Like a witch’s brew, the elements are all coming together: A recent epidemic of massive cigarette tax increases in state after state; a Bureau of Alcohol, Tobacco, Firearms and Explosives grown complacent; and a Justice Department unprepared for the blossoming of a revitalized underground crime syndicate.
Critics blame the government’s insatiable appetite for cigarette revenue—a form of fiscal addiction most states share—for an increase in violent crime linked to cigarette smuggling. There is now so much money to be made by simply smuggling cigarettes from low-tax states to high-tax states, say government officials, that smuggling costs the nation as much as $5 billion a year in lost tax revenue.
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Michigan’s Mackinac Center for Public Policy says cigarette trafficking is now so lucrative that organized drug and gun smuggling operations want in on the action, according to a report in USA Today. Drug thugs don’t intend to stand by and pass up this kind of money. Cash and property seizures related to cigarette trafficking amounted to only $11 million in 2007, but two years later, the figure had risen to more than $30 million—and that is undoubtedly only the tip of the iceberg. In 2010, the Justice Department disclosed that prosecutions of tobacco smuggling had jumped by almost 40%.
All of this puts three states—Maine, Vermont, and Massachusetts—in a very unsettling position. These states are all in the process of attempting to lower tobacco taxes. New Jersey and Rhode Island are also considering the move, according to AP. And the tobacco lobby is happy to help get out the vote. And the drug smugglers are happy to start lining up the trucks that will buy cheap cigarettes in those states and start trundling them off to the high-cost cigarette states like New York, Wisconsin, and Washington--those lucrative lands of the $10 pack--minting money all the way.