A. Barton Hinkle on How New York City’s Steep Cigarette Taxes Create Crime and Grow Big Government

Thanks to New York’s laughably high
cigarette taxes ($4.35 state plus another $1.60 in the city) and
higher prices generally, a pack of smokes in New York City costs
$14 or more. That creates a powerful incentive to smuggle smokes in
from states such as Virginia, where you can buy a pack for a third
of that price. Fill a Ford Econoline van with a few hundred cartons
and you can make a nice five-figure profit in a weekend. Some
people do.

The robust cigarette smuggling irritates officials in New York,
because they miss out on a lot of tax revenue. The trade irritates
officials in Virginia for the same reason, because smugglers buy
wholesale to avoid the retail sales tax.

There’s an easy fix for all of this, writes A. Barton Hinkle:
Cut those taxes.

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