April 8, 2009 By Wayne Hanson
A pack of cigarettes in New York City brings in $2.75 state excise tax, $1.50 city excise tax , $1.01 in federal excise tax, with an 8.375% sales tax. So a pack of cigarettes costs about $10 in the city, about $95 per carton with taxes and fees. But the same carton sells for only $41 on the Internet. According to New York Congressman Anthony D. Weiner, Internet sales of cigarettes cost the city of New York up to $150 million in tax revenue. To plug this loophole, Weiner says that Congress is going to consider legislation to make it illegal to mail cigarettes. Meanwhile cigarette companies are forced to fund anti-smoking ads.
In California, state Assemblyman Tom Ammiano of San Francisco has sponsored a bill to legalize marijuana growth, possession and sale. The bill would also ban local and state authorities from enforcing federal drug laws related to marijuana. A state tax of $50 per ounce would be levied, which according to some published accounts would produce over a billion dollars per year in new revenues, some of which would go toward "drug abuse prevention." And on the other side of the ledger, law enforcement could stop enforcing marijuana laws leaving it free to enforce other things.
And then of course, government agencies running lotteries are attempting to protect "their" gambling from Internet gaming, claiming that it cuts into "the people's revenues," some of which go to fund "gambling addiction" programs.
Government seems to think it can profit from the poison while throwing coins at some supposed antidote. It is jumping into profitable ventures and legislating against "the competition." And to that extent, it is failing to carry out its duties to protect and serve society and the public. Government entangled in "sin-tax" revenues may lose sight of the mission in pursuit of the gold.