Why New York’s high tobacco taxes cost the state billions

[GURPS]

Why New York’s high tobacco taxes cost the state billions



A recent study found that more than 50 percent of the cigarettes consumed in New York are smuggled in — the nation’s highest rate.

For 2015, the most recent reporting year, the state lost $1.63 billion because of untaxed sales, according to new figures released by analysts for the Tax Foundation and the Mackinac Center for Public Policy.

The $13-a-pack Marlboros you buy in Manhattan — with the correct tax stamps — comes with $4.35 state tax levy and an additional $1.50 in city tax — the result of a decade-long quadrupling in local tobacco taxes.

These astronomical costs have driven the black market in smokes where the city in 2015 lost an estimated $740 million and the state, about $895 million on top of that, the Tax Foundation analysts calculated for The Post.

 

[Larry Gude]

It doesn't say how it came up with those numbers. Did they multiply the volume sold without stamps times the states rate? If so, that's dumb. You can't make an argument that you're losing revenue based on a rate people already won't pay. So, are they using, say, North Carolina or China's rate? If so, they'd be 'losing' a lot less revenue as the rate would be much lower. That said, if people are already buying illegal smokes and paying NO tax, why would anyone want to pay the state tax regardless of what the rate is?

How DO these people get paid to write this drivel and I can't????

 

[Kev_Russell]

Yea, cost the state billions and Eric Garner his life for the heinous crime of selling loosies.

 

[Hijinx]

It doesn't say how it came up with those numbers. Did they multiply the volume sold without stamps times the states rate? If so, that's dumb. You can't make an argument that you're losing revenue based on a rate people already won't pay. So, are they using, say, North Carolina or China's rate? If so, they'd be 'losing' a lot less revenue as the rate would be much lower. That said, if people are already buying illegal smokes and paying NO tax, why would anyone want to pay the state tax regardless of what the rate is?

How DO these people get paid to write this drivel and I can't????

I dunno Larry, I always thought you did a pretty good job in the drivel department.

Maybe it's the get paid part.

 

[Monello]

In NY you can also purchase cigarettes on the indian reservations. They don't sell them with the state tax, so they are cheaper. Lots of folks buy them there so they aren't breaking any laws. Sticking it to the man legally.

 

[GURPS]

It doesn't say how it came up with those numbers.

did you not read the article ?

A recent study found that more than 50 percent of the cigarettes consumed in New York are smuggled in — the nation’s highest rate.

For 2015, the most recent reporting year, the state lost $1.63 billion because of untaxed sales, according to new figures released by analysts for the Tax Foundation and the Mackinac Center for Public Policy.

 

[Larry Gude]

did you not read the article ?

Yeah, I read the ####ing article. It didn't answer my very obvious question. Did you read it? Don't you question how they came up with the number??? Are they assuming people who choose to NOT pay the tax WOULD pay the tax, the full tax if only...what??? The incentive from the tax didn't exist?

 

[Larry Gude]

I dunno Larry, I always thought you did a pretty good job in the drivel department.

Maybe it's the get paid part.

I take comfort in what you call drivel being the meat of a given subject. I use you as a barometer that I asked an intelligent question based on how much you disparage it.
This is a waste of time but doesn't it interest you, at all, on how they came up with the number??? Doesn't it stir your curiosity on how they would come up with it? At all?

 

[GURPS]

Don't you question how they came up with the number??? - no to me it is common sense - 50% of all packs of cigarettes sold were smuggled - so if 50 million packs were sold in NY State its a straight forward math problem ... x/y*Tax =

Are they assuming people who choose to NOT pay the tax WOULD pay the tax, the full tax if only...what??? - No that is not how I took it - if half the cigarettes sold in NY State were NOT Smuggled in NY State would have received and additional 1.63 billion dollars in Tax Revenue

The incentive from the tax didn't exist?

...

 

[GURPS]

This is a waste of time but doesn't it interest you, at all, on how they came up with the number??? Doesn't it stir your curiosity on how they would come up with it? At all?

which Number - cigarettes smuggle or lost taxes

https://taxfoundation.org/individual-consumption-taxes/excise-taxes/cigarette-and-tobacco-taxes/

 

[Larry Gude]

I take comfort in what you call drivel being the meat of a given subject. I use you as a barometer that I asked an intelligent question based on how much you disparage it.
This is a waste of time but doesn't it interest you, at all, on how they came up with the number??? Doesn't it stir your curiosity on how they would come up with it? At all?

Wait! You were complimenting me that I, too, can write drivel!!!

 

[Larry Gude]

which Number - cigarettes smuggle or lost taxes l]

I can only repeat myself;

It doesn't say how it came up with those numbers. Did they multiply the volume sold without stamps times the states rate? If so, that's dumb. You can't make an argument that you're losing revenue based on a rate people already won't pay. So, are they using, say, North Carolina or China's rate? If so, they'd be 'losing' a lot less revenue as the rate would be much lower. That said, if people are already buying illegal smokes and paying NO tax, why would anyone want to pay the state tax regardless of what the rate is?

 

[GURPS]

I can only repeat myself;

ok I missed that ....

If so, that's dumb. You can't make an argument that you're losing revenue based on a rate people already won't pay.

:shrug:

why is it stupid .... politicians pass new taxes all the time assuming Human Nature Will Never Kick in, and people will do the exact opposite

That said, if people are already buying illegal smokes and paying NO tax, why would anyone want to pay the state tax regardless of what the rate is?

rather than risk legal penalty's if taxes are below a certain threshold people pay the tax

but if a pack sells for $ 13.50 in NY and you can purchase them wholes sale in North Carolina of some other low tax state for a buck or 2 a pack now we are talking a 500 - 600 % Mark up deducting the cost of having to fake a NY State and NYC Tax Stamp

 

[Larry Gude]

...

If 50% of people CHOOSE to buy a smuggled cigarette, ostensibly to AVOID the tax, you can not say that revenue is lost. That's like saying if 50% more people bought cars there'd be 50% more cars sold. It's a non sequitur. People DON'T buy 50% more cars. 50% of people would have to have a lower tax to choose legal over illegal. Thus, the straight math does not work. It's illogical and unseasoned.

 

[GURPS]

If 50% of people CHOOSE to buy a smuggled cigarette, ostensibly to AVOID the tax, you can not say that revenue is lost. That's like saying if 50% more people bought cars there'd be 50% more cars sold. It's a non sequitur. People DON'T buy 50% more cars. 50% of people would have to have a lower tax to choose legal over illegal. Thus, the straight math does not work. It's illogical and unseasoned.

sure you can .... but that is your perception, my is different

one could also say the assumption is, baring a punitive tax people would purchase legally taxed cigarettes at a lower tax rate
however if History Serves me correctly I recall smuggling cigarettes from down south has always been part of the Mafia Trade

Outrageous Taxes, just increase the players

AFAIK - no one is smuggling cigarettes into MD even though there is a 2+ per pack tax.

 

[Larry Gude]

sure you can .... but that is your perception, my is different .

Observing what IS happening is not a perception. Unless you're argument is 50% of smokers in NY are buying illegal ones for reasons other than saving money.

I have ZERO doubt there is a healthy illegal cigarette trade in Maryland and for the same reason; save money.

 

[GURPS]

I have ZERO doubt there is a healthy illegal cigarette trade in Maryland and for the same reason; save money.

no where have I seen, people are saving money

 

[black dog]

It doesn't say how it came up with those numbers. Did they multiply the volume sold without stamps times the states rate? If so, that's dumb. You can't make an argument that you're losing revenue based on a rate people already won't pay. So, are they using, say, North Carolina or China's rate? If so, they'd be 'losing' a lot less revenue as the rate would be much lower. That said, if people are already buying illegal smokes and paying NO tax, why would anyone want to pay the state tax regardless of what the rate is?

How DO these people get paid to write this drivel and I can't????

I take a guess at that Mr Drivel,
They have a College Degree ( in Business ) and you don't?

 

[Hijinx]

i take comfort in what you call drivel being the meat of a given subject. I use you as a barometer that i asked an intelligent question based on how much you disparage it.
This is a waste of time but doesn't it interest you, at all, on how they came up with the number??? Doesn't it stir your curiosity on how they would come up with it? At all?

lmao

 

[Larry Gude]

no where have I seen, people are saving money

Ok, so, the premise stands, the piece is crap. You can't call $4 a pack someone chose to NOT pay because of a cheaper alternative LOST revenue. It's like the argument some years back some genius wanted to tax home owners on the income they WOULD get if they rented spare rooms. Rooms they choose to NOT rent.