yet.

  4. The police State has its advantages. For police.

  5. I was under the impression that RomneyCare would curb the need for this sort of thing… HA!

    I am also surprised that ObamneyCare hasn’t tackled this at a national level, since the *ONLY* discrete health question is, “Do you have a history of smoking?”

    Oh, BTW Suthenboy, this:

    How long will it take them to ramp it up to the point where non-Mass smokers just passing through the state with a half-empty pack of Marlboros on the dash have their cars seized and their children taken by Social Services?

    Will get you, at the very least, a sizeable fine in most EU countries (some require parenting re-education). Be assured, at the local level and state level, it’s coming. I’m truly shocked it never made it into the ObamneyCare legislation specifically.

    1. Have Europeans gone limp?

      1. When the best they can do is chase cigarette smokers, yet they best they can do against Islamo-Mohammedan pervs is put up, “*NO TOUCH*” signage in Arabic, yeah, the incredible flaccidity and tumescence is a sight to behold.

        Even my wife almost refused my proposal because I am a former cigarette smoker (we read each other’s medical records before we got married); fortunately, I won her over.

        1. “Even my wife almost refused my proposal because I am a former cigarette smoker (we read each other’s medical records before we got married); fortunately, I won her over”

          Wow! I have never heard of that happening!! Did she not know you were a former smoker before you popped the question?

          1. No, I had quit for a few years, and didn’t mention it to her (I knew it was going to come up later). She was most upset to learn of it, since both she and I are physicians, and she figured I knew better.

            The only person she lets slide is her father, and if you met him, you would understand why no one fucks with him (even at his age, he can kick Warty’s ass, if not give him an even draw fight at a minimum).

    2. It’s kind of remarkable how quickly Europe has gone down the anti-smoking road. Wasn’t that long ago that you could pretty much smoke anywhere.

      1. In most European countries, the health departments can unilaterally enact whatever smoking bans or taxes they want without putting them to a vote.

        1. True, this is precisely what UKR did WRT public spaces; Russia is even worse now, and the major cities are extremely intolerant of most public smoking, from what I understand.

          Police, of course, are quite enthusiastic about enforcing these laws and picking low hanging fruit…

          1. Greece banned smoking in public places a few years back and it is widely ignored. The police there smoke more than anyone, so I doubt they give a shit about enforcement-unless they are looking for a bribe.

            1. Well, don’t forget all those migrants; they smoke like it’s going out of style. Impossible to enforce there just by the sheer, concentrated, influx of people. And they aren’t terribly compliant with the law & police to begin with either…

              The bribes are there for tourists who don’t behave themselves, and public smoking is simply a primary infraction.

      2. Well, Zebulon, this one of the things that happens with either outright True Single-Payer, or “Universal” Medical Care (where purchasing individual policies is permitted):

        When someone else is paying at least 90% of your medical care (if not 100% – taxes paid), that someone gets that much say so over what TX is covered, and what you actually put into your body, i.e. your *ACTUAL* behavioural health care decisions.

        Strictly speaking, from a physician’s POV, I can understand why all these countries want to eradicate cigarette smoking (and other combustibles), since the sheer amount of medical spending, i.e. cardiovascular, pulmonary, peripheral vascular, *and* chronic RX maintenance TX thereof, is very, very, expensive, and 100% preventable, and want to direct those resources elsewhere.

        Like or not, they have say so WRT risk management, and would be no different if USA insurance companies opted not cover anything related to an active smoking HX, and direct premiums to the TX of other disease processes & procedures.

        1. The surprise is that they didn’t do it a lot sooner, I guess. They had universal healthcare in 2000 in most of Western Europe, and had for some time, and while tobacco taxes were high, you could smoke everywhere.

        2. Strictly speaking, from a physician’s POV, I can understand why all these countries want to eradicate cigarette smoking (and other combustibles), since the sheer amount of medical spending, i.e. cardiovascular, pulmonary, peripheral vascular, *and* chronic RX maintenance TX thereof, is very, very, expensive, and 100% preventable, and want to direct those resources elsewhere.

          From a physician’s viewpoint I can understand this.

          From a politician’s viewpoint, the more someone smokes, the quicker they die. Long-term it’s the health nuts, those who live to be 100+, who cost both government-funded health care and government-funded retirement the most money. Not to speak of all the tobacco tax revenue smokers generate that can be spent right now.

          1. also, how expensive is lung cancer as far as ways to die go? that’s an important question if taxes are paying for it, and it’s one nobody ever brings up.

            1. OTOH, how much does it cost Medicaid for ten years of long-term residential care.

    3. I am also surprised that ObamneyCare hasn’t tackled this at a national level

      Probably shouldn’t give the assholes any ideas, but I could see them trying to force the states to all have the same tax rate on cigs. That way there’ll be no incentive to go across state lines to buy smokes in lower tax jurisdictions. Instead you’ll have to go international. Then we’ll be treated to stories of nefarious international cigarette trafficking cartels without anyone taking half a second to think about why the same people smuggling drugs now would move into smuggling cigarettes.

      1. And there will be gang violence as cigarette gangs battle it out over turf! Think of all the anti-gun legislation we can create from such an epidemic of “unforeseeable” violence! /progtard

  6. You know who else ignored a tax stamp in Massachusetts?…

    1. Slave-owning white men, who should be ignored because they were slave-owning white men?

    2. I would love “suffering” under a colonial America level tax burden.

    3. Lysander Spooner?

    4. Those damn tea party crazies.

  7. “cigarette smuggling costs the Commonwealth millions of dollars in lost revenue year over year.”

    “And lost revenue from the *ivory trade* — Don’t even get me started!”

    1. Gotta just love the attitude that the money belongs to the government.

      1. “Excuse me. *Someone* has to pay for all these task forces!”

  8. This has nothing to do, as if it wasn’t plain enough, about ‘caring’ for people but just simply Massa. protecting its own revenue rackets as this quote reveals, “”cigarette smuggling costs the Commonwealth millions of dollars in lost revenue year over year.” They act no different than the Mafia on this front except they have the badges.

    Seriously, how can this end well? Are they gonna bang down doors and maybe even take a few lives here and there over fucking cigarettes? Heck, the government may end up ruining more people than cigarettes are alleged to do!

    1. In the good ol’ days before the industrial revolution and massive wealth creation economies were more or less stagnant. If y ou wanted to get rich your only option was to loot everyone else. You hired thugs and sent them out to pillage and loot.

      People who work in government don’t create wealth. Most of them have no idea what that means. I will let you draw your own conclusion about what that means.

      1. Ima guess government officials are the new Nobility who get rich by looting others?

      2. Could you imagine being a cop in that stupid task force?

        ‘I busted up some 22 year-old for selling cigarettes! That’ll learn ’em! Civilization saved!’

        Idiots.

        1. “Rookies. Get back to me when you’ve sqozen the life out of one of these tobacapackers.”

  9. Okay, why the fuck am I getting an ad for a $1,600 stainless steel suit of armor?

    1. Must have been that Nader magazine cover Reason used yesterday.

  10. Classic example of a problem created by government that requires even more government to fix, and the result will be even more problems.

    1. spot on

    2. But think of the jobs it creates! And best of all, these jobs, coming up with increasingly idiotic laws to ban things some people enjoy, can never be replaced by robots.

  11. This is why the culture war is important. People tolerate the drug war excesses because most people hate drugs and hate drug users. The government has done an excellent job demonizing drug users and this is why people tolerate the drug war. For 40 years they have been trying to do the same thing to smokers. The more an activity and the people who engage in it are demonized the more extreme government efforts people will tolerate to combat it.

    I don’t smoke and have never enjoyed it or wanted to do so. I sometimes wonder, however, if it is almost my patriotic duty to take it up and in doing so fight against the demonizing of smoking.

    1. Sometimes I think that prejudice is just natural human behavior. In this case people want someone they’re allowed to be prejudiced against, and the scapegoats are druggies and smokers.

      1. I think you are right about that. It is no longer acceptable to look down on people because of their race. That is of course a good thing but it didn’t solve the problem of prejudice. People have just moved on and found new and increasingly stupid and oppressive reasons to feel superior to other people.

    2. Dont want to echo chamber you guys but I agree. One reason tribes existed was to organize against the “other” for acquisition of any number of things…tribes of tribes with common (sic) identity, gods and goals need specialists and bureaucrats to support scale and bureaucrats (and sycophants to an extent) exist mainly to sustain and grow bureaucratic status and privilege.

      1. Human society was very recently (in anthropological terms) a collection of tribes, and to a large extent, still is.

  12. With the exception of the people living in gaycationland on Cape Cod, everyone in Mass is within an hour’s driving distance of New Hampshire, Vermont or Maine, all three of which likely have significantly lower tobacco taxes than Massachusetts. Short of searching every car with Mass plates at the border, how do they plan to stop this?

    1. Don’t give them any ideas. Or rather, that’s exactly where they’d like to go.

    2. Build a wall?

    3. I grew up in the Boston suburbs and when I was in high school we would drive up just over the NH border to buy fireworks, which have longed been illegal in MA. Undercover troopers would stake out the shops and then nail the buyers as soon as they drove back across the state line. Wouldn’t be too hard for them to monitor NH gas stations and look for folks coming out with cartons of smokes.

  13. NY is way ahead of MA here. They got the credit card companies to refuse to sell mail-order cigarettes to us over ten years ago and then started stealing any stray packages from the mail that had managed to make it through anyway.

    I fondly remember the time when Ontario actually cut their taxes because they saw they were too high. Those were the days.

  14. I have thought for a long time that tobacco will ultimately become a scheduled substance under the DEA. Looks like this is finally starting to happen. In fact, there is talk about a “tobacco-free world” or “endgame” by 2035 I believe. This does not mean that all users of the evil weed will disappear, they will simply be incarcerated, killed by police, or living on the streets.

    Oh, and the lost tobacco tax revenue will be replaced by forfeiture of the users property-brilliant!

    1. It would take an act of Congress.

      1. This was some big global health conference, where they declared a tobacco end game. I agree, it will never actually be illegal in the US, but you will see more places banning smoking or vaping everywhere, while ramping up taxes to the point where it will essentially be illegal. You will probably also be tested for nicotine at the doctor, like you are for cholesterol, and if you have any in your system, will be referred to treatment.

  15. I am making $98/hour working from home. I never thought that it was legitimate but my best friend is earning $12 thousand a month by working online, that was really surprising for me, she recommended me to try it. just try it out on the following website…
    _____________________ http://www.earnmore9.com

  16. What about schizophrenics? They smoke like chimneys.

  17. I’ve made $64,000 so far this year working online and I’m a full time student. Im using an online business opportunity I heard about and I’ve made such great money. It’s really user friendly and I’m just so happy that I found out about it. Heres what I do,

    ???????? http://Usatoday.nypost55.com

  18. RE: Bay State Officials Want To Emulate the Drug War to Collect Cigarette Taxes
    Harsh tactics may have failed to stamp out the trade in heroin and cocaine, but they’ll totally work against tobacco smugglers.

    Hey, at least they won’t get any taxes collected from the nicotine addicts in their state.
    They’ll just pass those taxes along to the non-smokers.
    That only makes sense.
    Now everyone pays more taxes to their moronic idiots running the commonwealth of Massivetaxes.
    Yup.
    Makes sense to me.

  19. Next up – the war on farting. Tax and regulate farts, higher taxes on public farting, if in your own abode, must self-tax self and pay penalty.

  20. busybodies, all of them. WHY can’t they just let folks decide for themselves what they do/do not put into their bodies? Seems some case could be made that such draconian taxes imposed by one state’s government are a violation of the clause of the Constitution that assigns to FedGov the task to “make trade between the states regular”. We know that tariffs, on goods landing from offshore, must be evenly applied in all the states. That also might lend strength to the premise that such insane tax schema are not proper.

    Better yet, WHY do not Massachussetts begin to trim their wasteful programmes, thus cutting the amount they spend every year, and reducing pressure to steal, er, I mean, confiscate more? Seems they are investing a LOT of pretty big money into the enforcement of this tax… paid “informants”, sting operations, SWAT type raids, boots on the ground inspections…. all to catch the small percentage of those smart enough to get round their ridiculous tax structure?

    I hate tobacco myself, but still support the RIGHT of others to use it as they choose… granted that they who use the stuff consider the obnixious effects their smoke causes others. Nanny state governments are a pox far worse than stinky cigarette smoke. And pipes, cigars, and “smokeless” products are barely offensive at all, so leave them alone.

    1. 4″I quit my 9 to 5 job and now I am getting paid 100usd hourly. How? I work-over internet! My old work was making me miserable, so I was forced to try-something NEW. After two years, I can say my life is changed-completely for the better!Learn More From This Site…

      ======> http://www.Today70.com

  21. Start working at home with Google! It’s by-far the best job I’ve had. Last Wednesday I got a brand new BMW since getting a check for $6474 this – 4 weeks past. I began this 8-months ago and immediately was bringing home at least $77 per hour. I work through this link, go to tech tab for work detail.
    >>>>>> http://www.realcash44.com

  22. Start making extra cash from home and get paid weekly… By completing freelance jobs you get online… I do this three hours every day, for five da?ys weekly and I earn in this way an extra 12000 bucks each week…

    i work through this Website.. Go Here.._____________ http://www.earnmore9.com

  23. That some never learned or conveniently forgot the consumaate failures of The War On Drugs is truly amazing.

  24. 3″My friend just told me about this easiest method of freelancing. I’ve just tried it and now II am getting paid 15000usd monthly without spending too much time. you can also do this.

    ……….. http://www.Maxcenter20.com

  25. 2″My friend just told me about this easiest method of freelancing. I’ve just tried it and now II am getting paid 15000usd monthly without spending too much time.You can also do this.

    >>>>> https://www.Cashpay60.tk

  26. I am making $89/hour working from home. I never thought that it was legitimate but my best friend is earning $10 thousand a month by working online, that was really surprising for me, she recommended me to try it. just try it out on the following website.

    ??? http://www.selfcash10.com

  27. 3″I quit my 9 to 5 job and now I am getting paid 98usd hourly. How? I work-over internet! My old work was making me miserable, so I was forced to try-something NEW. After two years, I can say my life is changed-completely for the better! Check it out what i do.

    >>>>>>>>> http://www.Today70.com

  28. I’ve made $76,000 so far this year working online and I’m a full time student.I’m using an online business opportunity I heard about and I’ve made such great money.It’s really user friendly and I’m just so happy that I found out about it.

    Open This LinkFor More InFormation..

    ??????? http://www.Reportmax20.com

  29. 5″I quit my 9 to 5 job and now I am getting paid 100usd hourly. How? I work-over internet! My old work was making me miserable, so I was forced to try-something NEW. After two years, I can say my life is changed-completely for the better! Learn More From This Site..

    ========> http://www.Today70.com

  30. my friend’s mom makes $73 hourly on the laptop . She has been out of a job for 6 months but last month her pay was $18731 just working on the laptop for a few hours…..

    Open This LinkFor More InFormation..

    ???????

    http://www.Reportmax20.com

  31. my roomate’s step-mother makes 60 each hour on the internet and she has been out of work for seven months but last month her check was 14489 just working on the internet for 5 hours a day, look at ..
    Read more on this web site..

    >>>>>>>>>>>>>>> http://www.maxincome20.com

  32. before I saw the bank draft which had said $9426 , I didnt believe that…my… brother woz like actualy earning money part-time at there labtop. . there uncles cousin has done this 4 less than fifteen months and by now repaid the dept on there place and got a great new Mini Cooper . read the full info here …

    Clik This Link inYour Browser??

    ? ? ? ? http://www.selfcash10.com

  33. Check out this article about the present state of bills around the US pertaining to the War on Drugs and another overview of the issue. It gives great context to the current state of this war in US legislation.
    http://bit.ly/28YHQJR

  34. Check out this article about the present state of bills around the US pertaining to the War on Drugs and another overview of the issue. It gives great context to the current state of this war in US legislation.
    http://bit.ly/28YHQJR

Please to post comments

Comments are closed.