Chicago creating great jobs… for tobacco pirates

posted at 2:31 pm on November 10, 2012 by Jazz Shaw

Way back in 2011 we took at look at a proposal by Cook County and the greater Chicago area to try to boost revenue through the tried and not very true practice of sin taxes. The government there was going to stock up their coffers by jacking up the taxes on cigarettes. This was on top of a decision by the Governor of Illinois to raise taxes one dollar per pack for the entire state. At the time I noted the warnings coming from industry analysts who said that such a move would likely not produce much in the way or revenue or significantly reduce smoking. People would simply take their business where it was cheaper, including patronizing tobacco smugglers who would see a spike in the black market. By the summer of this year I was feeling like I should buy some lottery tickets, since my predictions looked pretty good.

Cigarette smuggling on the rise as taxes skyrocket

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.

With Chicago, Cook County, and Illinois taxes all included, smokers now pay $4.66 a pack in taxes in Chicago. That’s the second-highest cigarette tax in the nation, trailing only New York City at $5.85. People looking to make quick cash don’t need to travel far to buy cheap cigarettes. Indiana’s tax is just $0.995 a pack, and Missouri’s tax is the lowest in the country at just $0.17. Chambers says cigarette smuggling is now as lucrative as drug smuggling, with much lower penalties.

At least Chicago has taken note of the problem. And having seen the results of this poorly planned and even more disastrously executed scheme, they are clearly ready to put a solution in place. Since the old plan didn’t work, clearly we should… raise the tobacco tax rate even higher. (Emphasis mine)

Cook County Board President Toni Preckwinkle’s proposed $1-a-pack cigarette tax increase won first-round approval by the county board’s Finance Committee — a committee that all 17 commissioners sit on, leaving little doubt it will be approved as part of the larger 2013 budget package.

The hike, scheduled to kick in March 1, will push the combined tax on a pack of cigarettes to $6.67 in Chicago — the second-highest in the nation behind New York City at $6.86.

While some are concerned that smokers will go over the border for cheaper smokes, Preckwinkle isn’t concerned.

And why should she be concerned? I mean, it’s not like it’s already happening on a daily basis, sapping their law enforcement resources and turning citizens against each other, driving traffic down at local small businesses and boosting the payroll of known criminal gangs, is it? Oh, wait… it is.

Either way, it’s too late now. The tax hike was already approved. But hey… it’s just got to work this time, right?


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Ah, the blessings or prohibition! (And yes, I realize it’s technically legal, but there’s a reason we say that something is “prohibitively expensive”.)

Tzetzes on November 10, 2012 at 2:33 PM

Al Capone redux.

Mark1971 on November 10, 2012 at 2:33 PM

Don’t forget extra local taxes for the city of Chicago. In the year or so that I lived there I saw the price go from below $9.00 to a little above $10.00. At that point I had a friend from Delaware (no state taxes) mail me a couple cartons at a time.

Ian on November 10, 2012 at 2:37 PM

The beatings will continue until morale improves.

I just wonder how much the smugglers are giving to the commissioners.

rbj on November 10, 2012 at 2:38 PM

It’s Chicago.

This isn’t about government revenue or behavior modification, the vast majority of the pols who voted for this will no doubt be getting campaign contributions from certain…entrepreneurs.

CorporatePiggy on November 10, 2012 at 2:43 PM

Let’s Move!!

Just imagine this in healthcare, nutrition, energy industry, the auto industry, the stock market, banking, education, construction, and on and on and on.


Thank you TEATERS.

Where we’re all about to be Beyonce’d.

http://www.latimes.com/entertainment/gossip/la-et-mg-beyonce-election-tumblr-instagram-mitches,0,2077768.story

PappyD61 on November 10, 2012 at 2:49 PM

The economic illiteracy knows no bounds.

No understanding of cause and effect, unintended consequences, or human nature. They think they can just pass a law and the world will obey.

Charlemagne on November 10, 2012 at 2:52 PM

Has anyone stopped to think that the very people passing these laws could be involved with the smuggling activities? If you raise the tax even higher it makes for more profit for bootleggers..

rich8450 on November 10, 2012 at 2:56 PM

PappyD61 on November 10, 2012 at 2:49 PM

But it’s the socon’s fault. Get with the program pappy.

chemman on November 10, 2012 at 3:02 PM

Chicago creating great jobs… for tobacco pirates

The Black Market (is it racist’s to mention the Black Market?) exists anywhere something either is prohibited by law, or taxed to heavily. That is just the way it is, the way it has always been and the way it always will be.

Requiem for the Mainstream Media, All hail the New Media.

SWalker on November 10, 2012 at 3:05 PM

Let it burn…

… all of it.

Seven Percent Solution on November 10, 2012 at 3:07 PM

rich8450 on November 10, 2012 at 2:56 PM

Yes. I made that point above.

It has always been the Chicago way.

The machine needs to be fed.

There’s always dirty money in politics, especially at the local level. It’s just that Chicago elevated the acquisition, cleaning, and distribution of it into an art-form.

CorporatePiggy on November 10, 2012 at 3:08 PM

If you raise the tax even higher it makes for more profit for bootleggers..

Maybe those elected who raise the taxes are getting a kick-back from the bootleggers? Sure would not surprise me one bit?
L

letget on November 10, 2012 at 3:10 PM

I’m gonna move to a border town and open a cigarette shop. Cha-ching!

MikeknaJ on November 10, 2012 at 3:10 PM

Let it burn…

… all of it.

Seven Percent Solution on November 10, 2012 at 3:07 PM

#Revenge

JPeterman on November 10, 2012 at 3:17 PM

PappyD61 on November 10, 2012 at 2:49 PM

But it’s the socon’s fault. Get with the program pappy.

chemman on November 10, 2012 at 3:02 PM

Heh. Socon davidk takes full responsibility.

davidk on November 10, 2012 at 3:18 PM

I’m gonna move to a border town and open a cigarette shop. Cha-ching!

MikeknaJ on November 10, 2012 at 3:10 PM

Just fill your truck and park at the rest area just across the state line. Gotta think about the overhead.

davidk on November 10, 2012 at 3:20 PM

Welcome to TEATERMERICA!

Oddly enough it’s starting to look like the term of Woodrow Wilson. But he wasn’t smart enough a hundred years ago to have 1/2 the country on the teat like this President is.

Now in 2012 as long as peoples got their Obamaphones and a flat panel and their food stamps and rental subsidy and China keep payin foh it it’s all good. Take the country Baracka just keep the freebies flowins.

***and sadly……the gop is so pathetic they can’t defeat it at the polls.

PappyD61 on November 10, 2012 at 3:21 PM

Remember when we had a President that wanted to bring out the best in America?

http://www.youtube.com/watch?v=6ZHMsivjr04

Actually I do.

http://www.youtube.com/watch?v=eEIqdcHbc8I

PappyD61 on November 10, 2012 at 3:24 PM

They are 8-10 buck a pack here in Hawaii.
And what is funny is that so many of these people here that smoke are on welfare, EBT etc.

Fn blows my mind.

esnap on November 10, 2012 at 3:27 PM

Former Cook County Board President Todd Stroger and his cronies on the county board were responsible a less than three years ago for giving Cook County the LARGEST sales tax anywhere in the United States. That means not just cigarettes, but food, gasoline, retail, movie theater tickets, you name it, everything in Cook County is ridiculously priced through the roof. The ironic, but not surprising thing, is that the county is still in a money crunch, which is why people who live in the county will travel outside of Cook into the adjoining counties of Will, Dupage, and McHenry, or even just go across the border into Indiana to purchase things, again because of the idiotic high sales tax in Cook.

Since then, Stroger is no longer board president, and the current president has been trying whatever she can to get the sales tax rescinded. Problem is the tax is written in such a way as it will be at least another couple of years to get rid of the damned thing.

Welcome to the wonder world of politics in Illinois!

pilamaye on November 10, 2012 at 3:29 PM

Welcome to TEATERMERICA!

PappyD61 on November 10, 2012 at 3:21 PM

http://legalinsurrection.com/wp-content/uploads/2012/11/O-Santa-590-LI.jpg

davidk on November 10, 2012 at 3:31 PM

I’m gonna move to a border town and open a cigarette shop. Cha-ching!

MikeknaJ on November 10, 2012 at 3:10 PM

Just fill your truck and park at the rest area just across the state line. Gotta think about the overhead.

Seems Missouri has passed a cig tax as well of 73 cents per pack and a 25% increase in “you roll it” tobacco product taxes. Even so, it isn’t as much as Illinois tax. I am seriously thinking of setting up some shops along the Missouri/Illinois border and make a nice bundle while providing cheaper products for Illinois folks.

I’m also thinking of making part of the shops into a gun parts sales area which will be through the roof as well. It’s a shame that such kinds of business will be about the only to be successful in an Obama admin. I am betting though that democrats will try to do what they can to pass taxes to tamp down on both kinds of business.

Ronaldusmax on November 10, 2012 at 3:34 PM

Why stop at 6+buck a pack tax, go all in…and LET.IT.BURN.

NY Conservative on November 10, 2012 at 3:37 PM

I want to see every faux eyeglass/skinny jeans wearing hipster in tears as he weighs “Pabst” or “Camels” while looking at his empty wallet.

NY Conservative on November 10, 2012 at 3:39 PM

KIRSTEN POWERS

Excise taxes and a bad economy used to result in unpopular governments. Poor King George III and President Herbert Hoover.

Unfortunately, there is little connection anymore between high taxes and a bad economy and human suffering. The rich cause human suffering and need to pay their “fair share”.

Somebody should report the idiotic things she says to Rupert Murdoch.

The latest was today at 207 PM on the show Newswatch where she stated that “…he (Obama)..defied history..” in a discussion where she and the other female declared that the media did not toss elections to the Democratic party.

I think she meant something about winning an election with a lousy economy and high unemployment. It is hard to tell since some people think he can deify anything, including sinking if he stepped on water. History yields another leader like that — FDR!

Well Kirsten, when the bad economy is blamed on other people and you are treated as a struggling leader against all odds you can bet that the voters will like you (see FDR) even when things stay bad. Moreover, when most of the population is happy to live on unemployment (if they have to)without any stigma, you are not really deifying anything by letting the country recover slowly.

The icing is if you promise more goodies and soaking the thieving class and ethnic group that has been stealing and ruining everything. You get “revenge” for the pain of poverty.

The poor will go for a bigger pie but you have to show them. Mitt did not do show and tell. The media does it for the liberals every day.

IlikedAUH2O on November 10, 2012 at 3:40 PM

I want to see every faux eyeglass/skinny jeans wearing hipster in tears as he weighs “Pabst” or “Camels” while looking at his empty wallet EBT card.

NY Conservative on November 10, 2012 at 3:39 PM

Redaction.

davidk on November 10, 2012 at 3:42 PM

Welcome to the wonder world of politics in Illinois!

Why does anybody still live there? I would have packed up and moved out years/decades ago.

Theophile on November 10, 2012 at 3:50 PM

And if it doesn’t work, DO IT AGAIN!

GarandFan on November 10, 2012 at 3:52 PM

In contrast, black women had higher abortion rates and ratios than white women and women in the other races category.

http://www.cdc.gov/mmwr/preview/mmwrhtml/ss6015a1.htm

Some stats show “white” women with a much higher rate than black women, but those stats include hispanic women.

davidk on November 10, 2012 at 3:59 PM

On the issue of IL, jackson jr is in a pickle? IIRC, didn’t he win re-election? Now what, a new election or will the governor appoint someone?

http://chicago.cbslocal.com/2012/11/09/former-u-s-prosecutor-negotiating-plea-deal-for-jackson-jr/
L

letget on November 10, 2012 at 4:00 PM

^ sorry didn’t read the whole thing on replacement of jackson
L

letget on November 10, 2012 at 4:03 PM

It’s not just Chicago and it’s not just tobacco but it’s pretty much all Obama. It’s no secret that when taxes go up, government revenues go down because the underground cash and barter economy kicks in. And it’s not just black market either. Already Obamacare has a lot of companies issuing W9 forms and forcing people to sign IC agreements as independent contractors to avoid health care and other taxes such as contributory Social Security, Unemployment Compensation, overtime, sick and holiday pay, etc etc etc). Foreci9ng people to be ICs is illegal in most state because it’s against Public Policy-but who’s going to complain when jobs are scarce.PS-in order for the government to put a stop to this-you know the routine-hiring thousands of GDP-robbing federal investigators-then all the companies have to do is contract out to Mexico or illegal aliens oir close shop or move overseas altogether.

When will these fools ever learn? Never!

MaiDee on November 10, 2012 at 4:07 PM

Democrats doubling down on stupid; whoda thunk it? 10% unemployment and $6/gallon gasoline coming to a city near you soon! Thank a liberal today.

College Prof on November 10, 2012 at 4:14 PM

We should become more like Europe: a quarter to almost half the real economy in many Mediterranean countries is off the books. There comes a time when people stop cooperating with government and then our betters start to wonder why everything seems to be going downhill.

Laurence on November 10, 2012 at 4:39 PM

Zombie Al Capone “Better yet ban cigarettes!”

Caper29 on November 10, 2012 at 4:58 PM

Democrats are incredibly stupid. But you have to say this about them: they are also obnoxious.

I can handle stupid in someone who is pleasant and has some positive character traits- Forrest Gump comes to mind.
But someone who is essentially retarded and sociopathic, yet who somehow manages to be arrogant and condescending- now that’s just intolerable- I’m thinking Barack Obama here, but you could pretty much fill in the name of virtually any Democrat or Liberals.

justltl on November 10, 2012 at 5:00 PM

Organized crime and Chicago government are somewhat comrads in arms anyway. I wonder if the mob contributes to the politicians who keep improving their business?

KW64 on November 10, 2012 at 5:01 PM

Couldn’t agree with you more, justltl.

Alana on November 10, 2012 at 6:35 PM

The first time that the Peoples Republik of Illinois jacke up the sales tax on cigarettes, the state posted signs on every four lane road leading to Indiana, “bootlegging” is illegal, and posted Illinois state troopers regularly on these same roads.

I’m waiting for the intimidation to return.

southsideironworks on November 10, 2012 at 7:14 PM

Organized crime and Chicago government are somewhat comrads in arms anyway. I wonder if the mob contributes to the politicians who keep improving their business?

KW64 on November 10, 2012 at 5:01 PM

This is the only real reason to raise the taxes. Its called a cartel. You know this legislator is getting millions in cash to keep this farce up. This person needs to be removed, permanently.

orbitalair on November 10, 2012 at 7:27 PM

http://www.breitbart.com/Big-Government/2012/11/09/Planned-Parenthood-Head-Urges-GOP-to-Rid-Itself-of-Pro-Life-Base

They don’t need to do that. I’m already gone.

davidk on November 10, 2012 at 4:06 PM

It’s a moot point now anyway. The GOP barely gave the anti-abortion voters more than a few scraps at election time, and with the economy crumbling the issue will be off most people’s radar in the first place.

MelonCollie on November 10, 2012 at 8:08 PM

Forget it, Jake.
It’s Obama-Stan.

connertown on November 10, 2012 at 8:28 PM

Where’s the Bureau of Alcohol TOBACCO and Firearms?

Oh, that’s right. They’re only concerned with the F now.

Dunedainn on November 10, 2012 at 11:47 PM

Obama is a socialist sociopath.

The correction from 2008 to 2012.

profitsbeard on November 11, 2012 at 2:24 AM

Where’s the Bureau of Alcohol TOBACCO and Firearms?

Oh, that’s right. They’re only concerned with the F now.

Dunedainn on November 10, 2012 at 11:47 PM

Alcohol is legal, Tobacco is legal, and Firearms are legal. The AFT not so much. I have no idea why this rogue organization exists.

Dasher on November 11, 2012 at 10:47 AM

In August 2006, the Lord had this — among many other things — to say to and about America: “O nation of fools and madmen….”

That pretty well sums up the participants in this latest foolish exercise, does it not? Who can say it better than God?

By the way, the above quote came from “Ruinous Times,” a message He gave to my wife Julie on 27 August 2006. He hasn’t changed His mind, and ruinous times continue to occur. And more — MANY more — are on the way. Hope you have ears to hear.

Gordy on November 11, 2012 at 11:12 AM

SMOKERS: Buy an $80 electric rolling machine, empty (light) filter tubes, and (light) PIPE tobacco. 90 cents per pack vs. $6.50.
And it tastes like a REAL cigarette – the way they used to make them.
I still like my Partagus, Cohiba, and Macanudo cigars though the taxes are outrageous.
~(Ä)~

Karl Magnus on November 11, 2012 at 12:15 PM

This doesn’t even take into account that you still pay SALES taxes on top of it. This has become a national joke and is leading what would be otherwise law abiding citizens into the hands of gangs and organized crime. Wasn’t the whole reason that states took over street numbers and called them the lottery was because it was impossible to stop? Also,what about prisons? Many state have outlawed smoking in prison with the result that tobacco now goes for upwards of $1600 an ounce in prison. On top if that people are having time added to the sentences because they are caught with a cigarette, contraband, in their cells. It’s lunacy.

It’s time for another amendment. A tax on a legal product should not exceed the MSRP. To do so is simply inviting inviting a black market.

Rocks on November 11, 2012 at 6:15 PM