Enforcing laws against interstate tobacco smuggling

Cigarette taxes protect health by reducing smoking.

But tax disparities across states create a multi-billion-dollar annual market in smuggled tobacco products. Current enforcement efforts are inadequate and ill-organized.

As a result, the illicit trade in tobacco products (ITTP) is growing, and the larger the market grows, the harder the problem of controlling it. (That’s the usual positive feedback problem in violation rates due to enforcement swamping.) So inaction now has long-lasting costs.

Tax equalization would solve the problem, but isn’t likely to happen. Feasible changes in enforcement strategy could protect health and revenue while reducing crime.

Further thoughts on this from Mike DeFeo and me now up on SSRN.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com

12 thoughts on “Enforcing laws against interstate tobacco smuggling”

  1. "Cigarette taxes protect health by reducing smoking."

    Such noble knights of cardiac health, those brave and venerable cigarette taxes! Excelsior!!!

    I'm going to make a teensy little assumption that Mark Kleiman doesn't smoke. Gonna go out on a little limb there, I know. And I'm sure that he wishes deeply in his heart of hearts that someday, some very auspicious day he and the rest of us , of course, will have our most heartfelt desires met and we will enjoy having our other health issues protected for us by making the causes of those health issues so expensive we can not afford them.

    Alcohol is bad for you – did you know that? Let's make wine, beer and booze cost about $200.00 a bottle. Think of the benefits! How about a nice steak? Don't make me laugh! Beef is bad for the planet and is murder on the arteries. Best thing we ever did was to make steak cost $300.00 a pound. Beautiful!

    Nothing puts a smile on your face like "protecting" people from their own worse instincts by pricing what they think they want out of their grasp. Go ahead – pat yourself on your shoulder for a job well done. And whatever you do, do NOT think about the fact that smokers are *addicted* to tobacco, that they enjoy tobacco, and that you are deliberately taxing what they enjoy and are addicted to out of their reach because a) you know better than them what they should enjoy and b) you don't smoke.

    And here you are, good citizen Kleiman – complaining about efforts to get around this draconian tax you want people to dutifully suffer from. Instead, you are arguing for a crackdown, a more militaristic response to these criminals as you put it.

    This positioning of yours on this issue disgusts me. Let poor people have their pleasures, please. Offer them free smoking cessation instead of criminalization. Offer them free vaping materials instead of the cruelty of pricing what they are addicted to out of their economic reach.

    1. 1. Yes, smoking kills. Even more than alcohol does.
      2. Taxation is a good way to respond to both problems. Right now, we're seriously under-taxing alcohol.
      3. Unhealthy food grown using environmentally destructive techniques is another good candidate for selective taxation.
      4. Sufficiently high (and uneven) taxes create opportunities for commercial tax evasion. Yes, the people who engage in that are criminals.
      5. You can deal with that either by creating a tax system less vulnerable to smuggling (in the case of tobacco, harmonizing taxes across states) or by enforcement, or both.
      6. In the case of tobacco, vaping – which provides nicotine with much less health harm – is a good safety valve for the demand that would otherwise flow into illicit channels. The key policy here is not hitting vape with the taxes and regulations designed to discourage smoking.
      7. High cigarette taxes do create micro-distributional problems: they further impoverish already-poor smokers. Some ideas for dealing with that here: http://booksc.bypassed.ltd/book/5317002/516c61

  2. Another case of government creating a problem which it must then solve by creating another problem, which it will no doubt attempt to solve by creating an additional problem, all the while adding bureaucracies with unaccountable armed agents to spread mayhem and disrespect for government throughout the land. What fools these mortals be.

    1. But you said that government created the problem, thus implying that there wasn't a problem prior to that. Now you've backtracked to saying that there is going to be a problem regardless, which means that your initial breezy claim is inoperative. Now you need to get down into the weeds of trying to determine which policy leads to the smallest problem. This takes you away from your core competence of simplistic libertarian bromides.

      1. Please take a moment to consider the crucial difference between the terms "a problem" and "the problem" and you will see there is no contradiction in what I said.

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