A few days ago, I had a Letter to the Editor published in the Charlotte Observer about a proposal to raise North Carolina’s cigarette tax, and one reason given was that it would help curb teenage smoking. I wrote in my letter that it wouldn’t, because all it would do is make a more profitable black market for cigarettes, and I cited New York as an example. I also pointed out that these criminal black marketeers don’t check IDs.
Today I received a letter in the mail from someone responding to this. I have no idea who, as this person gave no name, no return address, and no e-mail address. This person didn’t see fit to send in a reply to the Observer or any other public forum, or give me any way to respond directly. So I’m putting it here for all to see.
The blockquoted portions are from the letter. The rest is my response.
You claim that New York’s high cigarette tax is responsible for a black market run by criminal gangs. How then would you explain why my mother-in-law was buying black market cigarettes back in the late ’60s, before a significant cigarette tax existed?
Because black markets have always existed and always will. I don’t know much about cigarettes in New York in the 1960s, but one possibility is that people were buying illegal drugs anyway and hey, might as well get them all from the same source. But the recent cigarette tax has made it much more profitable to do so, so much that individual cigarettes are selling on the streets for 50� or more.
There’s a good article in Reason Magazine from 2002 about the New York taxes and cigarette smugglers.
The fact is that as long as there was another state that had an even lower cigarette tax (like North Carolina) even if only a few cents a pack, there was an incentive for gangs to transport truckloads of cigarettes. If every state imposed cigarette taxes as high as that charged by the highest taxing state, all incentive would cease for black market operations.
That just isn’t true. Criminals rarely pay taxes on contraband. They can even get items that are illegal and highly enforced, like heroin and cocaine. They would have no trouble obtaining cigarettes tax-free. Criminals aren’t likely to pay taxes out of a sense of civic duty. Tax it all you want, you won’t stop it, just like making heroin and cocaine illegal hasn’t stopped their use.
Besides, there’s a blatant inconsistency here: above you say that there was a black market for cigarettes without "a significant tax." Here, you say that if the tax were uniform it would remove the incentive for the black market. You can’t have it both ways.
You’ll have to think a little harder if you want to come up with a reasonable argument against raising North Carolina’s cigarette tax. I suggest you start saving your pennies now so you’ll be able to pony up the extra $.50 per pack that will be required to support your habit.
Anyone who knows me will tell you that I don’t smoke–never have, and never will. I’ve also never so much as touched an illegal drug, haven’t had a sip of alcohol since college, and even gave up caffeine a few years ago. Why did you assume that I smoke? Is it just easier to assume that I have a vested personal interest and bias on this issue? Does that make it easier for you to dismiss my arguments? Can anyone say, "Poisoning the Well" fallacy?
The letter is signed, "A Member of the Non-Smoking Majority." Well, I’m a member of the non-smoking majority as well. But I also know that this country is a republic, not a democracy, and the tyranny of majority rule is not supposed to apply here. I hate smoking and everything about it, and try to avoid it as much as possible. But I love freedom more than I hate cigarette smoke.
It’s a shame more people aren’t of that mind. Where is the love of freedom that made our forefathers fight and die for it?