The Tobacco Pirates

posted at 8:31 am on July 28, 2012 by Jazz Shaw

Earlier this year we took a brief look at Illinois Governor Patt Quinn’s inspired and sure-fire plan to ease his state’s fiscal woes on the backs of smokers by raising the taxes on cigarettes. Estimates as to how much money this would bring in ranged from modest sums in the mere millions to roughly the national debt. It couldn’t miss.

With some time having passed to let the cash cow fatten, we should check back in and see what the fine citizens of the Land of Lincoln are doing with their new found largesse. I do hope they’re not all getting fat and lazy now that all of the state’s fiscal problems have been solved. Ahhh… happy days.

When Illinois Gov. Pat Quinn signed a bill adding another dollar a pack to the state’s cigarette tax, law enforcement leaders knew they had their hands full.

John Chambers, head investigator for the Illinois Department of Revenue, says cigarette smuggling now rivals illegal drug smuggling, and street gangs are getting involved.

“Keep in mind this is very similar to drug activity, smuggling drugs, and there could be concealed compartments, false floors in the bed of a truck, much like drugs, all packed with cigarettes,” Chambers said.

In Cook County, the tax on smokes is now $4.66 a pack. In Indiana it’s $0.995. Missouri checks in at $0.17. Who could possibly have seen this coming?

In a recent study, University of Illinois at Chicago professor David Merriman found 75 percent of cigarettes in Chicago didn’t have the proper tax stamps. He says the most recent increase will likely have a big impact along state lines.

“For the ordinary everyday smoker, many of them have already found ways to avoid the tax. I think it’s going to be a much bigger issue in areas where the state border makes it a big difference,” Merriman said.

A clerk at a tobacco shop in Hammond, Ind., less than a mile from the state line, says business has doubled since the latest increase began at the end of June.

So you tried to wipe away your spending problems by raising taxes. To compound the issue, you did it under the cover of attempting to regulate personal behavior by government tax policy to discourage it. I guess this has turned into a real teachable moment, eh?

But don’t let that stop you. Illinois can always jack up the taxes on alcohol to make up the shortfall from this experiment. I mean, it’s not like any of the tobacco pirates would be such scofflaws as to drive drunk as they transport their untaxed Marlboros back across state lines, right?


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