Focus Point - Governmental DopinessCommentary by Pete du Pont
May 19, 2000
I'm Pete du Pont with the National Center for Policy Analysis. Today, an object lesson in governmental dopiness.
On March 1, New York State raised its cigarette tax by 55 cents, making it the highest in the nation. In New York City, the tax is even higher. The predictable result? A massive increase in cigarette smuggling and a crimp in efforts to reduce teen smoking. And New York officials' response? Raising taxes even more, despite ample evidence that heavy taxes actually reduce cigarette tax revenue. So now there's more smuggling and the hijacking of cigarette trucks, which is more profitable these days than robbing an armored car.
Thanks to the tax increase, legitimate cigarette sales at New York convenience stores have plummeted. Many smokers are apparently buying from Indian reservations, which sell cigarettes tax-free over the Internet.
Interstate smuggling of cigarettes is a federal crime. But since the bureau of alcohol, tobacco and firearms has never devoted significant resources to cigarette smuggling, there's been a net reduction in enforcement efforts. So crime and cheating go up. All thanks to a mindless tax that went up too.
Those are my ideas, and at the NCPA we know ideas can change the world. I'm Pete du Pont and I'll see you next time.