"A Bad Idea" Revisited, We Told You So!

A Bad Idea" Revisited
We Told You So!

"A Bad Idea" is one of several editorials written during the legislative session of 2002 in opposition to the enactment of a whopping 1775% New York City cigarette excise tax increase. Industry unanimously forewarned of the unmitigated damage that would ensue. In addition, letters sent to you, our elected officials and various association white papers similarly predicted the inevitable consequences of:

i. A net reduction in total city and state combined revenues*
ii. Underage smoking and adult smoking would each increase
iii. Funding for terrorism by smuggling would become more prevalent
iv. Violent and organized cigarette related crime would greatly amplify
v. Cigarette manufacturer pass through payments to our counties would fall precipitously
vi. A few Native Americans, backed by foreigners, would get much richer, while thousands of local storekeepers and all taxpayers would pay the price.

Over the voices of reason, the smoking obsessive Mayor Bloomberg and the Leadership in Albany convinced the New York State Legislature to pass the enabling legislation and the City Council of New York City to vote into law, on July 2, 2002, this misguided, excessive and unenforceable new tax.

All of these admonishments have clearly come to pass. The losses of revenue, the increases in smoking, the overwhelming of law enforcement and the funding of terrorism are each documented by State, City and Federal agencies.

During the budgetary process last year and over an executive veto, you mandated that, the major source of untaxed cigarettes in our state, Indian sales to non-Indians must be regulated and taxed. The executive branch is charged with the responsibility of compliance with Chapters 62 (Part T3) and 63 (Part Z) of the Laws of 2003.

We now recognize that nearly all of the contraband sold in our streets by teenage "school yard dealers" and the smuggling terrorist activities that have been uncovered by Federal Agencies originate with cigarettes that are purchased from the Native American untaxed stores and also through their internet sites. At the current rate of growth, within one year, more untaxed cigarettes will be sold to our citizens by Native Americans than all of the taxed cigarettes being sold by the more than our 20,000 licensed and regulated stores statewide! The ones that charge taxes, pay taxes and lose their licenses, if caught selling to minors.

Incredibly, Government has refused to either enforce this law, the substance of which was upheld by the United States Supreme Court in 1994, or the Internet Cigarette Law, which you passed two years ago and the Attorney General successfully defended with our tax dollars. This administration would have us believe that the Native American Tribes are actually "negotiating in good faith" when those same few opportunists are spending millions on
"pity me" advertising

Surreptitiously backed by collaborating foreign and non-Indian domestic financiers. These financiers are involved in exploiting and benefitting at the public's expense the huge tax advantage the Indians enjoy. It is now rumored that an effort by leadership is being considered to actually convince you to repeal these laws.
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The lobbying and political tribute that comes from the more than one billion dollars per year that these few have been permitted to pillar from our tax base and our legitimate economy cannot be allowed to continue.

Why should we continue a statewide revenue loss in excess of $100 million per month or over $1.2 billion per year, every year?

Why should citizen 'A' living in NYC pay $75 for a carton of cigarettes, when citizen 'B' living in NYS pays $55?
Why should either of them pay any taxes at all, when they can buy those same smokes for only $30 from the Indian stores or Internet? Is it any wonder that, already, two thirds (2/3) of the cigarettes that are consumed in NYC are untaxed?*

Can it be the purpose of tax laws are to create less revenue, rob from the poor to give to the rich, help fund terrorism, foster criminal activity, destroy legitimate small business, cause an increase in underage smoking and treat half of our consumers as second class citizens?

The Legislature must act during this session to correct the conditions that you created:

1. Repeal the extra $15.00 per carton of New York City excise tax.
2. Level the New York State Excise tax throughout.
3. Cause our tax to be economically viable with surrounding states.
4. Finally, do what's right and collect the taxes due from non-Indian, Indian sales.
5. Vigorously enforce the non-sales to minors, Internet Bill.
6. Demand that you expect immediate enforcement and compliance with the laws you have enacted.

* When an untaxed carton of cigarettes is consumed in NYC, the State loses more revenue than does the City!
Every taxed pack of cigarettes that is sold in New York City carries an affixed 'JOINT' tax stamp that evidences the prepayment of:
• $15.00 City excise tax
• $15.00 State excise tax
• Approximately, $6.00 in combined sales taxes
• $3.24 Manufacturer State Settlement Payments
The total revenue to the State and City is $39.24 per carton.