Before the $1.60-a-pack tax hike on cigarettes took its devastation hold, Budget Director Robert Megna said, "Increasing the price hopefully gets people to stop using the products. An added benefit to that is we raise revenue." Well, one of those scenarios might be true. Following the trend started in July, data show that sales of taxed cigarettes have dropped 27% since the new taxes went into effect, with retailers selling an average of 30 million packs per months, 11 million fewer packs than before the new tax. Time for a little cigarette math!
If Albany was making $2.75 off an average of 41 million packs a month, they were earning around $113 million. With the new $4.35 tax on 30 million packs, they're making about $130 million. Far from the $260 million Paterson planned on making. And though they're still making a few million more, "experts" tell the Post that people aren't quitting, they're just finding their packs elsewhere. Vermont and New Jersey have been popular places to save, and now Pennsylvania, where Marlboros run $5.93 a pack, has joined the ranks.
In a two-mile strip off Route 6 in the state, eight tobacco shops have recently popped up where its easy to buy and sell back to broke smokers looking for an angry fix. One research scientist said, "If you talk to smugglers, it's a piece of cake. The profit margin is good, the penalties are low, and it beats selling cocaine." Obviously, this loss of business isn't sitting too well with the state's honest cigarette vendors. James Calvin, of the New York Association of Convenience Stores, said, "Every tax increase drives more smokers to that dark, shadowy, unregulated, unlicensed, untaxed side of the street. The whole policy is self-defeating." And don't forget about the terrorists winning.