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by runamok
on Sat Oct 10, 2009 7:59 pm |
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libertarian99 wrote: Wonder how this will affect our cigarette prices.
Interesting to ponder if the tobacco companies involved in the MSA raised their prices in other countries in order to pay off the states here and if so, would the companies involved in the Canadian version (assuming they lose) raise their prices here in the U.S. to help cover it, effectively paying off the Canadian provinces with money out of the pockets of U.S. citizens. |
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runamok
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by libertarian99
on Sat Oct 10, 2009 10:17 pm |
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runamok wrote: libertarian99 wrote: Wonder how this will affect our cigarette prices.
Interesting to ponder if the tobacco companies involved in the MSA raised their prices in other countries in order to pay off the states here and if so, would the companies involved in the Canadian version (assuming they lose) raise their prices here in the U.S. to help cover it, effectively paying off the Canadian provinces with money out of the pockets of U.S. citizens.
I found this interesting press release about the lawsuit on Imperial Tobacco's Web site.
http://www.imperialtobaccocanada.com/onewebca/sites/IMP_5TUJVZ.nsf/vwPagesWebLive/DO7QFQKP/$FILE/medMD7WDGXF.pdf?openelement
Apparently the Canadian government is losing so much money from illegal cigarette trafficking, they have to find some way to recoup it. Of course, the illegal trafficking is their own fault for making it harder for people to buy legal cigarettes, but somehow these people are blind to their own role in creating the problem. |
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libertarian99
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by garhkal
on Sun Oct 11, 2009 1:07 am |
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| How bad of a situation do they hve with black market ciggies? |
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garhkal
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by libertarian99
on Sun Oct 11, 2009 10:33 am |
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garhkal wrote: How bad of a situation do they hve with black market ciggies?
According to the Imperial Tobacco press release...
"...A release published by the Auditor General of Ontario in December 2008 stated that the province lost more than $500 million in uncollected tobacco taxes in 2007-2008 due to contraband. Imperial Tobacco Canada estimates this number to be $1 billion today.
Ontario is a world leader in illegal tobacco and has higher rates of contraband than such countries as Nigeria and Pakistan. Legal tobacco production in Canada is a highly regulated industry subject to over 200 laws and regulations, with provincial and federal regulators closely monitoring the industry and collecting billions in revenue."
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Canada has a history of cracking down on tobacco, then backing off due to out-of-control smuggling and associated crime. This link tells how they were forced to repeal cigarette tax increases in 1994 due to the proliferation of black market activity.
http://www.nytimes.com/1994/02/09/world/canada-cuts-cigarette-taxes-to-fight-smuggling.html
What happens in Canada has an impact on us, as noted in this quote from the article:
"...As the Canadian Government and Quebec acted today to lower their taxes, President Clinton served notice in his budget message to Congress on Monday that he will ask for a dramatic increase in American cigarette taxes.
Under the Clinton plan, a pack of 20 cigarettes, costing an average of $1.75 would be taxed an additional 75 cents, or $7.50 a carton, on top of the existing Federal levy of 52 cents. An American dollar is worth about $1.30 in Canadian currency.
American health officials lamented the Canadian decision.
"The U.S. tobacco industry is salivating over what's going on in Canada," said John Bloom, the American Cancer Society's policy director, and will try to convince the American public that "tobacco taxes don't work when, in fact Canada has proven that tobacco taxes save lives and raise revenue."
Kerrie B. Wilson, national vice president for government relations for the cancer society, said, "Low U.S. taxes are the chief cause of the smuggling problem Canada faces, and raising U.S. taxes is the best solution." |
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libertarian99
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by garhkal
on Sun Oct 11, 2009 5:12 pm |
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| How is raising taxes the best solution to smuggling issues?? Wont it cause more? |
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garhkal
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by libertarian99
on Sun Oct 11, 2009 7:37 pm |
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garhkal wrote: How is raising taxes the best solution to smuggling issues?? Wont it cause more?
It's similar to the way things are now along state borders in the US. If you live in a state with a high tax, and you can drive 10 miles to a neighboring state to get much cheaper cigarettes, you will probably do that and possibly bring back a few cartons for friends.
In the US, people can buy a truckload of cigarettes in North Carolina, drive to New York, and sell them at a substantial profit because New York taxes are so exorbitant. If North Carolina raised their tax to match New York, the smuggling would stop because without the tax disparity, smugglers can't make a profit. |
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libertarian99
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