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Tax increase to boost tobacco black market?  

Cessation help line receiving many more calls
Jump to full article: Tucson (AZ) Citizen, 2009-04-13
Author: B. POOLE Tucson Citizen

Intro:

The rising price of tobacco is rippling across Arizona, forcing smokers to dig deeper for cash, sparking a potential black market boost and prompting an increase in calls to a state cessation help line.

The federal tax on a pack of cigarettes April 1 went from 39 cents to $1.01, which raises the price by about 10 percent. Cigar taxes went up 40 cents per stick, about a 10 percent increase for most smokers.

The tax on bulk tobacco - the roll-your-own type many smokers have turned to lately to save money - went from $1.09 per pound to $24. That's a 2,102 percent increase.

"They're creating a whole new black market, is what they're doing," said Dan Johnson, 54, a 30-year smoker who rolls his own. "There's going to be a lot more smuggling, that's for sure."

A couple of weeks ago, the price of a packet of "rollies" was about $1.25; now it's approaching $4, said Johnson, a day laborer who can ill afford the added cost.

The state Department of Revenue confirms that rising costs spur the black market.

Revenue Agent Jack Doyle told a state Bureau of Tobacco Education and Prevention Program committee in January that black market products from Mexico, Indian reservations and states with lower or no taxes take money from the state coffers. . . .

"If you can buy a carton of cigarettes in Mexico for $7 and sell it here for more, why not?"

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