23:31, 2008-Jun-22
New York State
imposed an additional $1.25 per pack excise tax on cigarettes a couple of weeks
ago. Now, a pack of smokes costs between $6 and $10, depending on where you buy
them. To make the tax a bit more palatable, some government officials maintain
that the reason for the increase is to discourage teen smoking by making the
habit so expensive that young people would be disinclined to purchase
cigarettes. That feel-good explanation is a tad disingenuous, given the state
of the economy and the budget deficit. It's kind of like saying, "It's all
about the kids." Don't kid yourself, its all about the money and how to
channel more tax money into state coffers.
Hand in hand with the excise tax increase, is
a report from Congressman and Department of Homeland Security committee member
Peter King, linking the sales of tobacco products at Indian reservations to
national security issues and global terrorism. At the heart of this issue is
the concept of forbearance, whereupon the local, state and federal governments,
in effect, look the other way when it comes to the sales tax and excise tax
exemptions enjoyed by Native American merchants.
Indians do not have to pay sales and excise taxes on products sold on
reservations by Native Americans to Native Americans. Since before we can
remember, these exemptions also have been applied to sales made on reservations
to non-Native Americans, which is a violation of the law. In the name of
forbearance, lawmakers and law enforcers alike have simply ignored the
infractions. As a consequence, there is heap big money exchanging hands at the
Indian tobacco shops, where cigarettes are often sold for less than half the
price for the same product sold at the neighborhood convenience store or gas
station.
And, there is the rub.
Certain unscrupulous entrepreneurs take advantage of the cheap, tax-free
cigarettes, buying them in bulk (sometimes by the tractor-trailer load) at the
reservations, slapping counterfeit tax stamps on them, and peddling them to
otherwise legitimate retailers at wholesale prices. The illegal markup is about
$14 or $15 per carton, so go figure: a trailer load of cigarettes could contain
thousands of cartons, or tens of thousands of dollars.
Congressman King fears that a great deal of that ill-begotten money is
channeled to terrorist cells both local and abroad, in essence funding a
national security threat. King wants it stopped.
This alleged threat to our security may or may not be legitimate; the crackdown
on reservation tobacco sales may or may not be disingenuous; but, like the
excise tax increase, it has been made palatable because it sounds good, and it
calls upon our sense of patriotism. Could it be that there is another agenda to
be filled?
Just about everyone from state legislators to the county executive to the
county sheriff has jumped on the bandwagon as they look upon a gold mine of
uncollected tax revenue. That is because the majority of reservation tobacco
sales is to non-Native Americans, but, by virtue of forbearance, has been
tax-free. Now, everyone in state and local government wants to forget
forbearance and tighten up the enforcement of our tax laws. They want to dodge
the budget deficit bullet.
All of this noise and rhetoric is about the noxious weed and a few,
unscrupulous bootleggers. The Indians, who copped a break in the name of
forbearance, will be the ones who are forced to bear the burden of increased
tax liability. At least this time around, our tax-giddy leaders have targeted
illegal sales of a highly addictive, non-essential commodity. (Perhaps, in the
name of reconciliation, the government will offer to smoke the proverbial peace
pipe with the Native Americans. But, then again, there is no tax on that kind
of weed, so don't hold your breath ... or inhale!)
As much as we hate taxes and as much as we hate to say it, the time has come
for the government to crack down on illegal cigarette sales and collect the
taxes.
We will applaud the effort. We ask only one thing: Just don't increase our
taxes again in order to do it.
And Why Not?
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