Usurious tobacco taxes a criminal enterprise

As noted in my last post, the sale of contraband tobacco products, mostly cigarettes, is a growing concern here in Canada where sales of illegal (untaxed) tobacco in Ontario are now estimated at 50% of the market. And bootleggers, once confined largely to Ontario and Quebec, appear to be expanding into other provinces across the country.

The black market is driven by extreme (and extremely punitive) levels of taxation imposed on legal tobacco products. And the growing market in contraband, in turn, has generated some serious social and economic problems.

The huge black market has a negative impact on sales of legal (over-taxed) tobacco, meaning reduced income for tobacco manufacturers, wholesalers and retailers, and less tobacco tax revenue for government. It means cheap contraband tobacco is available to young people who would not have access to the legal product. In addition, more and more police resources are required to combat the “criminal activity.”

A commenter on my previous post rightly suggested that the problem of contraband is international in scope. He points to a series of raids in Manchester, England where substantial amounts of illegal and counterfeit tobacco products were seized. Similar raids have been conducted here in Canada (and other parts of the world). They're usually announced via a press conference with maximum publicity.

Feeble (and futile) attempts to scare the populace and discourage participation in contraband activity.

In reference to the Manchester raids, Graham Forbes, from HMRC (Her Majesty's Revenue and Customs) claimed: "The unregulated sale of illegal cigarettes and alcohol is not a victimless or harmless crime, and encourages otherwise honest people to trade with criminals.”

But what the bureaucrats and politicians around the world refuse to acknowledge is that what “encourages otherwise honest people to trade with criminals” is the felonious level of taxation (read extortion) demanded by governments to engage in a perfectly legal activity – the consumption of tobacco by an adult population.

In jurisdictions around the globe, extortionate levels of taxation are leading tobacco consumers to seek alternate, less costly, sources of supply. They're left with little choice; either pay the legalized extortion demanded by greedy governments and their puppet masters in the anti-smoker cult, or turn to the more reasonably priced product offered on the black market.

I've made my choice. And so have hundreds of thousands of other, adult smokers in Canada and (likely) millions globally. Smokers are beginning to realize that extortion is a criminal act, whether perpetrated by governments or mobsters. And, they're beginning to rebel against the criminal activity of their governments.

The question is; why do governments insist on ever-increasing levels of tobacco taxes when the adverse consequences are so readily apparent? Why the insistence on treating smokers like social outcasts and second class citizens for engaging in a legal activity from which governments derive a substantial amount of revenue?

The facts are that governments around the globe have bought into the bullshit and bafflegab of militant anti-smoker fanatics and their continuing experiments in behaviour control. Smokers, they were told, wanted to quit. They just needed a little “encouragement”. And, according to the anti-smoker cult, penalizing smokers financially is the most effective way to encourage them to give up the habit.

And, of course, revenue generated by increased taxes could result in additional funding for other anti-smoker initiatives to harass and de-normalize smokers.

But, smokers aren't quitting in droves in response to ever-increasing taxes. Instead, in growing numbers, they're buying their smokes from the trunk of a car rather than their friendly neighbourhood convenience store. Legitimate retailers are losing money. Some dealers in contraband are becoming wealthy. They're also being seen as champions by many ordinarily honest people who are determined to resist government attempts to force them to change their personal lifestyle behaviours.

But, despite evidence from jurisdictions around the world that usurious levels of tobacco taxation have serious, unintended social and economic consequences, the anti-smoker cult continues to push for increasing levels of tobacco taxation at every opportunity. And, greedy politicians, blinded by dollars signs, appear ready and willing to support the anti-smoker crusade.

Tax increases bring in some additional revenue in the short term, but it is seldom sustainable as smokers turn to black markets which are sure to emerge, bringing undesirable and unnecessary social and economic problems.

In Ontario, tobacco tax revenue was $493 million in 2000/2001. By 2004/2005, following a series of draconian increases, provincial tax revenue had tripled to $1.45 billion. By 2008/2009 Ontario's tax revenue had dropped to $1.04 billion. And, the decline in revenues continues as more and more smokers resort to the flourishing black market to supply the demand for a legal product at a reasonable price.

Maybe if gullible politicians were to use some common sense instead of relying on the morally bankrupt policies of the anti-smoker cult . . .

No, it'll never happen.