Nanny State Out Of Control

  • Sunday, December 7, 2014

Rand Paul got it right. The Eric Garner case is more than a race issue, this is a nanny state out of control.  The law of unintended consequences is a concept politicians apparently do not grasp or they wish to ignore. Eric Garner was in the business of selling bootleg cigarettes for one reason and one reason only. New York State and New York City incentivized him.  Excessive taxation (to change behavior) by state and local governments created a black market where cigarettes from other states could be purchased and resold to the point where over 56 percent of all cigarettes sold in New York are illegal.  A study by the Tax Foundation in 2012 gave an example in which smugglers could profit an estimated $4 million on 800 cases when buying the cigarettes in a low-tax state like Virginia and then selling them in New York City. 

In March of this year in order to solve the very problem New York created the state government formed a 13 agency task force that includes the federal government’s involvement to go after people like Eric Garner. Governor Cuomo said, “This new law-enforcement strategy will help to crack down on these illegal cigarette sales and capture those smugglers who seek to evade the law and rob the state of the revenue it is rightly owed.” According to the Tax Foundation, the underlying problem that contributes to cigarette smuggling is high taxes that amount to a “price prohibition” of the product in many U.S. states. 

Seems to me an obvious and more realistic solution to stop or to slow down the flow of illegal cigarettes is to simply lower taxes to where it cost more to buy bootleg cigarettes than it would cost individuals to purchase legally.   

Once again, government creates a problem (black market sale of cigarettes) and they believe they can solve the problem with the formation of a task force, good luck with that. 

Mike Lynn

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