By Nathan Barton
When we hear “prohibition” we immediately think of the 1920s-1930s alcohol fiasco, or the failed War on Some Drugs, especially on cannabis.
But there are two ways to have “prohibition.” Yes, the traditional method is to just outlaw the product. (As Federal Nazgul and a whole bunch of states are trying to do with 3D-printed guns and many Tranzis want for ALL firearms (in private hands other than their own, of course).) But the other way is often more effective (and sly).
Tax them out of existence.
There are lots of ways to do so, and tobacco and guns are the historical case studies that show how this works. For a decade and more, cigarettes have been charged ever higher excise taxes at the fed, state, and local level. (In New York City, $5.85 of the $13 price for a pack of Marlboro is state and local excise tax. That is 45% of the price.) Tobacco is still legal, but the prices are supposed to get people to stop smoking. (Never mind that it also reaps vast tax profits for the governments. And supposedly pays for the “extra cost” of medical treatment for tobacco users.) In guns, we know how well taxation can cut into buying and selling. Not just the 1934 ban on civilian ownership of fully-automatic weapons. (Or should I say “virtually all?”) A similar situation exists on noise suppressors (“silencers”). California, I understand, is now trying this method by taxing bullets.
But tobacco is the star poster child. Now, along comes a BATFE thug (haughty in his arrogance about the years he served in the streets “fighting crime”) to tell us what a horror the world faces from “illicit tobacco smuggling.” (Which of course implies there is such a thing as “licit tobacco smuggling” – huh?)
In a piece in the infamous WaPo, he warns of the harm of Virginia’s illicit tobacco trade,” explaining it funds the activity of Muslim terrorists, steals money from states, and thwarts efforts to get people to stop smoking.
Virginia, home to tobacco farmers and Big Tobacco, steals a measly 30 cents per pack. That is less than 1/14th New York State’s $4.35. (South Dakota steals $1.53 a pack.)
So he claims that 1 in 5 packs of cigarettes sold in the Old Dominion is smuggled out-of-state and sold elsewhere. (With state and local taxes at $5.85, more than half the cigarettes sold and smoked in New York City are smuggled. Other places are probably nearly as bad.) As a result, Virginia is “stealing” from these other states. Billions of dollars per year. By NOT stealing as much from buyers of cigs in Virginia. Got that?
To me, as an engineer, the numbers are fascinating.
Let us say you are a “do-gooder tobacco merchant.” Let us assume that wholesale price of a pack of smokes in Virginia is the same as in NYC (which it ain’t by a long shot). And that of that $13 paid in NYC, after $5.85 in taxes and a dollar in mark-up (which is probably high), the pack costs $13-5.85-1=$6.15. You buy a thousand cartons from Joe’s Wholesale Tobacco Company in Colonial Heights and drive those to a Brooklyn warehouse (just down the street from where the Parkers live, no doubt). You sell them retail for $8.45 a pack, two dollars over Virginia’s (bogus) wholesale price, plus the 30 cents Virginia’s tax thugs stole. Savings to the average NYC dweller, $4.55 cents: like a buy-two, get-one-free deal or better. Your markup is that two bucks, out of which you pay for transportation, maybe storage, and bribes: probably still netting a buck. $10,000 for a day trip from south of Richmond to NYC. And you stiffed NYC and NYS a grand $58,500!
If you are a Friend of the Prophet, you give $1,000 of that to your local Muslim Brotherhood imam to send a hundred or so back to Gaza or wherever the Caliph hangs his turban these days, and use the other 900 to radicalize some more people to go abuse children in New Mexico. If you are a Faithful Friend of the Prophet, that’s $2,500 instead of $1,000. Or so this BATFE thug claims.
And… shockingly! – you “undermine the rule of law.” Apparently it is even worse smuggling overseas. The EU’s MINIMUM excise tax rate on smokes is 57% (as compared to the NYS/NYC 45%), so that same pack would cost $14.56, not just $13.00. Virginia is stealing even MORE money from Germany or France or Spain. (And, I am told, selling them much better quality, too.) And it means those governments can’t control the supply and price of tobacco: they are less effective tyrannies, to boot!
Not only that, but the BATFE thug tells us that Muslim terrorists are big time into the cigarette smuggling. (How many cartons can you hide under the average burka?) So these undocumented immigrants are not just selling sin/poison, stealing from governments, and endangering people’s lives with cancer. They are stealing American jobs! Cutting into the traditional Irish and Italian mafia activities, and maybe even into the turf of Hispanic gangs as well.
It is too shocking. Not just American but world society, economy, and government are on the verge of collapse.
But the BATFE thug has a solution to keep this dire prophesy from coming to pass. He writes:
…Virginia’s lawmakers should take the lead.
Legislation with teeth needs to be enacted to combat tobacco smuggling on an international scale, similar to the war we are waging against narcotics. The United States should adopt the same sort of tactics we use to fight the corruption, fraud and funding of international terrorism.
Oh, yeah! We know how well both of these efforts have succeeded. I’m only half-joking to say that after a year or two of these measures, that 50% (not just 20%) of Virginian-made cigarettes will be smuggled, and that 75% of NYC’s cigarettes will be black market.
The incredible arrogance and pride of the BATFE thug is dwarfed by his stupidity. And those who want more control and money going to government.
Note: Don’t smoke, never have.
I’m on Long Island(NY), and blow through about 2-3 packs a day. Fortunately, there are a couple of Indian Reservations on the island, where, if you’re not too picky about quality, a carton (in bag form)
can be had for $10, or $1 a pack. NY State (and especially NYC) got too greedy for their own good, and it backfired. As cigarette taxes rose, more and more people decided they had enough, and felt the trip to the Rez is now entirely worth it, (even if they have to drive 50+ miles each way).
I’ve noticed the increase in traffic at the Rez, and also noted the State’s greed had created jobs- for smugglers! Young men, many driving VERY expensive cars, load up their trunks with cheap cigs,
and head to NYC to triple or quadruple their money in the space of 2-3 hours. I don’t blame them for taking advantage of the market, and don’t blame anyone in NYC for buying black market cigarettes.
The State` and NYC, in the meantime, now get $0 in tax revenue from the consumers of
black market cigarettes. Lol, maybe they’ll raise taxes even higher to make up the difference, which will see even MORE otherwise law-abiding people buying smokes from either the Rez directly or from the smugglers. ;))
Dear Paul: great to hear from someone living on the front lines, so to speak. Government thugs can be incredibly stupid, but all too often it is everyday people that pay for their stupidity. I’d forgotten about tribes right there on Long Island, and in CT and NJ. The prices you are paying remind me of what soldiers paid at the PX or BX in California back in the 1980s.