Up in smoke: New York cigarettes hit $9 a pack

A few weeks ago, I wrote a post in which I mentioned New York's plans to raise taxes on cigarettes. Well, the bill passed, and cigarettes are now $9 a pack in New York City. While this is sure to increase tax revenue in the short run, it's not hard to see how it will backfire.

The first negative side effect is the fact that it will encourage criminal behavior on the part of ordinarily law-abiding citizens. According to a report by the Independent Budget Office, earlier tax increases led to massive growth in the purchases of illegal cigarettes. In fact, in 2006, 27% of NYC smokers and 34% of upstate smokers purchased "under-taxed" cigarettes. Now that the taxes on a pack of cigarettes have more than doubled, those figures are expected to skyrocket.