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Title: Bay State Officials Want To Emulate the Drug War to Collect Cigarette Taxes
Source:
Reason
URL Source: https://reason.com/archives/2016/06 ... -officials-want-to-emulate-the
Published: Jun 7, 2016
Author: J.D. Tuccille
Post Date: 2016-06-08 08:38:43 by Deckard
Keywords: None
Views: 6134
Comments: 37
In response, the state established the Illegal Tobacco Task Force, to crack down on those subjects who refuse to be passively milked or else give up on their vice. That unholy committee of cops and revenooers has come up with a plan for victory in pursuit of its "mission to confront and combat the illegal tobacco trade in Massachusetts": import personnel and tactics from the war on drugs. Because we all definitely look to drug prohibition as a model for success, right? Well, not all of us—a lot of police, health professionals, and prosecutors are having doubts. More on that later. In its initial report, released two weeks ago, the task force complains: "Several recent studies have indicated that approximately 11.9%-12.7% of all cigarette packs sold in the metro Boston area failed to bear a valid Massachusetts tax stamp. Another study using different methodologies and testing techniques estimates the size of the illegal cigarette market in Massachusetts at 15.53%." Just as concerning for officials, smuggling has bled over into the growing market for "other tobacco products" including cigars and chewing tobacco, though the scope of the illegal trade is harder to measure. This is a serious problem, we're told, because "cigarette smuggling costs the Commonwealth millions of dollars in lost revenue year over year." Unsurprisingly, black market goods are brought in from states where tobacco is taxed at a lower rate—which is to say, almost anyplace else. Actually, the Task Force—a collaboration between the Department of Revenue and the State Police—may be underestimating the amount of cash slipping through its fingers. The Mackinac Center for Public Policy, the go-to authority on American cigarette smuggling, tracks this sort of trade across the entire country. Its latest estimates, released in 2014, did indeed put smuggled cigarettes at 12.71 percent of the market. But that was before Massachusetts hiked the tax by $1.00 per pack to $3.51. A 2013 study also produced before the tax hike found that nearly 40 percent of discarded cigarette packages in Boston bore out-of-state tax stamps. And why not bring them in from elsewhere when cigarettes are taxed at $1.78 per pack in New Hampshire, $1.60 per pack in Pennsylvania, and $0.30 per pack in Virginia? That's quite a savings. As for those other tobacco products, smokeless tobacco is taxed at a rate of 210 percent of wholesale cost, while cigars and smoking tobacco are taxed at 40 percent of wholesale cost. Pennsylvania doesn't tax such products at all. Smuggling may be a problem for tax-hungry state officials, but it's just good sense for Massachusetts residents trying to enjoy the pleasures of life. Understandably, that high tax differential creates a lot of space for underground entrepreneurs to profit by keeping those pleasures affordable. "[O]nce taxes get far enough out of whack among states, basic economic incentives almost guarantee a thriving black market—and, eventually, an arms race between enforcement and motivated cigarette traffickers," the Boston Globe noted in a 2014 article on the illicit trade. In the seemingly inevitable way of governments everywhere, Massachusetts officials appear to have embraced that arms race rather than consider de-escalation of any sort. In particular, they point with envy to enhanced penalties and enforcement powers in Rhode Island that, among other things, "expanded investigators' authority to search the premises of tobacco dealers and suppliers at all levels of the supply chain." Hmmm… Draconian punishment and weakened search and seizure protections. What could the Task Force be getting at here? Oh wait, here it is: representatives of Connecticut and New York law enforcement invited to advise their Bay State neighbors "noted the close similarities between narcotics investigations and illegal tobacco investigations. As a result, they suggested trying to find experienced narcotics investigators (often former police officers) to be part of any tobacco investigations team." It's not only personnel. Smoke-tax enforcers advising the task force also recommended increased surveillance, use of paid informants, and undercover operations in order to target the black market created by high state tobacco taxes. In other words, enforcement of taxes on cigarettes and other tobacco products should look increasingly like decades-old efforts behind laws against marijuana, cocaine, heroin, methamphetamine and the like—prohibition efforts that have brought ever-growing demands for more law enforcement power and resources because, like efforts to stamp out cigarette smuggling, they haven't worked. "The war on drugs has been a tremendous failure," Houston Police Chief Charles McClelland admitted in October of last year at the launch of Law Enforcement Leaders to Reduce Crime and Incarceration, an effort in which he's joined by New York City Police Commissioner William Bratton, Los Angeles Police Chief Charles Beck, and Washington, D.C. Police Chief Cathy Lanier, among other criminal justice system veterans. They want to dial back harsh criminalization and lengthy sentences that have filled prisons with nonviolent offenders. They echo the call of the former cops and prosecutors of Law Enforcement Against Prohibition who have made similar—and stronger—arguments for years. Likewise, the World Health Organization considers prohibitionist policies counterproductive and now urges that "Countries should work toward developing policies and laws that decriminalize injection and other use of drugs and, thereby, reduce incarceration" and ease access to health care. WHO also favors decriminalizing sex work and homosexuality for the same reasons. Health professionals, police chiefs, and prosecuting attorneys now say that the surveillance tools, intrusive investigations, criminalization, and brutal penalties accumulated over decades of drug prohibition have been terrible and damaging mistakes. But tobacco regulators in Massachusetts and elsewhere seem to think that they'll be brilliant additions to efforts to squeeze people for taxes on their smokes. Harsh tactics may have failed to stamp out the trade in heroin and cocaine, but they’ll totally work against tobacco smugglers.
Massachusetts has a problem with cigarette smuggling—a problem, that is, from the point of view of tax collectors and government regulators. State officials have hiked tobacco taxes so high in pursuit of the twin not-so-compatible goals of enhancing revenue while also discouraging smoking that people are buying their smokes on the black market, smuggled in from low-tax jurisdictions or overseas.
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Begin Trace Mode for Comment # 35.
#1. To: Deckard (#0)
Is anyone surprised? Well, aside from all the dopers who think we should legalize marijuana and "tax the hell out of it" to raise tons of revenue.
Is anyone surprised? Well, aside from all the dopers who think we should legalize marijuana and "tax the hell out of it" to raise tons of revenue. If you think Colorado’s legalization of marijuana retail sales killed the black market, think again.
The history of Prohibition and its end shows the way; from your link: 'First, instead of cracking down on bootleggers and speakeasy operators, Gregory gave them amnesty and issued licenses to anyone willing to play by the state’s rules. Second, backed by the governor and his influence in the Senate, Gregory arranged for alcohol taxes to be set as low as any in the nation, which allowed those willing to follow the law to keep a significant amount of their profits, and it made room for legal operators to compete with bootleggers’ prices. Third, Gregory punished anyone who broke the rules—even once—with an iron fist, blacklisting them from ever making or selling alcohol in the state again. 'Predictably, this caused some turmoil in a legislature anxiously awaiting an infusion of cash from liquor sales, but the governor backed Gregory. Faced with a low cost of entry and legal profits, bootleggers and speakeasies around the state mostly turned legitimate. Meanwhile, the few remaining stragglers were quickly put out of business, and drinkers flocked to a competitive legal market. 'That might have been the end of it, but there was one more piece to Gregory’s plan. After holding down taxes—and thus prices—for three years, Gregory abruptly raised taxes so much that they were among the highest in the nation. The price of booze went up, of course, but people kept buying legal liquor and beer. There was no alternative left. Gregory had broken the back of the black market.'
Other than driving to an adjacent state and buying it there.
Other than driving to an adjacent state and buying it there. Which, by this account, few if any did.
It really didn't say, did it? The point seemed to be that this tactic was useful in shuttng down the black market in alcohol. Given the price of legal marijuana in Colorado, obviously that's not their intent. Everyone up and down the legal supply chain is looking to make a killing on "just a plant", resulting in legal marijuana being more expensive than the black market. So why you referenced it is a mystery to me.
Never attribute to malice what can be explained by incompetence - liberals seem to genuinely believe that wishes are horses. The relevance is that all Colorado would need to do to practically end the pot black market is what was done to end the alcohol black market; whether they have the sense or will to do so is another question.
Restricting all marijuana sales to state-owned stores?
Many states did not restrict all alcohol sales to state-owned stores ... but such a restriction on legal pot would still be a significant improvement over the status quo.
So you believe that state owned pot stores would put the pot pushers out of business. Can you say pipe dream?
There is no significant black market in alcohol even in state-liquor-store-only states, as far as I know.
There is a significant black market in pot in licensed-pot-stores-only California
There is a significant black market in pot in licensed-pot-stores-only California Pot in CA is legally more restricted than is alcohol in state-liquor-store- only states.
And yet the black market in it is greater. You just blew up your state-liquor-store-only model solution.
Not 'mine', liar: "Many states did not restrict all alcohol sales to state-owned stores ... but such a restriction on legal pot would still be a significant improvement over the status quo."
2. Not 'mine' Jiminy Cricket, you are pathetic.
#36. To: Roscoe (#35)
2. Not 'mine' I'm confident nobody else (with the possible exception of your little buddy) is fooled by your false dichotomy or even willing to pretend that they are. Go nip at somebody else's ankles, pee-wee.
Top • Page Up • Full Thread • Page Down • Bottom/Latest"State officials have hiked tobacco taxes so high in pursuit of the twin not-so-compatible goals of enhancing revenue while also discouraging smoking that people are buying their smokes on the black market, smuggled in from low-tax jurisdictions or overseas."
#5. To: misterwhite, Deckard (#1)
(Edited)
"State officials have hiked tobacco taxes so high in pursuit of the twin not-so-compatible goals of enhancing revenue while also discouraging smoking that people are buying their smokes on the black market, smuggled in from low-tax jurisdictions or overseas."
#7. To: Gatlin (#5)
The Failed Promise of Legal Pot.
#9. To: ConservingFreedom (#7)
"The price of booze went up, of course, but people kept buying legal liquor and beer. There was no alternative left."
#10. To: misterwhite (#9)
"The price of booze went up, of course, but people kept buying legal liquor and beer. There was no alternative left."
#11. To: ConservingFreedom (#10)
"Which, by this account, few if any did."
#12. To: misterwhite (#11)
Given the price of legal marijuana in Colorado, obviously that's not their intent.
#15. To: ConservingFreedom (#12)
The relevance is that all Colorado would need to do to practically end the pot black market is what was done to end the alcohol black market
#18. To: Roscoe (#15)
Restricting all marijuana sales to state-owned stores?
#19. To: ConservingFreedom (#18)
#22. To: Roscoe (#19)
So you believe that state owned pot stores would put the pot pushers out of business.
#29. To: ConservingFreedom (#22)
There is no significant black market in alcohol even in state-liquor-store-only states
#32. To: Roscoe (#29)
"There is no significant black market in alcohol even in state-liquor-store-only states"
#33. To: ConservingFreedom (#32)
Pot in CA is legally more restricted than is alcohol in state-liquor-store- only states.
#34. To: Roscoe (#33)
your state-liquor-store-only model solution.
#35. To: ConservingFreedom (#34)
1. There is no significant black market in alcohol even in state-liquor-store-only states
Replies to Comment # 35. 1. There is no significant black market in alcohol even in state-liquor-store-only states
End Trace Mode for Comment # 35.
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