Huge profits in illegal cigarettes

[Southern_Man 0]

http://money.cnn.com/2013/04/16/news/economy/cigarette-smuggling/index.html?hpt=hp_c3

Running cigarettes from Virginia to New York is huge business. Some claim that up to 64% of the cigarettes in New York are smuggled from somewhere else to avoid high state taxes.

"What if there were no hypothetical questions?"

[airdvr 210]

Always good money in doing things illegal...just ask Al Capone.

Please don't dent the planet.

Destinations by Roxanne

[lawrocket 3]

Wait a minute. Are you saying that when the government imposes additional costs for a product that sellers and buyers will find less expensive ways of getting it?

I am convinced that if our governments were to state a policy of, "encouragement of formation of black markets" that they could not do a better job than they do now. They fail to recognize the revenue they miss out on because they are so greedy that people won't pay their prices.

And it creates a fantastic incentive for people who can buy a container of cigarettes from South Carolina and make a million dollars selling that truckload in New York. The greater the benefit, the more worthwhile the risk.

My wife is hotter than your wife.

[SkyDekker 1,465]

Quote

Wait a minute. Are you saying that when the government imposes additional costs for a product that sellers and buyers will find less expensive ways of getting it?

I am convinced that if our governments were to state a policy of, "encouragement of formation of black markets" that they could not do a better job than they do now. They fail to recognize the revenue they miss out on because they are so greedy that people won't pay their prices.

And it creates a fantastic incentive for people who can buy a container of cigarettes from South Carolina and make a million dollars selling that truckload in New York. The greater the benefit, the more worthwhile the risk.

When this happened in Canada, some of the manufacturers were found to be supplying the illegal cigarettes out the back door.

This also shows that the oft repeated mantra of legalize drugs and tax it heavily, is really not such a simple solution as people like to think.

[ryoder 1,590]

Anyone know a good place to rent an 18-wheeler?
BTW Does anyone here have CDL?

"There are only three things of value: younger women, faster airplanes, and bigger crocodiles" - Arthur Jones.

[wolfriverjoe 1,523]

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Quote

Wait a minute. Are you saying that when the government imposes additional costs for a product that sellers and buyers will find less expensive ways of getting it?

I am convinced that if our governments were to state a policy of, "encouragement of formation of black markets" that they could not do a better job than they do now. They fail to recognize the revenue they miss out on because they are so greedy that people won't pay their prices.

And it creates a fantastic incentive for people who can buy a container of cigarettes from South Carolina and make a million dollars selling that truckload in New York. The greater the benefit, the more worthwhile the risk.

When this happened in Canada, some of the manufacturers were found to be supplying the illegal cigarettes out the back door.

This also shows that the oft repeated mantra of legalize drugs and tax it heavily, is really not such a simple solution as people like to think.

Well, when a pack of cigarettes is almost $10 in NY and around $4 in VA, the incentive to smuggle them is pretty high. The trick is to tax them enough to raise revenue, but not so much that illegal trafficking and black markets become attractive.

And this was proven after Prohibition ended here in the US. The taxes were still there, and generated a significant amount of revenue (one of the lesser known but more important reasons for repeal was the tax revenue).
It was just that the taxes didn't raise the cost to the consumer enough to make illegal distilleries and smuggling attractive to the bootleggers.
With the exception of a few die-hard holdouts in the back hills of course.

"There are NO situations which do not call for a French Maid outfit." Lucky McSwervy

"~ya don't GET old by being weak & stupid!" - Airtwardo

[Southern_Man 0]

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Well, when a pack of cigarettes is almost $10 in NY and around $4 in VA, the incentive to smuggle them is pretty high. The trick is to tax them enough to raise revenue, but not so much that illegal trafficking and black markets become attractive.

And this was proven after Prohibition ended here in the US. The taxes were still there, and generated a significant amount of revenue (one of the lesser known but more important reasons for repeal was the tax revenue).
It was just that the taxes didn't raise the cost to the consumer enough to make illegal distilleries and smuggling attractive to the bootleggers.
With the exception of a few die-hard holdouts in the back hills of course.

Yes, when one truck load can net you 2 million dollars (and I guess you could do something in a box truck or moving van without a CDL (ryoder) which would net just a little less) then the incentive is very high. Of course you would have to have a little capitol and the knowledge/contacts to get them back into the supply chain up there.

"What if there were no hypothetical questions?"

[Andy9o8 3]

People shouldn't smoke. It's a nasty habit.

[BillyVance 35]

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People shouldn't smoke. It's a nasty habit.

+1

"Mediocre people don't like high achievers, and high achievers don't like mediocre people." - SIX TIME National Champion coach Nick Saban

[sfzombie 3]

nobody i've ever heard talking about legalization ever said to tax them heavily, just to tax them. and it would work, not only do they save money by not trying to intercept them, or not housing people who are no longer criminals, but they actually generate revenue in the form of taxes. so it's a three-fold increase on revenue, not just generated by tax money. and a certain number of people who only use mary jane would grow their own.

http://kitswv.com

[JerryBaumchen 1,473]

Hi Southern,

OK, let's bring close to home: How many riggers on here list every dollar that they make doing a repack on their taxes?

Hm, I thought so.



JerryBaumchen

[wolfriverjoe 1,523]

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Yes, when one truck load can net you 2 million dollars (and I guess you could do something in a box truck or moving van without a CDL (ryoder) which would net just a little less) then the incentive is very high. Of course you would have to have a little capitol and the knowledge/contacts to get them back into the supply chain up there.

Anything less than 26000# GVWR (Gross Vehicle Weight Registered - the max the truck can legally weigh) and without airbrakes can be driven on a regular license. The typical "Ryder" straight truck (26' box truck) is one.

http://www.ryder.com/en/truck-rental/rentalitems/straight-truck.aspx

8000# capacity. That's a lot of cigarettes.

"There are NO situations which do not call for a French Maid outfit." Lucky McSwervy

"~ya don't GET old by being weak & stupid!" - Airtwardo

[Southern_Man 0]

Quote

Hi Southern,

OK, let's bring close to home: How many riggers on here list every dollar that they make doing a repack on their taxes?

Hm, I thought so.



JerryBaumchen

Hi Jerry,


Another example that I see frequently on these forums is people evading VAT taxes or import taxes on rigs that they buy via coming to the states to pick it up, asking for the wrong information to be written on the label, etc.

"What if there were no hypothetical questions?"