By Jonathan Berr, Mar. 21, 2014, CBS Money Watch
More than half of the cigarettes
sold in New York State are smuggled in from other places to avoid the Empire
State's taxes on smokes, which have soared nearly 200 percent since 2006,
according to a report issued by the conservative Tax Foundation.
New York is the highest net
importer of smuggled cigarettes -- illegal smokes account for 56.9 percent of
the state's total market. New York's cigarettes tax is $4.35 per pack, the
country's highest. The situation there isn't unique. The Tax Foundation also
cites a study that found that 58.7 percent of discarded cigarettes found in
five Northeastern cities lacked proper tax stamps.
Taxes on cigarettes, which are designed
to discourage smoking, vary widely. States such as Missouri, North Carolina and
Virginia have levies of less than a $1 per pack. These wide differences make
smuggling "both a national problem and a lucrative criminal
enterprise," according to the Tax Foundation.
Antismoking activists have long
argued that fewer people will buy cigarettes if they're expensive. Chicago recently raised
its cigarette taxes for that reason. Combined with state and local levies, the
total is now $7.17 a pack.
The smuggling problem "is a
lot smaller than the study lets on," said Thomas Carr, director of
national policy at the American Lung Association, noting that the Tax Foundation's
data come from the Mackinac Center for Public Policy, which has received
funding from the tobacco industry. "Tobacco companies are generally
against higher tobacco taxes."
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