Cigarettes

Gov. Cuomo's Plan To Attack Cigarette Retailers Will Fuel New York's Black Market

More than half of cigarettes consumed in the state are smuggled from elsewhere, thanks to high taxes.

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New York Gov. Andrew Cuomo is calling for harsher penalties for untaxed cigarette sales in the Empire State, showing yet again that regulators do not understand the relationship between high taxes and black markets.

New York state has some of the highest cigarette taxes in the country. And in New York City, the prices are even higher: a minimum of $13 a pack. Partly due to these high imposed costs, more than half of the cigarettes consumed within New York are estimated to have been smuggled in from states with lower tobacco taxes. These cigarettes are then resold on the black market in New York for less than the price of legal cigarettes.

Cuomo says his agenda for 2020 includes crafting a new state law that will go after any retailers who bring in cigarettes purchased in other states and then try to sell them. Under Cuomo's proposal, retailers caught selling cigarettes they've smuggled from other states could lose their liquor and lottery licenses and even be shut down entirely.

While some regulators deliberately turn a blind eye to how their own high taxes and complicated regulations lead to black markets (see California's almost comical attempt to legalize recreational marijuana), Cuomo's State of the State release makes it clear that he knows very well that the state's own regulations are feeding this behavior:

One byproduct of the aggressive rate of taxation applied to cigarettes in New York City—currently the second highest rate in the nation—is the continuing incentive for unlawful retailers to evade those taxes by breaking the law.  Some unscrupulous retailers persist in trafficking in cheap untaxed cigarettes, a practice that not only undermines efforts to reduce smoking, but also deprives the State of essential revenue for use in enforcement and public health initiatives. It also places law-abiding retailers at a significant competitive disadvantage, while making it difficult for localities and the State to regulate the price of these products with the goal of discouraging people from buying them.

If passed, Cuomo's law will be used to go after small businesses that are already struggling to turn a profit. Convenience stores operate on tiny margins (often less than 2 percent) and many are dependent on tobacco sales for their profits. The idea that there are tons of "unscrupulous retailers" living high on the hog off smuggled cigarettes is akin to believing that every drug dealer is Pablo Escobar. For every black market tobacco kingpin, there are many more people like Eric Garner, who was confronted by police and ultimately choked and killed partly over suspicion that he was selling untaxed black market cigarettes. We could see more Garners under Cuomo's proposal, which local police will be expected to enforce.

This proposal certainly doesn't bode well for Cuomo's desire to legalize recreational marijuana in New York. Based on the way it taxes cigarettes, New York is likely to have the same problem as California: extremely high taxes and oppressive regulations that will keep the black market fully intact.

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  1. “I can’t breathe.”

    1. Yes, this should give the NYPD more situations where they can murder people under the umbrella of their authoritah.

    2. Sounds more like a psychological issue; unless of course you’re typing under water.

  2. California’s pot rules are a joke. Neighbors have shown me pot plants 9 feet high and 6 feet across, so big that even one plant might violate their rules on how many plants can be in so many square feet. Yet these neighbors grow hundreds of plants. The sheriff helicopter takes pictures, then they wait til a month or two after harvest to send *code enforcement* around to show the pictures and say they’d be back in a week or two to make sure all the plants are gone.

    Apparently the only time they send the po-po out with code enforcement is when there have been prior ugly incidents with the same grower. Apparently as long as the grower grovels appropriately (and this DOES NOT include any bribery that I have heard of), all ist gut til next year, when the same circus repeats, probably with different rules on number of plants and square footage.

    I’m sure I have heard what the number and square footage limits are, but I don’t remember. Something small, like six plants and 100 sq feet, whichever is lower.

  3. Gov. Cuomo’s Plan To Attack Cigarette Retailers Will Fuel New York’s Black Market

    Won’t happen. Fredo’s smart, not dumb like everyone thinks.

  4. Under Cuomo’s proposal, retailers caught selling cigarettes they’ve smuggled from other states could lose their liquor and lottery licenses and even be choked to death by law enforcementshut down entirely.

    FTFY

  5. Taxes, is there anything you can’t do?

    1. You cannot strangle people for not complying but that is what law enforcement is for.

  6. The intention of these high taxes on cigarettes is to create an incentive to quit. It’s a public health issue. Cigarettes kill. Period. These high cigarette taxes help the poor by making smoking too expensive. Smuggling cigarettes in from less enlightened states removes that incentive to quit. It makes it easier for poor people to smoke. Because cigarettes kill, these smugglers should be charged with murder and given the death penalty. Or just strangled on the spot.

    1. Let’s tax mountain climbing too; that also kills.

      Let’s tax bicycle riding; people die from that.

      Remember that runner who died from a heart attack? let’s tax running too.

      Let’s tax birth; it has a 100% mortality rate.

      1. Cars, you forgot cars.

        1. Wind-powered cars are ok, since they haven’t killed anybody yet.

          1. Wind-powered cars don’t kill people, but the first time a person kills a person using a wind-powered car, some Don Quixote will mount his self-righteous hobby horse and ride off to joust against the wind-powered car lobby.

        2. And cats, don’t forget cats.

          Known killers. My cat has at least a dozen kills I know about.

      2. “Let’s tax birth; it has a 100% mortality rate.”

        Life is a terminal disease.

      3. It would be easier to impose punitive taxes to the point of defacto prohibition (defacto ban tax) on
        _ mountain climbing
        _ bicycle riding
        _ running in public
        _ driving an untagged car
        _ flying an airplane without FAA numbers
        _ sailing an unregistered boat
        because these are all public activities done out of doors or the diaspproved items are bigger than a breadbox.

        It is more difficult to impose defacto ban tax on cigarettes, alcohol, marijuana, handguns, abortion, gay sex, (whatever windmill our Don Quixote jousters are after today, Vape juice? MAGA hats?) because (a) the things banned are smaller than a breadbox or the activities are private and easily done under the radar, and (b) millions of otherwise lawabiding citizens feel they have a right to the banned item, that they benefit from it, that they aren’t harming others and that it is nobody else’s bees wax.

        Malum Prohibitum laws are toxic on several levels.
        _ they are easily evaded
        _ they create black markets likely to pander to abusers
        _ they create black markets that appeal to otherwise law-abiding citizens who feel the ban shouldn’t apply to them
        _ they end up, the more you try to enforce these malum prohibitum laws, the less effective the law and government appear
        _ they undermine public respect for law and order

    2. Quit or die? That’s your solution?
      It’s not easy to quit smoking, otherwise more would do it. NRTs don’t work all that well, vaping is attacked left and right…
      Helping the poor is what an enlightened society would do.
      This kind of society would embrace tobacco harm reduction and not imposing high taxes and bans.
      Search what’s happening in the UK and Sweden regarding smoking combustibles cigarettes to understand what I’m talking about.

    3. Forget taxes,

      Let’s just raise the minimum age to purchase to 21. Then 35. Then 55. Then ban them altogether.

      Hell, just bring back the Eighteenth Amendment and include all the bad things in the world.

      You know, for the kids!

      In one fell swoop we could stop the drugs, drinking, smoking, prostitution, coffee, tea, women wearing pants, and global warming!

      I’m sure the government could get it right this go-round.

      1. Let’s start with the banning women from wearing pants bit, and see how it goes.

        1. Yoga pants had better be exempt!

          1. A wise man once said “Just because they sell it in your size, that doesn’t mean you should wear it”.
            No exemptions.

  7. I don’t smoke but I was looking at cigarette pack prices while waiting in line at Walgreens.

    $5.50 a pack. I cannot remember the price of a carton but quick math had the price per pack at less than $5.00 a pack.

    1. Like gasoline, the taxes are what make it ‘expensive’.
      When my son smoked, I used to drive him nuts telling him I smoked in college, but quit when the price went from 20 cents a pack to 25 cents a pack, because they weren’t worth more than a penny each.
      (Yes, it was in the mid sixties)

      1. Ok, my Dad used to send me on my bike to the local convenience store to buy his L&Ms for him; that was in the 60’s and they were at least 60+ cents a pack then.

        I suspect you are a lot older than you claim.

      2. A while back, I went looking for a cheap amateur astronomy telescope at least as good as the $9.95 Gilbert I bought saving my allowance in 1960. Today’s prices seemed high for similarly capable ‘scopes. Running that 1960 $9.95 through the inflation calculator at Wikipedia, that would be $84.28 today.

        1960 to 2019: 847% inflation on the dollar.

        My 1960 $2 a week allowance would buy (approximately) what $16.94 would today.

  8. “Some unscrupulous retailers persist in trafficking in cheap untaxed cigarettes”

    Nevertheless, they persisted!

    1. For shame Fredo, for shame.

  9. Cuomo and his crew will crucify the tobacco retailer and allow the pot heads to buy legal weed by lying about how much better this intoxicant is so that you can ingest and smoke it, this is in your system and you are not deemed a public hazard while operating a vehicle or piece of heavy equipment…..meanwhile they are planning on undermining your inalienable rights so that their elitism can prosper and thrive…….

    1. Tobacco is much worse, nobody pretends that you should operate heavy equipment on pot, and not everyone who uses pot is a “pothead”. The argument is that, unless I’m endangering someone else (say by operating a vehicle while high) it’s not the government’s, or any damn body else’s, business what I am ingesting, smoking, snorting, screwing, etc.

  10. My plans are naive at best, everyone else should be punished until my foolishness actually works. — Every prohibitionist ever

    1. The first few times you can forgive them for ignorance; at this point one must assume that they know the consequences, and are purposely courting said consequences.

  11. Thanks for explaining that Eric Garner was suspected of selling loosies; all the other stories on the incident, even from Reason, just assume he was selling them, when in fact, he was actually breaking up a fight, but the police who responded had arrested him before for selling loosies, and so harassed and then murdered him.

    1. He had sold loosies. And he was guilty of protesting his innocence of wrongdoing to police. He refused to submit to unjust authority over something he did not do. That refusal justified authority correcting him. To death. New York is not called the Empire State for nothing, and New York City is even more elite that the rest of the Empire. The attitude of that city and state are Imperial. Andrew Cuomo thinks he’s Darth Vader or something. OK, I think Andrew Cuomo is Darth Vader and Michael Bloomberg is Darth Sidious.

  12. No political proposal connected to anyone named Cuomo has ever made any more sense than the Volstead Act, in my experience. The family seems to have some sort of genetic flaw which makes it impossible for them to connect cause and effect.

  13. Summary lynching by cops was not harsh enough for loosies in disguise! Imagine if Noo Yawkas wuz talkin’ ’bout something illegal…

  14. Lefty States housing the [WE] plantation.

    Sell your soul to the [WE] foundation… Because you don’t own you!! [WE] own you!!

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