Sunday, December 15, 2013

The pump-priming effects of perverse incentives.

Who says that the government can't create jobs?

For instance, the men in Albany and at 260 Broadway have worked hard to ensure there are plenty of jobs in New York City's vibrant and energetic cigarette smuggling industry.
New York City has a citywide tax of $1.50, making the combined state and local rate $5.85, the highest in the nation.
To put that in perspective, the state and local taxes alone on a pack of cigarettes in NYC are greater than the entire retail price in Indiana.

At the apogee of its arc, Solyndra only employed 1100 people; surely there are at least that many entrepreneurs feeding the Big Apple's nicotine jones.


Joel said...

And I understand it's been going on for some time, yet the economic facts never seem to arrive in Albany. Sometimes (only sometimes?) I suspect the smugglers must be paying the politicians to keep the tax high.

Chris said...

Silver lining, eh?

jdunmyer said...

It's well-known that smoking cigarettes provides a mild high. I wonder if part of the epidemic drug use isn't due to the demonization of tobacco. Hard-core drugs didn't seem to be such a wide-spread problem back in my early days of the 1960's, when approximately half the population was smokers. Nearly my entire extended family smoked; I think my sisters were about the only ones who escaped the habit. My mother's 2 sisters and her brother all were smokers, as was most everyone else in the families.

I'm not saying that smoking cigarettes is without consequences. My mother and one aunt both died from lung cancer and the uncle had breathing problems when he died from a fall.

Anonymous said...

The Akwesasne reserve in Northern New York State straddles the Canadian-American border When you drive through it there is one casino, several tax-free gas stations and dozens of cigarette shops. I'm sure the Mohawks are profiting quite handsomely, everybody seems to be driving a shiny new pickup, SUV or ATV though officially they're below the poverty line.
I live about 30 miles north of the reserve and the prevalent crime around here is cigarette smuggling and marijuana growing.


Joseph said...

Gov't puts people to work all the time. Why who would employ the elderly actors if it weren't for all the ads on TV hawking free* scooters, chair lifts and diabeetus supplies supplied by Medicare? Lord knows Hollywood wouldn't hire them!

*free in the sense that the elderly person receiving the goods doesn't pay, rather a huge bureaucracy forcibly steals earnings from workers to pay extortionist for said goods.

Alan J. said...

Reminds me of the opening scene in 'Beverly Hills Cop' when Eddie Murphy is trying to arrest a cigarette smuggler. As Al Capone might have said "Thank God for Prohibition..."

azmountaintroll said...

Having first obtained the confidence of a young person, ask him or her which is easier to obtain: a pack of cigarettes or a bag of pot. I guarantee you the pot's easier to score and costs less to boot.

And someone a while back did a parody of a scientific paper on how to synthesize cold medicine from crystal meth, because meth was easier to obtain than Sudafed.

"If the government wants people to respect the law, it should set a better example."

Weer'd Beard said...

Another big difference between libertarians and "Progressives".

libertarians say: "End the war on drugs"

"Progressives" (at least the ones not in power) say: Legalize Marijuana and tax the hell out of it!

To which I say: "Why bother, they'll just buy it illegally for cheaper from the same drug dealers!"

Steve Skubinna said...

If the companies pocketed that kind of money they'd be denounced as soulless vultures exploiting consumers.

Same thing with gasoline - local, state and federal government gets more per gallon than the companies that actually produce it, yet oil companies are eeeeevil.

Matthew said...

Alan, me too. I can't read about cigarette smuggling without humming "Neutron Dance."

Then I think about Eddie Murphy using a HP and the director showing the characters reloading, even a one-handed reload, and I remember BHC is a pretty good gun movie.

staghounds said...

Even at New York retail, cigarettes are cheaper than marijuana.

jdunmyer said...

Your comment reminds me of a similar story: When prohibition ended, one gangster/rumrunner moaned to a buddy, "Well, we're done, out of business!" His buddy replied, "Just wait, the government will put us back into business!" Of course, it went down, just that way.