Cigarette taxes have reached an all time high in some states, causing illegal cigarette smuggling to increase. Conservative think-tank “Mackinac Center for Public Policy” released a study that shows more than one-third of all cigarettes smoked right here in California are smuggled in.
The Sacramento Bee says the study finds that illegal distribution of cigarettes is strongly correlated to the level of taxation. In New York, where taxation on packs is $4.35 in the state plus an additional $1.35 in New York City, an estimated 60.9 percent of the cigarette market is smuggled in from other states. New Hampshire ranked as the highest exporter of cigarettes, where 27 out of every 100 packs leave the state.
Michael D. LaFaive, the study’s lead investigator, cites “prohibition by price” as the main reason for illegal distribution. In 2010, a Virginia man was convicted of murder-for-hire for his role in killing another man over illegal cigarettes. In 2011, a Maryland police officer was sentenced for running cigarette packs across the border using his squad car. Government attempts to regulate the illegal activity, such as official stamps, are also being counterfeited. Cigarettes sold individually at 25 to 50 cents, colloquially known as “loosies,” are a main route that the illicit trade uses to circumvent the law.