As predicted, New York managed to lose huge amounts of sin tax money

posted at 8:31 am on January 2, 2016 by Jazz Shaw

New Years is a good time for everyone to take stock of their performance over the past year and see what improvements might be made going forward, and this goes for states as well as individuals. Long time readers are already familiar with our repeated warnings about the use of oppressive sin taxes to fatten state government coffers and the questions which remain about the viability of such a strategy. In the Empire State in particular we’ve covered the flailing efforts of law enforcement to chase down the tobacco pirates who skirt the highest cigarette taxes in the nation. But the government keeps doubling down on the policy, insisting that they need the revenue. So how did that work out? At the New York Post, John Aidan Byrne has run the numbers and found that (surprise!) the government is seeing tax revenue plunge rather than increase.

Albany has really blown it — tax revenues from cigarettes are up in smoke.

New York state cigarette tax collections have plunged by about $400 million over the past five years, according to figures and estimates from the office of New York State Comptroller Thomas DiNapoli.

And New York has also lost $1.3 billion in uncollected state cigarette taxes each year from alternative sales, according to a separate study.

The state is taxing far fewer packs, as smokers evade taxed packs, shop across state lines or buy smokes from Native American merchants to avoid punitive NY taxes.

The first figure at the top really says it all. They’ve been either holding steady or raising the taxes on cigarettes for the past couple of decades but over the last five years – and in particularly this past year – the total revenue coming in from tobacco taxes has actually decreased by nearly half a billion dollars. Now, a sliver of that decrease came from people who quit smoking, perhaps at least in part due to the higher costs… and that’s a good thing. But assigning credit for the revenue losses in any substantial way to reduced smoking rates is unsupported by the facts. In 2014 the smoking rate among adults in New York City fell to 13.9% which is always a positive thing to see. Also, the smoking rate among teenagers has hit nearly all time lows. But the changes we’re talking about are in the range of a couple of percent. Also, the “decrease” comes in the form of gaining back a little ground after the smoking rate actually increased every year from 2010 to 2013 and we’re still nowhere near the all time low experienced in 2009.

So the real loss of revenue wasn’t seen because of vast armies of healthier people kicking the habit. As we’ve seen in too many places across the nation, New York fell victim to a massive increase in piracy. This past season the Village Voice took a spin around town and found that commercial brand cigarettes with no tax stamps on them were available virtually everywhere if you knew who to ask. And for the folks not purchasing flatly illegal, smuggled smokes, more and more people were smoking the off brand cigarettes from Native American reservations.

Meanwhile, the arrests that the cops do manage to make in their war against the smugglers manage to divert resources away from what the cops should actually be doing. Despite a number of press conferences being held last month talking about crime rates going down, specific violent crimes are actually up, both in the Big Apple and other metropolitan areas.

Despite lower crime rates in October, murder and rape are up for the year, 7.7 percent and 4.2 percent, respectively.

Other U.S. cities have also seen a jump in shootings and homicides in 2015, including Baltimore, Washington, D.C., Milwaukee, Chicago and St. Louis.

Just imagine how much lower those crime rates might be if the cops weren’t having to spend their time chasing down tobacco pirates. Sadly, we’ll probably never know since Democrats won’t let go of their sin tax loving ways, even when their own budget numbers show they’re losing money on the deal.


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Comment pages: 1 2

Funny in that used to be an uber (mutli-culti term, by the way) PC smoker .. NE resolution: f’ you all non-smokers and I will smoke where the hell I feel like AND shoot butts out the car window with impunity!

Just because you anti-smoking Nazi’s made ash trays a historic relic. Well F’ you & the hybrid you rode in on!

smokeyblonde on January 2, 2016 at 2:25 PM

Demo-rats are good at nothing so much as separating a citizen from his hard earned income.

Cleombrotus on January 2, 2016 at 8:59 AM

You didn’t build/earn that!

And as such, it is only through the benevolency of the state that you are able to keep anything.

smokeyblonde on January 2, 2016 at 2:28 PM

The money was not theirs in the first place so they didn’t lose it.

agmartin on January 2, 2016 at 12:37 PM

Ugh! My dear! But that is not the liberal mindset! Just a quick tutorial below:

Liberals: All you have belongs to us & we decide how much you keep.

Conservatives: Tell us how much you really need and we’ll supply accordingly.

And if one doesn’t get the difference, then they are amongst the first against the wall …

smokeyblonde on January 2, 2016 at 2:38 PM

Eric Garner died for your sin taxes.

myiq2xu on January 2, 2016 at 9:49 AM

The state is defined as a political entity which has a monopoly on the use of legitimate violence within a given geographical area.

Big government advocates forget the fact that GOVERNMENT IS VIOLENCE. All functions of government depend on coercion – if for no other reason than the need for coercive collection of the taxes that support it. The violence comes in when the ruled decide not to comply – such as the case of Eric Garner.

SubmarineDoc on January 2, 2016 at 2:56 PM

SubmarineDoc on January 2, 2016 at 2:56 PM

Excellent point, Subdoc!

All of government eventually ends at the point of a gun!

One must decide: oppreser or oppresee?

And from that choose accordingly…

smokeyblonde on January 2, 2016 at 3:10 PM

Funny in that used to be an uber (mutli-culti term, by the way) PC smoker .. NE resolution: f’ you all non-smokers and I will smoke where the hell I feel like AND shoot butts out the car window with impunity!

Just because you anti-smoking Nazi’s made ash trays a historic relic. Well F’ you & the hybrid you rode in on!

smokeyblonde on January 2, 2016 at 2:25 PM

Now, now, dear…you need to stop self-censoring and tell us how you really feel.

:p

Solaratov on January 2, 2016 at 3:37 PM

Smokey. Youre passion is admirable(and somewhat humorous). Two honest questions. 1) Do you deny that second hand smoke is dangerous?? and 2) do you believe that throwing cigarette butts that contain fiberglass, out a car window, is or is not littering?? Just curious…..

Indiana Jim on January 2, 2016 at 3:41 PM

Smokey. Youre passion is admirable(and somewhat humorous). Two honest questions. 1) Do you deny that second hand smoke is dangerous?? and 2) do you believe that throwing cigarette butts that contain fiberglass, out a car window, is or is not littering?? Just curious…..

Indiana Jim on January 2, 2016 at 3:41

Why thank you!

And in order:

Question second-hand smoke studies. That said:

1) Have not, will not smoke in front of a non-smoker in an enclosed space.

2) Yes, it is littering.

I’ll go you one further; 3 do cigs out the window contribute to wild fires?

3) Yes. I do,

As a smoker nowadays, one needs to be cognizant of their peers and the environment. Stupid me quantifies pollution in Manhattan vs immediate second hand smoke. And NEVER a butt out the window or anywhere else where it could cause damage.
But that’s just the PC part of me that lives in the real world where a semi in rush hour is worth 5 packs of cigs, carninogenic-wise.

smokeyblonde on January 2, 2016 at 4:07 PM

smokeyblonde on January 2, 2016 at 4:07 PM

Oh my but a bunch of garbedly-gook!

But I think you all get the idea ..

annoying others = BAD

polluting environment = BAD

endangering others = BAD

Per my count, I am way ahead of any Lib out there! :)

smokeyblonde on January 2, 2016 at 4:12 PM

Smokey. Glad we got that straightened out. :-D

Indiana Jim on January 2, 2016 at 4:14 PM

Funny in that any other context except the US – and even the majority of the US, I would be an environmental wacko! :)

The dichotomy and cognitive dissonance just cracks me up! :)

Cheers!

smokeyblonde on January 2, 2016 at 4:16 PM

I’ve always been rather Old Testament – one has a duty to oversea and manage the natural environment (even if that means leaving the heck alone!).

But as Overseers, there is an innate responsibility (ohhh! the evil R word!) to reuse resources where feasible rather than squander them.

For example: LOVE ME pigs and cows! They give us leather and steaks and other meat and BACON! and pickled pigs feet and pork roasts!

I personally pray for pigs and cows and that man is able to make the most of their sacrifice! Pigs and cows should be blessed for what they offer us and their contributions should not be wasted.

God gave Man dominion over the world for a reason and I for one am not going to f’ that up!

smokeyblonde on January 2, 2016 at 4:25 PM

Golly. I’ll bet government involvement won’t have the same affect in states where pot has been legalized.

Nope, no sir’ee. Not a’tall.

By the way, can Indians grow pot on the rez?

If not, why not – especially in states where pot is legal?

Ruckus_Tom on January 2, 2016 at 6:32 PM

My neighbors are freaking out about the open carry that just went in to effect.

cozmo on January 2, 2016 at 9:10 AM

I’m also in the DFW area am am seeing/hearing the same thing. Can’t believe the number smart people who’ve bought into the “OMG! There will be shoot-outs on every corner!” crap.

smokeyblonde on January 2, 2016 at 9:28 AM

Basically, the same people who had a shirt covering the firearm can now carry the same firearm with their shirt tucked in… like every other legal gun owner can in forty-four other states.

And yet this is supposed to bring about the Zombie Apocalypse ?

Reuben Hick on January 2, 2016 at 7:26 PM

Nonpartisan. The new year just began and youre already crapping in the punch bowl…..tool.

Indiana Jim on January 2, 2016 at 9:30 AM

To be fair, I think the whole gun industry has had about the same reaction.

Well, that and, “We’re gonna be rich!! Bonuses all around!!!”

Poor noncompetentpartisan hasn’t figured out yet that every time Obama announces another attempt to restrict guns, gun sales go higher.

There Goes the Neighborhood on January 2, 2016 at 10:28 PM

Now, a sliver of that decrease came from people who quit smoking, perhaps at least in part due to the higher costs… and that’s a good thing.

Really? How very progressive.

tdarrington on January 2, 2016 at 9:12 AM

People quitting smoking because it’s good for their health == good.

People quitting smoking because the government made it so expensive == not so good — but unusual. Most smokers trying to avoid the taxes just avoid the taxes some other way.

There Goes the Neighborhood on January 2, 2016 at 10:33 PM

Smokey. In regards to questioning second hand smoke studies. I had asthma as a child. And my asthma attacks were normally brought on and made much worse when my mom or dad started smoking in the same room i was in. Thats all the studying i needed. Puff away……..

Indiana Jim on January 2, 2016 at 10:36 PM

Now, a sliver of that decrease came from people who quit smoking, perhaps at least in part due to the higher costs…and that’s a good thing.

Really? How very progressive. tdarrington

Amen. Why is it good that the government is making it too expensive for rational people, who understand the risks, to partake in an activity they enjoy?

Fairbanks on January 3, 2016 at 12:14 AM

O/T: http://www.nytimes.com/2016/01/02/us/politics/obama-to-consider-executive-actions-on-gun-violence.html?smid=fb-nytimes&smtyp=cur&_r=0

YEEEEEEEEEEEEEEEEEEEEEEEEEESSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSS
.
nonpartisan on January 2, 2016 at 9:26 AM

.
Talk to me about it after the whole country has had a chance see exactly what he’s imposing.

Maybe he’ll do hardly anything, and leave us laughing.

listens2glenn on January 3, 2016 at 9:29 AM

Second hand smoke is an annoyance, but i have yet to have anyone collect the standing offer of $1 (im not a rich person), for the evidence of cancer caused by second hand smoke. It does not exist.

Im not sure how this myth became “fact”. Its no more based on scientific findings than global warming, just politically acceptable to people on the right.

If you dont want to spend time reading through scientific papers or learning about the debunked Red Cross second hand smoke study, I suggest the second hand smoke episode of Penn & Teller’s Bullsh*t. It brings much of that evidence to the party for you and is entertaining to boot.

It should be easy to show that ending smoking in bars and restaurants caused a virtual elimination of lung cancers in waiters and waitresses. Oh, they never got cancer at a higher rate than other nonsmokers before? Right.

Meanwhile, my income will never be the same after Pennsylvania imposed smoking bans on bars. Our numbers dropped by 50% and have never recovered. ….but hey, its ok to impose social engineering governance when its something nasty like smoking, right?

Marijuana….lets legalize that though….

alecj on January 3, 2016 at 11:52 AM

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