NY Cigarette Tax Hike Sparks Smuggling Concerns

According to an article in The Wall Street Journal, if New York State were to implement Governor Kathy Hochul's proposed increase of $1 in cigarette taxes, it would worsen the state's problem with cigarette smuggling.

In New York, the number of smokers exceeds the legal purchase of cigarettes, indicating a significant amount of tax evasion and avoidance. The state of New York imposes a cigarette tax of $4.35 per pack across the entire state. In addition, New York City levies an extra consumption tax of $1.5 per pack.

Union workers are expressing discontent with the proposed ban and increase in taxes. Mike Smith, the President of Local Chapter 810 of the International Brotherhood of Teamsters, says, "Due to Governor Hochul's proposal to ban menthol/flavored tobacco and increase taxes, our brothers and sisters in the tobacco industry are at risk of losing their jobs, benefits, and retirement funds.

According to Smith, if the ban is approved, 500 out of the 4,000 drivers, warehouse workers, and salespeople represented by the local union will lose their jobs.

The chairman of the 16th Joint Committee of the truck driver union, representing 25 regions and 120,000 members, Thomas Gesualdi, wrote a letter to Hochul in early February stating, "Although we understand that the purpose of legislation is not to eliminate truck driver jobs or undermine their pension funds, the unfortunate reality is that these will be inevitable outcomes.

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The proposed tax increase in New York is expected to have negative consequences on unemployment rates and increase smuggling activities.