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The Booming Cigarette Black Market

1 min readBy: Joseph Bishop-Henchman

The TaxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. Foundation’s Patrick Fleenor made an appearance in a Wall Street Journal editorial yesterday on cigarette taxes and smuggling:

Maryland is only the latest state to prove the folly of trying to finance government with a tax on a shrinking pool of smokers. In New York City and State, tobacco taxes have been raised so many times that the retail cost can exceed $9 a pack — about double the national average. Few budget-savvy smokers in the Big Apple pay that tax. Patrick Fleenor, an expert on tobacco taxes at the Tax Foundation, estimates that there is “now a 75% gap between cigarette sales in the city and cigarette consumption.” In other words, three out of four cigarettes are bought elsewhere or are contraband. Out-of-state purchases, tax-free Internet sales and a cigarette black market are booming.

See the rest of the editorial here.

For more on cigarette taxes, click here and here.

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