This map shows cigarette taxes by state: fades from light blue Missouri, 17₵, to black, Hawaii $3.20. The feds take about another buck on top of that. New York is off the charts in red, at $4.35. The City levies an additional $1.50 tax.There's a profit to be made here. The price discrepancy creates an obvious opportunity for trade. Including taxes, a carton in Virginia costs $40, in New York it can be sold on the street for $100. The extent of this is difficult to estimate, but I think it would be fair to say that around half of cigarettes sold in NY are sold illegally.
Unfortunately, as NPR reports, the sector's already crowded by some very dangerous incumbents. It's big business for organized crime: ATF agents and Virginia Police broke up a smuggling ring where ecstasy, cocaine, and firearms were traded for eight million dollars in black-market cigarettes (that's about four hundred thousand cartons). And business is what these guys mean...
The rewards, and the risks, of dealing in contraband cigarettes became quite clear recently in northern Virginia, says Capt. Dennis Wilson of the Fairfax County Police Department.
Undercover investigators working with his department "had two cases where contacts that we were working with had asked us to murder their competition," Wilson says.
They do say the Tobacco Industry kills. Interestingly, New York's alcohol taxes are fairly low. That was a similarly effective government program to create jobs, although, like Prohibition, high and unequal tobacco taxes is essentially make-work. Thankfully, this industry isn't perfect at evaluating its employees...
"We were able to fake the murder of the individuals."
