Monday, May 4, 2015

The Simple Solution to Illegal Cigarettes

Could raising Virginia taxes save lives?

Posted By on Mon, May 4, 2015 at 12:27 PM


Last July, Eric Garner was caught in Staten Island with four packs of Newport cigarettes that apparently were untaxed and were for sale. A police officer detained Garner, and in a tussle, killed him while putting him in a chokehold. The officer wasn't indicted.

The death of Garner, a black man, was one in a series of police-related killings of minorities that has sparked riots from Ferguson to Baltimore. But the Garner case brings something else to light: Virginia’s ridiculously low taxes on cigarettes and why they're such a great buy in New York.

The Old Dominion charges only 30 cents per pack of smokes -- the second-lowest rate in the country. New York State charges $4.35 and New York City tacks on another $1.50. So a pack of cigarettes that costs maybe $4 in Richmond costs around $15 in New York City.

Is it any surprise that there’s a big illegal trade? Anyone can drive up to Costco, buy in bulk and cheaply and then motor up to New York to make some real money.

The Richmond Times-Dispatch has covered the issue in a recent series of articles. Most were well reported but one story hit the wrong note. In that one, Philip Morris USA and Altria, based locally, received accolades for being aware of the issue. Well gee whiz: Their products only help kill 400,000 Americans a year.

There's a simple and elegant solution: Raise Virginia’s cigarette tax rate. If you want to cut the illegal trade, it’s easy and will generate more tax revenue, too. It will never happen, though. Altria is too big a political donor and Virginia doesn’t like taxes.

But there's another aspect to this issue. Commenters mulling the spate of race-related conflict and police killings are questioning what is called “broken windows” policing. That style became popular in the 1990s and called for crackdowns on any small infraction of law such as breaking windows, spraying graffiti or selling untaxed smokes.

It was popularized by New York Mayor Rudy Giuliani when he took office in 1993. I was living in New York then, but was about to move to Moscow on assignment for a New York-based magazine. When I returned some months later for a visit, I was amazed. It was as if New York had been transformed into a Catholic parochial school. You could even get a ticket for jaywalking.

More recently, police have moved away from the strict enforcement, noting that it tends to alienate inner-city communities who must live with high crime rates and are needed to help testify and cooperate to stop it.

Washington Police Chief Cathy Lanier doesn’t buy the “broken windows” strategy.

According to The Washington Post, Lanier “says, why should police officers with guns be enforcing nonviolent offenses like selling untaxed cigarettes or failing to pay child support? Why should police officers be on the front lines of every mental-health crisis? 'I’ve sent all my officers for crisis intervention training -- 40 hours worth,' she says. 'But we’re not mental-health workers.'”

So, you have two problems plopped on top of each other, at least in the case of illegal cigarettes. If you want to stop the trade, have Virginia raise its cigarette taxes. Easy. Simple. Win-win. More tax money and less confrontation. More lives saved from cancer and other illness, too.


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