High Tobacco Taxes Spark Huge Black Market in Northeast

Townhall.com Staff
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Posted: Jan 06, 2014 1:07 PM
High-cigarette tax jurisdictions are losing out on up to $729 million in tax revenue each year due to illicit trade in tobacco products. That is according to a new study from the nonprofit research organization RTI International. The figure represents an upper-end estimate of aggregate revenue foregone by the cities of Boston, Philadelphia, New York, Providence and Washington, DC. All five are top destinations for cigarette smugglers seeking to take advantage of high cigarette tax rates that push economy-minded buyers, including underage smokers seeking to avoid high, legal prices, to the black market.