Sixty-one percent of cigarettes sold in New York are smuggled in from lower tax states, the highest rate in the nation, according to a report today by the Tax Foundation.
The fiscally conservative group based in Washington D.C., said because New York has the highest cigarette taxes, it is leading the nation in black market trafficking between states. The group said higher cigarette taxes across the nation are leading to more illegal tobacco sales.
New York’s cigarette tax is $4.35 a pack, making the average cost of a pack of cigarettes more than $11 a pack — tops in the nation. New York City puts an additional $1.50 a-pack tax on smokes.
“Public policies often have unintended consequences that outweigh their benefits,” says Tax Foundation economist Scott Drenkard in a statement. “Dramatic increases in state cigarette taxes have yielded additional revenue for priorities like public health, but have also fueled the rise of organized crime and law enforcement corruption.”
The data was collected by the Mackinac Center for Public Policy, a Michigan think tank, which used 2011 statistics from each state to determine smuggling rates.