Professor Links Confiscatory Taxes with Illicit Cigarette Trade

“If a carton of cigarettes sells for $160 in New York City, and $35 in North Carolina, what do you predict will happen? If you answered tons of cigarettes will be going up I-95 from North Carolina to New York City, go to the head of the class,” writes George Mason University economics professor Walter E. Williams in an April 30 opinion piece published in Salt Lake City’s Deseret News.

Williams warns political leaders that while it’s politically popular to impose confiscatory taxes on America's 40 million tobacco smokers, it is not without consequences. Any form of restriction on the voluntary exchange of goods between individuals will essentially encourage illegal trade, says Williams. Noting that cigarette smuggling operations are mostly run by organized crime groups, some of which have been found to use the profits to finance terrorist groups such as Hezbollah and Hamas, Williams said an easy solution would be to eliminate “confiscatory” taxes on the product. 

“Unfortunately, for politicians and do-gooders, the attack on smokers is a moral crusade that sees only benefits, and costs are irrelevant,” says Williams.  Or as novelist C.S. Lewis put it, "Of all tyrannies a tyranny sincerely exercised for the good of its victims may be the most oppressive."