Mexican cartels now trafficking … cigarettes?

posted at 5:31 pm on September 1, 2012 by Jazz Shaw

Those Mexican crime syndicates certainly find their way into the news a lot, don’t they? When they’re not running guns from American government sources, kidnapping children for prostitution or shipping tons of cocaine and marijuana through tunnels they’re busy corrupting the government. But it seems that now they’ve found yet another avenue of profit, and just like in many states in the USA it popped up after the government decided to jack up the tax rate on smokes.

A Mexican industrial group said Tuesday an increase in tax on cigarettes that went into effect in 2011 has led to a proliferation of contraband, and that illegal cigarettes now account for nearly 17% of the cigarettes sold in the country.

The Confederation of Industrial Chambers, or Concamin, said tobacco consumption hasn’t declined in the year-and-a-half since the higher tobacco tax took effect, although the sale of illegal cigarettes has reached record levels.

Congress approved the higher tax on cigarettes in late 2010 despite protests from the country’s cigarette manufacturers

The new tax has a pack of smokes in Mexico going for an average of 35.5 pesos (currently $2.69 US) as compared to 20.5 pesos ($1.69) on the black market. And as more and more buyers flee to the cartels for their fix, the result is pretty much the same as we’ve seen in Illinois and New York – among other states. The anticipated tax boom fails to materialize in the government’s coffers and instead winds up financing criminal endeavors.

But this may not be bad news for everybody. As we’ve discussed before, there are a couple of international agencies who are very interested in seeing cigarette taxes go up around the world, primarily so they can get a cut of the action. They are the United Nations and the World Health Organization. They’ve made some progress already in the Philippines and would like to expand well beyond that. But as this study from Freedom and Prosperity shows, this would probably be a great idea for the W.H.O but a big loser for everyone else.

Since the bureaucrats running international organizations are not elected, such indirect control is the only way for national governments – on behalf of their taxpayers – to oversee the responsible use of funds.

This is why it would be imprudent to give international bureaucracies an independent source of revenue. Not only would this augment the already considerable risk of imprudent budgetary practices, it would exacerbate the pro-statism bias in these organizations.

Moreover, the first incidence of direct taxation to fund an international organization would unleash a tidal wave of similar direct-funding proposals. The camel’s nose would soon become an entire animal, then followed by a herd.

It’s a disturbing trend. But the good news is that it can’t be put into place here in the United States without the complicit help of the Congress. And they’d never go for that… right?


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Let`s legalize cigarettes! I mean, that`s what all the pot heads say will stop these guys, right?

ThePrez on September 1, 2012 at 5:35 PM

If Mrs. Obama and Mayor Bloomberg get their way, we will soon have trafficing in french fries and other food which they deem unhealthy and try to have banned or severely limited or regulated. Perhaps we will have food cartels instead of drug cartels.

lukjuj on September 1, 2012 at 5:36 PM

Let me guess….another DoJ (and wouldn’t ya know it, the ATF) program is allowing cigarettes to be walked across the border…

Needin’ some help with the cool fake scandal name here…..

BobMbx on September 1, 2012 at 5:39 PM

Perhaps we will have food cartels instead of drug cartels.

lukjuj on September 1, 2012 at 5:36 PM

Wait for the air cartels.

BobMbx on September 1, 2012 at 5:39 PM

At 55-85 a carton, what’s not to understand?

Limerick on September 1, 2012 at 5:41 PM

Unintended consequence #6237….

Any attempt to change behavior through (over)taxation will always result in less tax revenues.

HoustonRight on September 1, 2012 at 5:41 PM

narcotraficantes nicotraficantes

de rigueur on September 1, 2012 at 5:47 PM

OT:

Update to Pic Of The Day: awwwww, darn.

BobMbx on September 1, 2012 at 5:47 PM

BobMbx on September 1, 2012 at 5:39 PM

Operation Huff-N-Puff.

or

Operation Smoke-N-Butts.

???

thatsafactjack on September 1, 2012 at 5:48 PM

Well, we’ll see… The murder of Brian Terry didn’t seem to faze anyone in the bozo admin – but let’s see if the pilfering of TAX revenues elicits any reaction.

Harbingeing on September 1, 2012 at 5:53 PM

Somewhat OT, but one thing I think that needs to be done is to force people on Medicaid to switch to Electronic Cigarettes and Snus.

ninjapirate on September 1, 2012 at 5:54 PM

BobMbx on September 1, 2012 at 5:47 PM

Washed up AND washed out…nice

thatsafactjack on September 1, 2012 at 5:48 PM

Now THAT’S funny!!

HoustonRight on September 1, 2012 at 5:54 PM

Needin’ some help with the cool fake scandal name here…..

BobMbx on September 1, 2012 at 5:39 PM

Walking Winstons?

Rolling Paper?

Lucky Strike?

de rigueur on September 1, 2012 at 5:54 PM

And they’d never go for that… right?

They passed ObamaCare, didn’t they?

jaime on September 1, 2012 at 5:54 PM

The government did help build that!

rdbrewer on September 1, 2012 at 5:58 PM

I saw that coming and posted about it in several places. Just like with what happened with prohibition of alcohol when you attempt to make the cost of cigarettes far beyond the actual cost to produce them through taxes, organized crime is going to circumvent those taxes.

You can pay $6 for a pack of cigarettes in California that took less than $1 to produce. Besides going to the various Indian reservations to buy them, people are buying under the table cigarettes. Soon they will be growing and curing their own tobacco which they can grow in their own back yards.

crosspatch on September 1, 2012 at 6:00 PM

Unintended consequences of government

darwin on September 1, 2012 at 6:02 PM

Since they can’t offer anyone self-indulgent restrictions put on their neighbors or dreams of a society run by the largess given to their friends, it is difficult for small government folks to get elected.

I can’t imagine a circumstance which would lead to Libertarian rule.

The constant growth of government, like free flowing heroin, is all too easy to see.

IlikedAUH2O on September 1, 2012 at 6:05 PM

crosspatch on September 1, 2012 at 6:00 PM

I am not surprised and have been waiting for it to.

I think in NY..they are like $10-$12 a pack?

bazil9 on September 1, 2012 at 6:07 PM

So we raise taxes on cigarettes because we want less of them. So why would we raise taxes on income?

trubble on September 1, 2012 at 6:10 PM

thatsafactjack on September 1, 2012 at 5:48 PM

HA.

Hey..left you a message at B’s. :) Good to see ya.

bazil9 on September 1, 2012 at 6:16 PM

Let`s legalize cigarettes! I mean, that`s what all the pot heads say will stop these guys, right?

ThePrez on September 1, 2012 at 5:35 PM

That’ll leave a mark.

davidk on September 1, 2012 at 6:18 PM

So we raise taxes on cigarettes because we want less of them. So why would we raise taxes on income?

trubble on September 1, 2012 at 6:10 PM

Heh.

davidk on September 1, 2012 at 6:18 PM

…so when will they start growing their own?

KOOLAID2 on September 1, 2012 at 6:20 PM

SORT OF OT :

ICE Chief of Staff resigns

pambi on September 1, 2012 at 6:26 PM

OT:

Update to Pic Of The Day: awwwww, darn.

BobMbx on September 1, 2012 at 5:47 PM

Tweets David Burge‏@iowahawkblog

Castles made of sand / fall into the sea / eventually. – Jimi Hendrix

davidk on September 1, 2012 at 6:26 PM

When will the cartels start shipping in trans-fat and salt, the Feds will really go after them as “those” kill more than illegal drugs or something.

Over in Quebec someone stole tons of maple syrup, the cartel took them to avoid the sales tax and sell it out the back of a truck. There is just so much that one can steal to sell for scrap value.

tjexcite on September 1, 2012 at 6:26 PM

Q: How many d-cRAT socialist extremists and their moronic Repub establishment pals will learn the REAL lesson from this THAT INCREASING TAXES IS NEVER A GOOD THING ?

A: NONE, ZERO, ZIP, al “race-baiter” sharpton’s IQ, ZILCH, dingbat pelosi’s “likability” rating, The NULL Set, NADA, FURGETABOUTIT…

TeaPartyNation on September 1, 2012 at 6:26 PM

If I lose my job I’m considering going into cigarette smuggling… From my low tax state to the communist states…

wildcat72 on September 1, 2012 at 6:31 PM

THAT INCREASING TAXES IS NEVER A GOOD THING ?

TeaPartyNation on September 1, 2012 at 6:26 PM

Well, a three ocean Navy might be useful at some point, and I could choke that back. There are reasons, and there are reasons, and there is bunkeritis.

Limerick on September 1, 2012 at 6:33 PM

The anticipated tax boom fails to materialize in the government’s coffers and instead winds up financing criminal endeavors.

The way government has been acting lately, would it finance criminal endeavors any less if it all went to government’s coffers?

MessesWithTexas on September 1, 2012 at 6:33 PM

Is I95 still Tobacco Road? Back in the 70s it seemed like cops were always busting trucks running cigarettes from North Carolina and Virginia to places like NYC.

CC Senor on September 1, 2012 at 6:34 PM

CC Senor on September 1, 2012 at 6:34 PM

It runs the LA, MS, MO, Indiana line mostly now. Most States have grabbed onto the SinTax addiction.

Limerick on September 1, 2012 at 6:37 PM

How long before the cartels, will start smuggling 24 oz. Big Gulps, into NYC???
and maybe, just maybe …some salt shakers while they are at it…

Bwhahahahahaha

Huckleberry Mike on September 1, 2012 at 6:38 PM

Huckleberry Mike on September 1, 2012 at 6:38 PM

Hmmmmmmmmmmm…there might be a fortune to make on 64oz lids!

Limerick on September 1, 2012 at 6:41 PM

Sooooooooooooooo,speaking of Mexico,er Immigration…..Le Oops!

Sep 1, 6:03 PM EDT
ICE chief of staff resigns amid misconduct claims
**************************************************

WASHINGTON (AP) — A senior Obama administration political appointee and longtime aide to Homeland Security Secretary Janet Napolitano

resigned Saturday
*****************

amid allegations of inappropriate sexual behavior
***************************************************

lodged by at least three Immigration and Customs Enforcement employees.
***********
(le more….)
=============

http://hosted.ap.org/dynamic/stories/U/US_ICE_SEXUAL_MISCONDUCT?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-09-01-16-26-05

canopfor on September 1, 2012 at 6:46 PM

Here is an idea. Smuggle Romper Room in back at them!

Limerick on September 1, 2012 at 6:47 PM

Canofor….return our Maple Syrup….now!

Limerick on September 1, 2012 at 6:50 PM

The Cartel picks up those illegal cigarettes from Princess Sitting Bullshat’s reservation in Cambridge.

bayview on September 1, 2012 at 6:57 PM

The UN has already figured out ways to levy taxes here in the US and they’ve been doing it for a while now.

trigon on September 1, 2012 at 7:12 PM

Whats this? Impossible! Ive been -assured- by liberals, libertarians, and the like that if a product is legalized, cartels will stop traffiking them!

p00pies on September 1, 2012 at 7:12 PM

So we raise taxes on cigarettes because we want less of them. So why would we raise taxes on income?

trubble on September 1, 2012 at 6:10 PM

No, the desire it to raise income taxes on those who are financially successful.

/oh, wait

AZfederalist on September 1, 2012 at 7:17 PM

I never quite understood the us government actions concerning tobacco. If I’m a vender I pay the government for opportunity to sell cigarettes. If I’m a consumer I pay huge taxes to use tobacco. If I’m the government I sue companies for making and marketing the product.

jaywemm on September 1, 2012 at 7:19 PM

Wheezing ‘n Furious?

RoadRunner on September 1, 2012 at 7:28 PM

OT:

Update to Pic Of The Day: awwwww, darn.

BobMbx on September 1, 2012 at 5:47 PM

Hahahahahaha! Just saw this. Hilarious. Bad omen, indeed.

PatriotGal2257 on September 1, 2012 at 7:28 PM

Needin’ some help with the cool fake scandal name here…..

BobMbx on September 1, 2012 at 5:39 PM

F@gs and Fabulous

The Rogue Tomato on September 1, 2012 at 7:44 PM

Let`s legalize cigarettes! I mean, that`s what all the pot heads say will stop these guys, right?

ThePrez

In other words, you didn’t read the article, did you?

That’ll leave a mark.

davidk

Only on himself, as he(and you too apparently) showed he either didn’t read the article, is intellectually dishonest, or is not too bright. Possibly all three, but I’ll give him the benefit of the doubt and assume it’s only one.

xblade on September 1, 2012 at 7:52 PM

xblade on September 1, 2012 at 7:52 PM

Funny, with a nom de plume like that, you sure aren’t the sharpest knife in the drawer are you?

AZfederalist on September 1, 2012 at 8:05 PM

1) Increased costs lead to smuggling. Who knew?

2) This proves that raising taxes does not equate to raising revenues.

3) The way to raise tax revenue on cigarettes is to be the place everybody wants to smuggle from. What to do..what to do?

ss396 on September 1, 2012 at 8:14 PM

1) Increased costs lead to smuggling. Who knew?

ss396 on September 1, 2012 at 8:14 PM

“xbox” was already taken?

Kenosha Kid on September 1, 2012 at 8:29 PM

Duh wrong quote:

Funny, with a nom de plume like that, you sure aren’t the sharpest knife in the drawer are you?

AZfederalist on September 1, 2012 at 8:05 PM

K?

Kenosha Kid on September 1, 2012 at 8:30 PM

Let`s legalize cigarettes! I mean, that`s what all the pot heads say will stop these guys, right?

ThePrez on September 1, 2012 at 5:35 PM

ROTFLOL! Oh man, they’d better get some lotion for that burrrn!

Funny, with a nom de plume like that, you sure aren’t the sharpest knife in the drawer are you?

AZfederalist on September 1, 2012 at 8:05 PM

Xblade the libtard is like a worn knife with the tip broken. In other words, dull and doesn’t have a point.

MelonCollie on September 1, 2012 at 8:55 PM

Operation Coffin Nail

right of the dial on September 1, 2012 at 9:42 PM

Let`s legalize cigarettes! I mean, that`s what all the pot heads say will stop these guys, right?
ThePrez on September 1, 2012 at 5:35 PM

My first thought exactly. So much for the “make it legal and tax it, that’ll stop organized crime, it will!” line.

whatcat on September 1, 2012 at 10:18 PM

My first thought exactly. So much for the “make it legal and tax it, that’ll stop organized crime, it will!” line.

whatcat on September 1, 2012 at 10:18 PM

Goes to show that “if you can’t beat ‘em, join ‘em” is a piss-poor approach to law enforcement. Take note, libertarians.

I mean, really, can you imagine where that line of logic would eventually end up? Not to mention the laughability of trying to collect taxes from people who despise the law and everything it stands for. You wouldn’t even get more than a miserly share of dane-geld, and that in return for basically surrendering to the criminal element.

That is one !@#% lousy bargain, folks, and I for one will not make it.

MelonCollie on September 1, 2012 at 10:49 PM

That is one !@#% lousy bargain, folks, and I for one will not make it.
MelonCollie on September 1, 2012 at 10:49 PM

What seems an absurd and insane line of reasoning to me is the notion that criminals will stop being criminals just because something is legal and taxed. Its like claiming that since IPads are legal and taxed, you can’t get them “hot” at a lower price.

whatcat on September 1, 2012 at 10:59 PM

That is good news.

May be now finally they will build that wall because lets face it, thise smuggled cigs mean less tax money and less money for those politician clowns. THAT must be a reason for them to get into action!

huntingmoose on September 1, 2012 at 11:34 PM

My first thought exactly. So much for the “make it legal and tax it, that’ll stop organized crime, it will!” line.

whatcat on September 1, 2012 at 10:18 PM

There is a bit of backwards thinking going on here. Cigarettes are being smuggled because of punitive taxes that have artificially inflated them far above their true market value. If cigarettes were to be sold nationwide at their fair market price, most (if not all) of that smuggling would cease.

I think it’s ironic that many conservatives here fail to see the obvious point that once again government over-regulation has created yet another opportunity for criminal enterprise to line it pockets. If you don’t like the thought of legalizing drugs, that’s fine, but don’t use cigarette smuggling as an excuse as it makes you look foolish.

JFS61 on September 2, 2012 at 12:46 AM

I think it’s ironic that many conservatives here fail to see the obvious point that once again government over-regulation has created yet another opportunity for criminal enterprise to line it pockets. If you don’t like the thought of legalizing drugs, that’s fine, but don’t use cigarette smuggling as an excuse as it makes you look foolish.
JFS61 on September 2, 2012 at 12:46 AM

Right, let’s make meth-making & marketing legal, regulated and taxed – that’ll stop the private-enterprise totally unregulated and untaxed criminals from selling cheaper meth! Yeah, that’s the ticket!

whatcat on September 2, 2012 at 1:14 AM

Let`s legalize cigarettes! I mean, that`s what all the pot heads say will stop these guys, right?

ThePrez on September 1, 2012 at 5:35 PM

They’re getting around the tax. That’s why I say states should be allowed to legalize it but not tax it. The feds should make interstate commerce in narcotics highly illegal. That way, you know the legislature is passing it because the people want it not just to get the tax revenue (I’m looking at you, California) and you keep the prices artificially high to discourage consumption.

So we raise taxes on cigarettes because we want less of them. So why would we raise taxes on income?

trubble on September 1, 2012 at 6:10 PM

To achieve “fairness.” Duh! /

Odysseus on September 2, 2012 at 6:12 AM

Right, let’s make meth-making & marketing legal, regulated and taxed – that’ll stop the private-enterprise totally unregulated and untaxed criminals from selling cheaper meth! Yeah, that’s the ticket!

whatcat on September 2, 2012 at 1:14 AM

Not the point I was trying to make, but considering the level of discourse around here lately, I shouldn’t have been surprised by the response.

JFS61 on September 2, 2012 at 6:30 AM

Not the point I was trying to make, but considering the level of discourse around here lately, I shouldn’t have been surprised by the response.

JFS61 on September 2, 2012 at 6:30 AM

Translation: you haven’t got a good response so you’re just going to pout about ‘the level of discourse’. Boo frickin’ hoo.

In case you somehow didn’t notice, this is a (mostly) uncensored political site, and the rump-kicking your line of logic just got is pretty darn mild compared to the REAL flamefests that have gone down.

MelonCollie on September 2, 2012 at 8:33 AM

Not the point I was trying to make, but considering the level of discourse around here lately, I shouldn’t have been surprised by the response.
JFS61 on September 2, 2012 at 6:30 AM

No, I’m agreeing with your thoughtful plan. Especially the part about “If cigarettes were to be sold nationwide at their fair market price”. Because I do think at a certain point you’ve made enough money.

whatcat on September 2, 2012 at 8:37 AM

In case you somehow didn’t notice, this is a (mostly) uncensored political site, and the rump-kicking your line of logic just got is pretty darn mild compared to the REAL flamefests that have gone down.
MelonCollie on September 2, 2012 at 8:33 AM

I think the problem is that some folks just haven’t thought things through and thus have an unrealistic & unworkable idea of how things would go in the real world. Sorta like Communism – some people thought it looked really good on paper, but…..

whatcat on September 2, 2012 at 8:42 AM

I think the problem is that some folks just haven’t thought things through and thus have an unrealistic & unworkable idea of how things would go in the real world. Sorta like Communism – some people thought it looked really good on paper, but…..

whatcat on September 2, 2012 at 8:42 AM

Yeah pretty much. On this specific issue, I’ve noticed that most of the proponents I’ve met IRL are people who have no earthly idea what it’s like to live in a community that ‘recreational’ drugs and the lowlifes who sell them really have their claws into.

MelonCollie on September 2, 2012 at 8:55 AM

Yeah pretty much. On this specific issue, I’ve noticed that most of the proponents I’ve met IRL are people who have no earthly idea what it’s like to live in a community that ‘recreational’ drugs and the lowlifes who sell them really have their claws into.
MelonCollie on September 2, 2012 at 8:55 AM

I recall when George Harrison decided to check out Haight-Ashbury during the drug-driven “Summer Of Love” in 1967. He observed the druggies were all just “bums”.

whatcat on September 2, 2012 at 9:06 AM

I recall when George Harrison decided to check out Haight-Ashbury during the drug-driven “Summer Of Love” in 1967. He observed the druggies were all just “bums”.

Ah, a video of it:

http://www.youtube.com/watch?v=_I-ThafU1e4

whatcat on September 2, 2012 at 9:08 AM

prohibition and taxing exorbitantly (with the supposed intent of driving down demand) always fuels a black market. in the end it’s all about the state hoovering up more money for itself- not to help anyone with lung cancer.

when i was last in mexico mexican cigarettes were only a dollar a pack.

mittens on September 2, 2012 at 9:11 AM

MelonCollie on September 2, 2012 at 8:33 AM

Lighten up, Francis.

JFS61 on September 2, 2012 at 10:13 AM

whatcat on September 2, 2012 at 8:37 AM

Okay then.

JFS61 on September 2, 2012 at 10:15 AM

A Modest Proposal:
Tax the smugglers and their pals – the enabling American politicians.
Never Happen though.
ØbahØlder should be more interested in adhering to their job descriptions, i.e., the LAW. Their fundamental dismantling of the United States through draconian and economically clueless policies would never have reared their ugly faces in the first place.
Mo Money! …
For Øba’s “stash” so that he can continue to use it in vote-buying and for illegal wars.
Meanwhile, back at the tax-paying middle class ranch, we are getting ‘restless’.
(an understatement)
~(Ä)~

Karl Magnus on September 2, 2012 at 10:18 AM

It’s the old story of increasing taxes to increase revenue but, ironically, getting less revenue because people con the system. When I was in the Army, cigarettes in Southeast Asia were 80 cents a CARTON(90 cents a CARTON in Hawaii). In NYC today they are around $7-8.00 a PACK.

I stopped smoking in 1997 but do you think I would actually pay $70-80 DOLLARS for a carton? If I still smoked, through contacts,I would find a distribution source(ex. NC) and take my SUV there-and fill my car with hundreds of cartons-making sure I didn’t exceed any speed limits on the way back. I would also make sure that I didn’t buy directly from the distributor so that some NY agent doesn’t get my license plate.

The point I am making here is whenever a governments legislates moralistically (sugared soda, high salt food and to some degree cigarettes) or to raise revenues-abridging our life styles and enjoyment-crime increases (look at prohibition) and revenues decrease. With income tax increases, for example, you get in increases in cash agreements and barter transaction (dental bridgework for the contractor in exchange for a sun deck.)

A government tax increase is the government’s way of saying FU. The people tend to respond in kind.

MaiDee on September 2, 2012 at 7:51 PM