Cigarette tax hikes good news for bootleggers (butt-leggers?)


Just as pressure differentials spawn tornadoes, price differentials create a vortex of demand. The widely different excise taxes put on cigarettes from state to state has turned millions of smokers into smugglers, and smugglers into rich smugglers.

Can you blame a smoker in New York, who is paying state excise tax of $2.75, if he buys a few cartons while on vacation in South Carolina, where the tax is only $.17 a pack? Do the math. Paying an extra $2.58 a pack times two packs a day: $5.16. Thirty days a month: $154.80. Twelve months a year: $1,857.60 a year up in smoke. Of course, most New Yorkers don't pass through the Carolinas regularly, but many live near Native American tribal grounds, where state excise taxes don't apply at all. A recent study concluded that 71 percent of western upstate New York smokers buy their smokes there.