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(New York) City blames Big Tobacco for cigarette black market
NY Post ^ | June 12, 2011 | GARY BUISO

Posted on 06/12/2011 4:35:53 AM PDT by lowbridge

City Hall for the first time is directly blaming Big Tobacco for the burgeoning black market of bootleg cigarettes on city streets.

Newport maker Lorillard, the country's No. 3 tobacco company, consciously oversupplies the Poospatuck Indian reservation on Long Island -- knowing full well bootleggers buy in bulk and then flood city neighborhoods with unstamped, cheap smokes, a city official told The Post.

"If Afghanistan is the seed of the heroin trade, then Lorillard is like that with cigarettes," said Eric Proshansky, a deputy chief in the city Law Department. "Lorillard knows its cigarettes are being bootlegged into the city, and they have refused to stop supplying the reservation, and that's because they know . . . [the trade is] boosting their sales tremendously."

Marlboro maker Philip Morris discontinued business with wholesalers supplying the Poospatucks in 2008, leaving Lorillard as the chief supplier, according to the city.

(Excerpt) Read more at nypost.com ...


TOPICS: Business/Economy; Culture/Society; News/Current Events; US: New York
KEYWORDS: cigarettes; newyork; ny; taxes

1 posted on 06/12/2011 4:35:58 AM PDT by lowbridge
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To: lowbridge

These idiots learned nothing from prohibition. On top of that, the government has no right to tax cigarettes to the extent it does. Government created the black market.


2 posted on 06/12/2011 4:41:11 AM PDT by liberalh8ter
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To: lowbridge

9 bucks in West Alaska.


3 posted on 06/12/2011 4:42:01 AM PDT by screaminsunshine (Socialism...Easier said than done.)
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To: lowbridge

Bootlegging is a direct result of absurdly high taxes. It’s the fault of politicians who greediy raise taxes. With these guys it’s always somebody else’s fault.


4 posted on 06/12/2011 4:42:17 AM PDT by mkmensinger
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To: lowbridge

The keyword in the article is untaxed.
No mention of health risk etc.
NY is just pissed they are losing money..


5 posted on 06/12/2011 4:42:54 AM PDT by SECURE AMERICA (Where can I sign up for the New American Revolution and the Crusades 2012?)
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To: lowbridge

Liberal intelligence on display for all to laugh at.


6 posted on 06/12/2011 4:43:19 AM PDT by Erik Latranyi (Too many conservatives urge retreat when the war of politics doesn't go their way.)
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To: mkmensinger

greediy=greedily


7 posted on 06/12/2011 4:43:21 AM PDT by mkmensinger
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To: lowbridge

“Poospatucks”

Had to reread that a few times. Anyway, unfair taxation always results in bootlegging - Whiskey Rebellion, anyone?


8 posted on 06/12/2011 4:53:00 AM PDT by elcid1970 ("Deport Muslims. Nuke Mecca. Death to Islam. Freedom for mankind.")
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To: lowbridge

Gee whiz Dipsticks.

The Reservation Indians order large quantities of cigarettes to supply their customers, and now it is the cigarette manufacturers fault for supplying them.

Yeah, that makes sense I guess to the bureaucrat numnuts.

The Government inspired the black market. Let’s look at the facts. Straight facts.

If the Government wants people to stop smoking Ban cigarettes. make them illegal and start locking up smokers and their suppliers.

That isn’t the point . They don’t really give two hoots about smokers, they want the tax money.

As usual with Government -—Follow the Money.


9 posted on 06/12/2011 4:53:23 AM PDT by Venturer
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To: mkmensinger

Bootleggers always show up when taxes are outrageous like NYC. Hell, $6.50 a pack is very high, and; 14 bucks is the most I have ever heard. NY always had bootleggers running smokes up from NC.


10 posted on 06/12/2011 4:57:58 AM PDT by Lumper20
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To: Venturer

Remember it is New York. same people who are going after out of state gun companies.

I so love unintended consequences.


11 posted on 06/12/2011 4:59:29 AM PDT by EQAndyBuzz (Sarah Palin, the only candidate to be vetted by the NY Times, the Washington Post and NBC.)
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To: lowbridge

Has to be Big Bad Tobacco. Super high taxes couldn’t have anything to do with it.


12 posted on 06/12/2011 5:00:33 AM PDT by arthurus (Read Hazlitt's "Economics In One Lesson.")
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To: Venturer
The Reservation Indians order large quantities of cigarettes to supply their customers, and now it is the cigarette manufacturers fault for supplying them.

Thanks for stating the obvious.

13 posted on 06/12/2011 5:28:00 AM PDT by philman_36 (Pride breakfasted with plenty, dined with poverty, and supped with infamy. Benjamin Franklin)
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To: lowbridge
City Hall King George III for the first time is directly blaming Big Tobacco the Colonists for the burgeoning black market of bootleg cigarettes Tea on city streets.

There. Fixed it.

14 posted on 06/12/2011 5:32:28 AM PDT by VRW Conspirator (Sarah pisses off all the right people! - FReeper proudpapa)
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To: lowbridge
"Newport is a big brand in New York City, and so this is a way of getting cheap cigarettes into the city," he said. "If cigarettes are expensive, people don't buy them."

He is right but he is wrong.

People will not buy expensive cigarettes. They will find cheap cigarettes and buy them.

This is what makes bootlegging profitable.

With New York taxes added on cigarettes are $14 a pack. The reporter bought the same pack a bodega for $6.50. The bodega could have easily been charging $8.50 and still be out selling any legal retailer.

Nanny state NY has made this about the Indian tribes but this at its root has nothing to do with the reservation and everything to do with taxes. The exorbitant taxes on cigarettes has created the black market for cigarettes that would exist absent the reservation. If the Indians were not selling the cigarettes tax free bootleggers would be trucking them in from North Carolina.

When taxes on any good that people want become to high it makes bootlegging profitable and a black market will arise to full fill that desire of the people.

15 posted on 06/12/2011 5:33:07 AM PDT by Pontiac (The welfare state must fail because it is contrary to human nature and diminishes the human spirit.)
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To: lowbridge

Dems have such a good grasp of supply and demand, don’t they? They truly believe that if only they can stop supplying that one Indian res all their problems will be solved. And millionaires won’t mind paying a little extra. They’d never move out of the city just because of a few more taxes. And by golly, if they just outlaw guns there won’t be anymore gun crime. Gee these folks are bright. And so are the peeps that keep on electing them.


16 posted on 06/12/2011 5:42:12 AM PDT by PilotDave (No, really, you just can't make this stuff up!!!)
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To: liberalh8ter

I remember telling them this would be the result.

I just can’t act surprised.

Oh...and they make the same excuse for illegally imported firearms. Bloomberg went so far as to GO to other states in order to entrap firearms dealers.


17 posted on 06/12/2011 5:43:44 AM PDT by Maelstrom (To prevent misinterpretation or abuse of the Constitution:The Bill of Rights limits government power)
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To: lowbridge
Heard this a few weeks ago on Marketplace on NPR.

Number of roll-your-own cigarette shops billows

It's cheaper to roll your own cigarettes. But regulators say roll-your-own shops are really cigarette manufacturers, subject to all applicable laws and taxes.

A "Let's Roll Tobacco" shop in Milwaukee. (Erin Toner) A cigarette rolling machine at the "Let's Roll Tobacco" shop in Milwaukee.

A cigarette rolling machine at the "Let's Roll Tobacco" shop in Milwaukee. (Erin Toner).

Kai Ryssdal: The federal excise tax on a pack of cigarettes in this country is a dollar and a penny -- $1.01. State and city taxes vary, but they're often higher. In the end, it all adds up. In New York City, for instance, a pack of smokes will set you back 11 bucks. So the roll-your-own movement is gathering steam. With a twist.

Erin Toner reports from WUWM in Milwaukee.

Erin Toner: Breanna Wohlfeil has dyed pink hair, carries a purse with a big peace sign, and she rolls cigarettes at home because she feels it's a more natural way to smoke. But Wohlfeil calls the process a "horrible pain."

Breanna Wohlfeil: The filters always break, and like, if you don't put enough in, it's not packed enough. It's just a pain.

So Wohlfeil decided to check out a new shop near Milwaukee called "Let's Roll Tobacco." It's sort of like those paint-your-own pottery shops. Here, customers use sophisticated machines to make their own cigarettes.

Wohlfeil: Since you have a blend of more than two tobaccos here, you can just put it in this bucket and give it a good shake.

Wohlfeil chooses a bold tobacco blend, and menthol-flavored filters and carries both over to a rolling machine the size of a vending machine. Store manager Jack Vlasak instructs Wohlfeil to gently pour the tobacco into the machine's hopper, insert the filters, and push start. One at a time, cigarettes pop out of a chute near the base of the machine and land in a plastic bin.

Wohlfeil: I like it a lot. It's a lot faster.

The machine rolls nearly 200 cigarettes -- or the equivalent of a carton -- in just eight minutes. It costs just under $30. At a gas station down the road, a carton of Marlboro Lights sells for $74.

Jack Vlasak says the store's been open just two months, and business is booming.

Jack Vlasak: Most of the customers, 99 percent of them are very, very happy with what they're getting. They're saving money, they're saving time.

Hundreds of roll-your-own shops like this have opened around the county. They're able to offer cheaper cigarettes because they use pipe tobacco, which is taxed at around $3 a pound, compared to $25 for rolling tobacco. The stores are very careful to appear as retailers. Employees instruct customers during the process, but don't touch any of the equipment. They also call their products smokes, not cigarettes.

But regulators say what looks like a cigarette, is a cigarette.

David Rienzo: They're doing this little dance, you know, that is like a concerted search for loopholes.

David Rienzo is an assistant attorney general in New Hampshire. He's sued several roll-your-own shops alleging they're actually cigarette manufacturers and therefore subject to all cigarette laws and taxes.

Rienzo: They make a profit off of the cigarettes that are being made. And they make a profit off the fact that the cigarettes are being manufactured in their store. To us that meant that they were in the business of manufacturing cigarettes.

The federal government is also weighing in. The Treasury Department says the shops should be taxed as cigarette manufactures, but that ruling is tied up in court.

Phil Accordino is one of the parties that challenged the ruling. He owns the company that makes the big rolling machines. Accordino says his product only slightly improves upon the devices people use at home, legally, to roll their own cigarettes.

Phil Accordino: Our machine will make at best about four cartons in an hour. A true cigarette manufacturing machine will make upwards of 20,000 cigarettes a minute. You cannot confuse the two.

Accordino says there are several do-it-yourself precedents, like stores that let customers brew their own beer on premises. The federal government says those stores are legal, and exempt from excise taxes if store employees do not assist in the production.

In Milwaukee, I'm Erin Toner for Marketplace.

18 posted on 06/12/2011 5:47:12 AM PDT by csvset
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To: liberalh8ter
Your statement needs to be in large bold letters.

Government created the black market.

19 posted on 06/12/2011 5:48:28 AM PDT by chainsaw (I'd hate to be a democrat running against Sarah Palin.)
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To: lowbridge

Taxing gone bad duh.


20 posted on 06/12/2011 5:53:32 AM PDT by Vaduz
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To: lowbridge

Well, this is simply another example of racism...trying to get the black man addicted to menthol cigarettes. (sarc.)


21 posted on 06/12/2011 6:14:49 AM PDT by toothfairy86
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To: Pontiac

I will freely admit that my knowledge of Indian reservations is very limited but wouldn’t taxing cigarettes deprive the reservation of a critical source of income and violate several of the treaties made with them? I wonder if the Indians (sorry native americans) will fight back.


22 posted on 06/12/2011 6:18:09 AM PDT by utherdoul
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To: lowbridge

Who says they have an obligation to ensure the collection of taxes that are used to support the people that are trying to destroy their business?


23 posted on 06/12/2011 6:23:49 AM PDT by dangerdoc (see post #6)
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To: lowbridge

The Lorillards are an old, old New York family once synonymous with philanthropy. The company only left NYC in the late 1990s. I guess the goal is to drive every business from NY.


24 posted on 06/12/2011 6:36:23 AM PDT by Oratam
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To: lowbridge
it should be illegal to tax something MORE than it tales to MAKE!!!
25 posted on 06/12/2011 6:47:53 AM PDT by Chode (American Hedonist - *DTOM* -ww- NO Pity for the LAZY)
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To: lowbridge

The thing that most don’t realize in regards to the Indian Cigarette biz here in NY is that only State tax is in question. The Indians are paying federal taxes on the sales and resulting income generated on the Res. That’s why the Feds have pretty much stayed out of the issue.


26 posted on 06/12/2011 6:51:37 AM PDT by SirFishalot
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To: utherdoul
I wonder if the Indians (sorry native americans) will fight back.

According to the article they are appealing the court ruling.

27 posted on 06/12/2011 7:08:00 AM PDT by Pontiac (The welfare state must fail because it is contrary to human nature and diminishes the human spirit.)
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To: lowbridge
The black market has been there since I was a kid.

I remember semis pulled over on US 301 in the 50s and 60s being checked for unstamped cigarettes.

Even then, with smokes at a quarter a pack (or less) south of the Mason-Dixon Line, there was enough profit incentive for guys to haul cigarettes North to New York from the Carolinas.

The wild-eyed increase in taxes on the one person in five who smokes hasn't change the dynamic.

28 posted on 06/12/2011 7:09:23 AM PDT by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing.)
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To: lowbridge
Oh, it just couldn't possibly be all those taxes now could it? Kinda like the 50+ cents a gallon tax we pay in Michigan. While the oil company makes about 7 cents.

Government is huge, self indulgent, and greedy. And is making everyone's life miserable, except for the elite leeches and the leeches who live off of other people's blood, sweat and tears. The best way government can deflect criticism from it self is to demonize those the government feeds off of.

29 posted on 06/12/2011 7:14:36 AM PDT by MsLady (Be the kind of woman that when you get up in the morning, the devil says, "Oh crap, she's UP !!")
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To: liberalh8ter

It started much earlier than prohibition. It started before the US was a country. It started with our founding fathers and the English tax on molasses. It is deeply ingrained in our DNA that when taxes become unfair we fine a way around it. We get better accountants, smokers buy from alternate sources, we buy goods from counties and states with less sales tax. We are a creative people.

The libs seem to think taxation is linear. They actually think that if taxes are raise by x the revenues will rise by x. When liberal Bloomberg raised the cigarette tax he must have been shocked that the revenues dropped. He failed to understand that when taxes become oppressive, the people find alternatives. Bloomberg is the cause of Bloomberg’s tax problems. He is just another pro-tax’em to death liberal.


30 posted on 06/12/2011 8:24:51 AM PDT by Dutch Boy
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To: lowbridge

Tobacco is very easy and cheap for me to grow. I am not surprised at this article. It is more than just taxes its regs as well. Like the FDA mandated last year that if your not constantly taking a drag off your cigarette it will go out. I cannot imagine the chemicals required to do that.


31 posted on 06/12/2011 8:25:30 AM PDT by castlegreyskull
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To: lowbridge

“(New York) City blames Big Tobacco for cigarette black market”

LOL!! The citizens of NYC must be proud of the fools who represent them.


32 posted on 06/12/2011 11:00:47 AM PDT by WKUHilltopper (Fix bayonets!)
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To: liberalh8ter
your right the taxes are to blame, but for a socialist/liberal/communist, they never have to admit its their fault. It would spoil their belief system..

The government may think they KNOW but what can they PROVE. The idiots are in charge of the government. People like Bloomberg are the biggest tyrants around...

33 posted on 06/12/2011 7:10:14 PM PDT by goat granny
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