The Booming Cigarette Black Market

August 12, 2008

The Tax 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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