Grover Norquist and Smurfing

November 25, 2012

“Smurfing” is the term The Economist (Nov 24 2012) identifies as the label given smuggling of cigarettes wthin the United States.  According to The Economist, the cigarette tax in Virginia is $.30 cents per pack, whereas in New York State, the tax is $4.35 per pack. Predictably, there is a huge trade of smuggling cigarettes up I95 from Virginia to New York.

The question is to Grover Norquist and those of the far right who want to dismantle all Federal Government (except, of course, the military, which they want to expand): How does it make any sense for the 52 states of the Union to have different cigarette taxes? This differential results in 3 major problems: (1) we encourage smuggling; (2) states with high taxes lose a major part of the revenue they had hoped for–e.g., The Economist says New Jersey, with a tax of $2.70 estimates that 40% of the cigarettes sold in their state are smuggled in; and (3) we then have to devote a huge police expense to trying to catch smugglers.

Grover and friends, wouldn’t it be better for everyone if the 52 states got together (that’s what a federal government does) and voted on one cigarette tax, with the proceeds of that tax to be distributed to each of the states in which it is collected?

Of course, this would be likely to result in less aggregate expense than the 52 states currently spend on all this, would eliminate the smuggling and the smugglers, and it would not take much federal government staff of expense to arrange this new arrangement.

I will be waiting for a good explanation of why this would not be a good idea, and just one (small) example of a reason for a federal government (as opposed to returning all powers to the states–or, would that be to the cities and/or the communities–how are do you wish to go)?

I welcome your comments

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