New York’s Deadly Cigarette Tax

New York’s Deadly Cigarette Tax

Prohibition created crime. It really is that simple. The history presented in the article:

The tax hikes also spurred crime against legal businesses. The chairman of a New York State commission that investigated the illicit tobacco trade stated that the tax hikes caused distributors and retailers to be “confronted almost daily with the risk and dangers of personal violence which are now inherent in their industry.” To the dismay of other states, the crime associated with New York’s illegal cigarette trade spread beyond its borders. Across the country, trucks carrying cigarettes were hijacked and businesses selling cigarettes were robbed to supply New York’s black market.

State and city officials experimented with a variety of ways to control the crime, including mandatory prison sentences for cigarette bootleggers, expanded police powers of search and seizure, and more industry regulation. But none of those measures had much effect. Finally, by the mid-1970s, with tobacco-related crime rising and governments and business losing millions of dollars to bootlegging, a special state commission recommended that the city’s cigarette tax be repealed. New York Governor Malcolm Wilson embraced that proposal and said, “One major incentive to organized crime is the high New York City cigarette taxes, piled on top of the state tax, which have made that city the promised land for cigarette bootleggers.”

While the governor fought hard for cigarette tax repeal, parochial politics scuttled its passage. However, escalating violence, including a series of homicides resulting from turf battles and efforts to silence witnesses, discouraged policymakers from further tax hikes in the late 1970s and early 1980s. That allowed the high inflation of the era to reduce real cigarette tax rates by more than 40 percent, which sapped the profitability of bootlegging and reduced smuggling and related crime.

The lessons learned from New York’s tax-induced crime wave were short-lived. By the late 1980s, New York State’s cigarette taxes were again on the rise, prompting one official in the state’s tax enforcement office to note that “in New York it is literally more profitable to hijack a cigarette delivery truck than an armored truck.” Today, at least half of the cigarettes consumed in New York City have somehow avoided state and city excises. ATF officials report that in addition to traditional organized crime, street gangs and terrorist groups are now also involved in the city’s illicit cigarette trade.

Prohibition is the same, no matter what is being prohibited, and the results are the same. Prohibition of liquor created the Mafia in America as we know it. It was a failure. Recreational drug prohibition (other than, of course, alcohol, caffeine, Viagra, and Everquest) has resulted in the largest crime growth and the greatest infringement on freedom in our short history. Cigarette prohibition (since that is what this really is an attempt to do) is causing the exact same problems.

The proof is that when ending the prohibition was tried it was a smashing success. When the prohibition was brought back, the crime came right with it. Those who do not study history are doomed to life of politics, I guess.

One Comment

  1. Helene says:

    I’m french , and I want to talk about a strange phenomene which is happenning in France. A kind of prohibition (prices augmentation…) is developping here by the goverment to fight under the cancer. A parallel market is in developpement and , everyday , a lot of things like cigarette steals happenned. the prohibition is not a solution , not in NY , not in France. Why are the authorities insisting?