EPJ: New York State Black Market in Cigarettes Booming

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January 20, 2013 by irbi2076

From The EconomicPolicyJournal.com:

The state tries to control the economy, but it can’t. It only distorts the economy.

More than 60 percent of cigarettes smoked in New York State, which has the highest tobacco taxes in the nation, are smuggled in from out of state and consumed tax free, reports Bloomberg.

The more oppressive a government becomes, the more workarounds develop.

New York raised its excise tax by 58% from $2.75 a pack to $4.35 in 2010, but it resulted in only a 20% increase in revenue.  Some of this mismatch may be the result of smokers quitting, but a good chunk of the difference is likely because of cigarette sales going underground.

It’s is really good to know this underground network is in action. In addition to smokers being provided tax free cigarettes, the black market that is developing in NYS is creating a network of trusted suppliers and customers that can be operational against further government interventions that may take place down the road. If prices start to skyrocket and government imposes price controls, this black market network may prove to be a lifesaver for many in getting food and other products that are not available at government decreed below market prices.

See the original post by Robert Wenzel here.

 

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2 thoughts on “EPJ: New York State Black Market in Cigarettes Booming

  1. EthanAllen2076 says:

    Just like the 1920’s Speakeasys…

  2. bfranklin2076 says:

    Kind of ironic that everything the government tries to ban, control, or even regulate sparks a huge black market, whether they be technically good for you or not. Just look at the drug war (which both liberals and big government conservatives support) and the cartels fighting along our southern border.

    Pretty funny that these unintended consequences are the only times where government stimulates a sector of the economy. Speaking of which I stopped into Walmart last night to pick up some ammo and the shelves were completely wiped out. Huge stimulus in the ammo/gun market!

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