Blackmarket cigarette ring taken down

In New York City, police have taken down an illegal cigarette ring that was operated in a Queens warehouse and sold cartons from the trunks of cars. Normally a carton of cigarettes cost $75, but since this ring was selling tax-free the cartons only cost around $25. I’m not sure what percentage, but it seem a significant number were counterfeit. The district-attorney says they are unsafe:

The counterfeit cigarettes were exceptionally more harmful than U.S.-made ones, because the fakes don’t adhere to New York state law requiring “firesafe” cigarettes that automatically burn out if not puffed after a brief period of time, Rice said.

I was under the impression that the biggest harm from cigarette use is lung cancer and emphysema, not whether they are firesafe (but I understand the rationale for this protection). Still, if they really care about not having fake cigarettes on the market (and thus the safety of the citizens), I’ve got an easy solution – lower the taxes on the damn things! This is a perfect example of an extremely heavy tax leading to black market goods. When given the choice between legal and illegal, most people choose legal. But a heavy tax puts legal cigarettes out of the reach of many smokers…smokers who will find a way to get their nicotine fix, and in this case obviously have.

Interestingly, I found an article from way back (ok…not really way back, but 1996) in Reason magazine discussing a similar issue (only it was on the implications of smoking prohibition, though a huge tax can essentially be a form of prohibition):

The high price of cigarettes will force smokers to reduce other expenditures or seek extra income. Some will resort to begging, theft, or prostitution. In addition to shelling out a lot more for cigarettes, smokers will face the familiar hazards of a black market. They will not know if the product is adulterated or contaminated, and they will have no recourse if they are cheated.

Smoking should be discouraged, and taxes are one way of achieving this…but taxes that are too large create this underground situation which has the potential to be very dangerous and hazardous to our safety (and the safety of smokers). Perhaps we should start looking at other alternatives to discouraging unhealthy behavior beyond taxing the hell out of it…but what do I know.

Cigarette-ring article from Newsday

Link to Reason magazine article

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3 Comments

  1. Jamelle said,

    August 15, 2007 at 7:30 pm

    Should smoking really be discouraged? I mean, I think smoking in public places should probably be discouraged, since the smoke has been shown to be harmful to nonsmokers. But as far as people smoking in private residences, I don’t see a problem. I think cigarette taxes in New York should be cut if they are so high as to encourage a black market (as long as those cuts are off set by a reduction in spending or an increase in another tax).

  2. Jamelle said,

    August 15, 2007 at 7:31 pm

    Oh I almost forgot. Good post.

  3. Lily said,

    August 16, 2007 at 7:54 am

    I think in general that unhealthy behaviors should be discouraged, and healthy behaviors promoted. Of course I come at this issue from the perspective of a future physician, so it is more a responsibility I would place on myself, and not on some large authoritative figure. At the end of the day though, all you can do is tell someone that smoking is bad for them and present some evidence…it’s up to them to decide whether they follow your advice or not. And I agree that smoking in private residences is fine.


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