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Cigarette Taxes | Cigarette Smuggling by State

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Key Findings:

  • Extreme tax charges on cigarettes induce substantial black and grey market motion of tobacco merchandise into high-tax states from low-tax states or overseas sources.
  • New York has the best inbound smuggling exercise, with an estimated 53.5 p.c of cigarettes consumed within the state deriving from smuggled sources in 2020. New York is adopted by California (44.8 p.c), New Mexico (45.5 p.c), Washington (41.5 p.c), and Minnesota (34.8 p.c).
  • New Hampshire has the best degree of web outbound smuggling at 52.4 p.c of consumption, doubtless resulting from its comparatively low tax charges and proximity to high-tax states within the northeastern United States. Following New Hampshire is Indiana (35.6 p.c), Virginia (27.6 p.c), Idaho (25.8 p.c), Wyoming (24.4 p.c), and North Dakota (18.6 p.c).
  • Illinois and New Mexico considerably elevated their cigarette tax fee from 2019 to 2020. Each states noticed main will increase in cigarette smuggling.
  • Policymakers involved in growing tax charges ought to acknowledge the unintended penalties of excessive taxation charges. Legal distribution networks are well-established and illicit commerce will develop as tax charges rise.

Tobacco Tax Differentials Incentivize Smuggling

Folks reply to incentives. As tax charges improve or merchandise are banned from sale, customers and producers seek for methods round these penalties and restrictions. In cigarette markets, customers have a tendency to buy throughout borders the place the tax charges are decrease and sellers develop black and grey markets to promote illegally to customers, paying little or no tax in any respect. Rising cigarette tax differentials have made cigarette smuggling each a nationwide downside and a profitable prison enterprise.

Every year, students on the Mackinac Heart for Public Coverage estimate cigarette smuggling charges for every state.[1] Their most up-to-date report makes use of 2020 knowledge and finds a robust constructive relationship between cigarette smuggling and tax charges throughout U.S. states and the District of Columbia. The information additionally exhibit that when states improve their cigarette taxes, smuggling charges improve, each within the type of elevated purchases in neighboring states and thru illicit worldwide channels.

Cigarette smuggling increaes as excise tax rates increase

The most important improve in smuggling from 2019-2020 got here in Illinois. Illinois elevated its cigarette tax fee by $1.00 per pack, leading to a brand new state excise tax of $2.98. Together with the $3.00 per pack tax in Prepare dinner County and $1.18 per pack within the metropolis of Chicago brings the full taxes in Chicago to $7.16 per pack. The cigarette taxes in America’s third-largest metropolis are the best within the county.

Web cigarette smuggling in Illinois elevated by greater than 14 proportion factors in 2020, an estimated improve of practically 44 million cigarettes smuggled. This improve was better than all different states mixed, transferring the state from the 16th highest to the 7th highest inbound smuggling fee within the nation. General, Illinois missed out on greater than $334 million in cigarette taxes in 2020 resulting from smuggling, a rise of practically $200 million from 2019.

Illinois’ neighbors—Indiana, Iowa, Kentucky, and Wisconsin—all noticed a rise in outbound smuggling. Desk 1 reveals that outbound smuggling elevated by 17.7 proportion factors in Indiana, greater than $42 million price of income for the Hoosier State, transferring Indiana down 4 spots within the rating of states by web inbound smuggling. Wisconsin additionally noticed a rise in outbound smuggling, including greater than $15 million for the Badger State.

New Mexico elevated its cigarette tax fee by $0.34 per pack in 2020 and noticed its smuggling fee improve by 6.3 p.c, transferring it two ranks larger and giving it the third-highest smuggling fee within the nation, with smuggled cigarettes accounting for 43.46 p.c of the full cigarette market. New Mexico misplaced an extra $19.3 million from the rise in smuggling. Neighboring states Colorado, Oklahoma, and Texas all noticed a rise in outbound smuggling, with the most important income impact coming from Texas.

Nationwide, New York continues to have the best fee of cigarette smuggling, with smuggled cigarettes accounting for 53.5 p.c of complete cigarette consumption within the state. New York additionally has one of many highest state cigarette taxes ($4.35 per pack), not counting the extra native New York Metropolis cigarette tax ($1.50 per pack), yielding a mixed fee of $5.85 per pack.

The inbound move of cigarettes not appropriately taxed by New York prices the state roughly $1.1 billion every year in misplaced income. And the state wants to make use of assets to deal with its black market issues. In 2020, following a long-term investigation into a person’s cigarette smuggling exercise, a course of together with court-authorized search warrants, wiretaps, grand jury subpoenas, and different investigative instruments, New York seized greater than $1.3 million in money and 6,267 cartons of untaxed cigarettes, in response to a press launch from the Queens’ District Legal professional.[2] However even legislation enforcement successes are expensive and solely cease a drop of water within the Hudson River of smuggling exercise.

Smuggling and Income Results Following a Cigarette Tax Price Will increase for Illinois, New Mexico, and Neighboring States
  Smuggling Price Change Rank Change Smuggling Impact Income Change
Illinois 14.0 9 $ (199,003,733)
Indiana -17.7 -4 $42,168,137
Iowa -2.0 -1 $4,523,284
Kentucky -0.3 -1 $900,556
Wisconsin -1.6 -3 $15,004,713
New Mexico 6.3 2 $(19,315,895)
Colorado -0.3 1 $1,159,397
Oklahoma -2.7 -2 $(233,809)
Texas -2.1 -5 $43,111,200
Utah 0.3 -2 $(456,948)
Supply: Mackinac Heart for Public Coverage, Tax Basis, and creator calculations.

A large literature of peer-reviewed educational research helps these findings.[3] A 2017 research printed in Public Finance Overview supplies the tutorial concept and estimates for the way tax charges have an effect on smuggling, highlighting that simply transportable items (e.g., cigarettes) shall be enticing cross-border procuring gadgets.[4] A 2018 research printed in the identical journal supported these findings by analyzing littered packs of cigarettes throughout 132 communities in 38 states, discovering that 21 p.c of packs didn’t have correct native stamps.[5]

LaFaive and Nesbit, the lead authors of the Mackinac Heart research, word that smuggling is available in completely different types: “informal” smuggling, the place smaller portions of cigarettes are bought in a single space after which transported for private consumption, and “industrial” smuggling, which is a large-scale prison exercise that may contain counterfeit state tax stamps, counterfeit variations of reputable manufacturers, hijacked vehicles, and officers turning a blind eye.[6] The Mackinac Heart supplies a number of anecdotes of smuggling exercise over the numerous editions of its report, together with a jail guard caught smuggling cigarettes into prisons, a Maryland police officer working illicit cigarettes whereas on obligation, and a Virginia man hiring a contract killer over a cigarette smuggling dispute.

States and municipalities have spent thousands and thousands to fight cigarette smuggling. Current coverage responses embody better legislation enforcement exercise on interstate roads,[7] differential tax charges close to low-tax jurisdictions,[8] banning frequent provider supply of cigarettes,[9] and cracking down on tribal reservations that promote tax-free cigarettes.[10] Nonetheless, the underlying downside persists. Excessive cigarette taxes act equally to a “worth prohibition” on the authorized product in lots of U.S. states, incentivizing smuggling and illicit exercise.[11]

After New York, the best fee of smuggling happens in California (44.8 p.c of consumption smuggled), New Mexico (45.5 p.c), Washington (41.5 p.c), and Minnesota (34.8 p.c). Of the states for which the authors had knowledge, the best charges of outbound smuggling (least quantity of web inbound smuggling) happen in New Hampshire (52.4 p.c outbound smuggling), Indiana (35.6 p.c), Virginia (27.6 p.c), and Idaho (25.8 p.c).

Cigarette Taxes and Cigarette Smuggling by State tobacco tax rates

Worldwide Smuggling and Counterfeiting Hurts People

Smuggling that happens throughout the borders of the US is usually a zero-sum exercise from a value perspective, and smugglers might even facilitate a rise in complete financial exercise by reducing the market tax burden, albeit at unacceptably excessive social prices (to not point out the innate prison nature of the exercise). A smuggler who legally purchases cigarettes in a low-tax space, comparable to North Carolina, after which sells the cigarettes in a high-tax space, like New York, nonetheless pays tax and buys American-produced items. The tax achieve for North Carolina is probably going lower than the tax loss for New York, whereas the decrease efficient (tax-reduced) worth reduces prices for New York people who smoke. (It could additionally encourage further consumption.)

Nonetheless, some criminals keep away from the authorized market altogether. Quite than pay market costs and decrease taxes on American-made cigarettes, sure criminals produce counterfeit cigarettes with the feel and appear of reputable American manufacturers and promote them with counterfeit tax stamps, paying no tax in any respect. In 2020, three males have been arrested in Texas for transporting internationally produced illicit cigarettes. They admitted intentions to smuggle over 400 million cigarettes.[12]

Many counterfeit cigarettes within the U.S. are smuggled from China. Estimates put the Chinese language counterfeit manufacturing as excessive as 400 billion cigarettes per 12 months to fulfill worldwide demand.[13] Due to the large quantity of product that ships into U.S. ports from China, it might be simpler and decrease value to smuggle Chinese language cigarettes in California markets via U.S. ports than to attempt to capitalize on tax arbitrage by transporting merchandise throughout the continental U.S.

“Low-cost whites” or “illicit whites” are a staple of the worldwide counterfeit market. These generic-looking white cigarettes are produced legally in low-tax jurisdictions, however are sometimes supposed for smuggling.[14] Stories from this 12 months point out that the Chinese language tobacco monopoly is taking part in a big function within the “illicit whites” tobacco markets in Central and South America. A few of these actions spill over into the US.

There are actual social prices related to the smuggling of correctly manufactured cigarettes, however they pale compared to the risks posed by this counterfeit market. Internationally smuggled and counterfeit cigarettes are harmful merchandise as they don’t reside as much as the standard management requirements imposed on reputable model cigarettes. Researchers have discovered that counterfeit cigarettes can have as a lot as seven occasions the lead of genuine manufacturers and shut to 3 occasions as a lot thallium, a poisonous heavy metallic.[15] Different sources report discovering insect eggs, lifeless flies, mould, and human feces in counterfeit cigarettes.[16]

In the course of the prohibition of alcohol in the US through the Twenties, elevated enforcement did not considerably lower the prevalence of bootlegging as a result of the revenue margins have been so giant, and the distribution networks refined. The identical is true for immediately’s cigarette smugglers.

In June 2019, Canadian authorities arrested 9 individuals who reportedly smuggled over a million kilos of tobacco (valued at CA $110 million). In accordance with police, the group was concerned in each theft and arms trafficking.[17] That very same 12 months, European authorities arrested 22 folks throughout 5 international locations representing an organized crime ring suspected of large-scale cigarette trafficking, drug trafficking, assassinations, and cash laundering which had netted an estimated $750 million over two years.[18] Final 12 months in Spain, authorities busted an underground unlawful cigarette manufacturing facility. The organized crime community behind the operation is suspected of large-scale cigarette trafficking with income estimated at $647,000 per week.[19]

World illicit commerce in tobacco is a rising downside, but it surely’s thought-about low-risk, high-reward. Incentives matter. Billions of {dollars} are made every year via smuggling. To make issues worse, smuggling operations contain corruption, cash laundering, and terrorism.[20] In accordance with the Monetary Motion Job Power (FATF), “Giant-scale organized smuggling doubtless accounts for the overwhelming majority of cigarettes smuggled globally.”[21] These operations damage governments, who lose out on income; customers, as a result of the merchandise usually don’t adhere to well being requirements; authorized companies, which can not compete with illicit merchandise; and the final respect of the legislation.

Taxes Are Not the Solely Coverage That Encourages Smuggling

We are able to be taught from cigarette taxes how different insurance policies involving tobacco and nicotine merchandise might have an effect on shopper and producer habits.

Most vapor product customers, for instance, additionally smoke or beforehand smoked cigarettes.[22] As the worth of vaping will increase, fewer customers shall be prepared to modify to vaping from smoking and extra customers will take into account black market options to paying hefty cigarette taxes. With the addition of Maryland in 2022, 30 states and the District of Columbia now levy a vaping excise tax.[23]

Vaping gadgets have develop into tough to promote due to regulatory modifications on the Meals and Drug Administration (FDA). The FDA is at present reviewing a backlog of purposes for vapor merchandise and thus far has denied market approval for nearly all of them.[24] The most important headline within the vaping area in 2022 was the FDA’s advertising and marketing denial order for Juul, forcing all of Juul’s merchandise off U.S. cabinets. [25] The FDA’s Juul ban was placed on maintain following a lawsuit from Juul, however the future stays unsure for many U.S. vaping merchandise. Furthermore, it’s nonetheless unclear what is going to stay of the nicotine market after the FDA’s premarket tobacco software (PMTA) evaluation course of.

As the information from cigarettes clearly present, the danger of making a brand new black market or fueling an present one with operators prepared and capable of provide nicotine merchandise to customers is important. Along with tax evasion—costing states billions in misplaced tax income—black market e-liquid and cigarettes may be extraordinarily unsafe.[26] A number of stories have confirmed nicotine-containing liquid coming into the U.S. from questionable sources.[27] In 2019, circumstances of great pulmonary ailments prompted the FDA to publish a warning about black market THC-containing liquid (the psychoactive compound in marijuana).[28] Stories of illicit merchandise containing harmful chemical substances leading to severe medical circumstances additionally arose in 2019.[29] Offering vapers with a well-regulated authorized market will restrict the distribution of unlawful merchandise.

Taste bans are maybe the most important coverage situation involving tobacco and nicotine merchandise over the previous decade. A number of states and municipalities are contemplating taste bans on cigarettes and e-vapors.[30] This 12 months, the FDA proposed a rule that may prohibit the sale of menthol cigarettes and flavored cigars.[31] If imposed, the lower in state and federal revenues can be substantial and certain gasoline considerably larger ranges of cigarette smuggling.[32]

The primary and solely state to implement a statewide menthol taste ban is Massachusetts. Their menthol taste ban took impact in June 2020. Within the 12 months following implementation, gross sales within the Bay State declined by nearly 24 p.c in comparison with the 12 months previous the ban. By way of the tip of 2021, gross sales have been down greater than 25 p.c in comparison with gross sales from 2019. This decline interprets to $135 million much less cigarette tax income for Massachusetts (not together with misplaced income from gross sales tax and smokeless tobacco gross sales).

Importantly, these gross sales didn’t disappear; many of the transactions merely moved to neighboring states or to illicit markets. All through many of the U.S. and all of the New England states, cigarette gross sales have always declined because the Sixties. It was telling when gross sales of cigarettes in New Hampshire elevated by 22 p.c and gross sales in Rhode Island elevated by 18 p.c within the 12 months following the Massachusetts menthol ban. Gross sales in New Hampshire and Rhode Island stay roughly 10 p.c larger in 2021 than in 2019 because of cross-border Massachusetts buyers and smugglers.

Authorized markets undergo as untaxed and unregulated merchandise have important aggressive benefits over high-priced authorized merchandise. Along with the risks illicit markets create for customers, unlawful markets hurt the big variety of small enterprise house owners working vape retailers, comfort shops, and fuel stations across the nation. The impression on native companies has led a number of Massachusetts lawmakers to contemplate repealing the state’s ban on flavored tobacco.[33]

Trying to the longer term, the Biden Administration and the FDA dedicated to issuing a proposed product rule by Might 2023 that may mandate a discount of nicotine ranges in cigarettes by as a lot as 95 p.c.[34] If applied, the rule would quantity to a prohibition on cigarettes. In a single day, all gross sales of conventional cigarettes can be categorised as black market exercise. Smuggling would skyrocket. Policymakers ought to take into account the unintended penalties as they set charges and regulatory regimes for all tobacco and nicotine merchandise.

State Cigarette Smuggling as a Share of Complete State Cigarette Consumption (Authorized and Unlawful), 2020
State 2020 State Tax Price Tax Price Change (2019-2020) 2020 Smuggling Charges (constructive is influx, adverse is outflow) 2020 Rank Rank Change (2019-2020) Tax Price improve Since 2006 2020 Smuggling Income Affect Smuggling Impact Income Change (2019-2020)
Alabama $0.68 0.0 -2.32% 34 0 59% $3,814,685 $(647,939)
Arizona $2.00 0.0 33.53% 6 -2 69% $(153,654,548) $21,113,456
Arkansas $1.15 0.0 2.49% 29 0 No change $(4,209,441) $(132,073)
California $2.87 0.0 44.82% 2 0 230% $ (1,391,937,097) $134,781,930
Colorado $0.84 0.0 7.96% 22 1 No change $ (12,222,957) $1,159,397
Connecticut $4.35 0.0 26.69% 8 -1 188% $(117,536,590) $4,657,733
Delaware $2.10 0.0 -12.23% 40 0 282% $11,628,819 $(906,220)
Florida $1.34 0.0 14.57% 17 1 294% $(172,771,798) $427,120
Georgia $0.37 0.0 -4.24% 37 0 No change $6,682,254 $(250,472)
Idaho $0.57 0.0 -25.80% 44 2 No change $7,130,835 $(947,583)
Illinois $1.98 100.0 29.21% 7 9 204% $(334,051,938) $ (199,003,733)
Indiana $1.00 0.0 -35.56% 46 -4 79% $98,982,271 $42,168,137
Iowa $1.36 0.0 7.81% 23 -1 278% $ (15,027,410) $4,523,284
Kansas $1.29 0.0 20.23% 14 1 63% $ (29,861,189) $(735,062)
Kentucky $0.60 0.0 -0.07% 31 -1 267% $242,018 $900,556
Louisiana $1.08 0.0 9.52% 21 0 200% $ (26,113,609) $6,922,163
Maine $2.00 0.0 7.24% 24 0 No change $(9,549,740) $829,006
Maryland $2.00 0.0 0.04% 30 1 100% $(137,433) $258,054
Massachusetts $3.51 0.0 26.52% 9 3 132% $(172,646,363) $(39,524,710)
Michigan $2.00 0.0 19.65% 15 -1 No change $(195,055,804) $4,630,113
Minnesota $3.61 2.2 34.76% 5 1 146% $(268,511,137) $11,513,926
Mississippi $0.68 0.0 2.93% 28 0 36% $(3,334,730) $(34,419)
Missouri $0.17 0.0 -17.78% 41 0 No change $11,362,796 $752,021
Montana $1.70 0.0 21.44% 11 0 No change $ (17,578,901) $188,462
Nebraska $0.64 0.0 -0.71% 32 0 No change $347,616 $(72,203)
Nevada $1.80 0.0 -10.45% 39 0 125% $15,781,648 $(2,793,648)
New Hampshire $1.78 0.0 -52.40% 47 0 123% $67,691,087 $(10,441,724)
New Jersey $2.70 0.0 -2.38% 35 0 13% $13,121,679 $(2,474,874)
New Mexico $1.66 34.0 43.46% 3 2 120% $ (65,631,736) $(19,315,895)
New York $4.35 0.0 53.51% 1 0 190% $ (1,093,105,229) $63,177,060
North Dakota $0.44 0.0 -18.62% 42 1 No change $3,086,808 $62,365
Ohio $1.60 0.0 6.66% 25 0 28% $ (60,397,981) $7,015,881
Oklahoma $1.03 0.0 12.28% 19 -2 97% $ (52,331,494) $(233,809)
Oregon $1.33 0.0 3.29% 26 0 15% $(6,407,460) $649,735
Pennsylvania $2.60 0.0 12.03% 20 0 93% $(158,976,717) $18,888,788
Rhode Island $4.25 0.0 23.33% 10 -1 73% $ (39,693,441) $(22,919)
South Carolina $0.57 0.0 -1.37% 33 0 14% $1,885,882 $(38,897)
South Dakota $1.53 0.0 12.38% 18 1 189% $(6,979,967) $340,558
Tennessee $0.62 0.0 -3.17% 36 0 210% $6,787,032 $(397,354)
Texas $1.41 0.0 20.50% 13 -5 244% $(300,290,879) $43,111,200
Utah $1.70 0.0 21.35% 12 -2 145% $ (23,810,599) $(456,948)
Vermont $3.08 0.0 3.16% 27 0 72% $(1,909,160) $166,795
Virginia $0.30 0.0 -27.58% 45 0 No change $29,415,891 $(1,177,891)
Washington $3.03 0.0 41.58% 4 -1 49% $(231,269,123) $17,206,019
West Virginia $1.20 0.0 -5.51% 38 0 118% $8,326,778 $(956,903)
Wisconsin $2.52 0.0 18.15% 16 -3 227% $(117,074,083) $15,004,713
Wyoming $0.60 0.0 -24.35% 43 1 No change $3,160,338 $(49,266)
Supply: Mackinac Heart for Public Coverage, Tax Basis, and creator calculations.

References

[1] Michael Lafaive, Todd Nesbit, and Ulrik Boesen, “Cigarette Taxes & Smuggling,” Mackinac Heart for Public Coverage, June 2022, https://www.mackinac.org/smokes.

[2] “Cigarette Smuggler Pays Extra Than $1.3 Million To New York State After Pleading Responsible to Grand Larceny,” Workplace of Queens District Legal professional Melinda Katz, October 7, 2020, https://queensda.org/cigarette-smuggler-pays-more-than-1-3-million-to-new-york-state-after-pleading-guilty-to-grand-larceny/.

[3] Cf Michael F. Lovenheim, “How Far to the Border?: The Extent and Affect of Cross-Border Informal Cigarette Smuggling,” Nationwide Tax Journal 61:1 (March 2008), https://www.ntanet.org/NTJ/61/1/ntj-v61n01p7-33-how-far-border-extent.pdf?v=%CE%B1&r=04833355782549953; R. Morris Coats, “A Notice on Estimating Cross-Border Results of State Cigarette Taxes,” Nationwide Tax Journal 48:4 (December 1995): 573-584, https://www.ntanet.org/NTJ/48/4/ ntj-v48n04p573-84-note-estimating-cross-border.pdf?v=%CEpercentB1&r=35923133871196367; Mark Stehr, “Cigarette tax avoidance and evasion,” Journal of Well being Economics 24:2 (March 2005): 277-297, http://www.sciencedirect.com/science/article/pii/S0167629604001225.

[4] Adam J. Hoffer and Donald J. Lacombe, “Excise tax setting in a dynamic space-time framework,” Public Finance Overview 45:5 (2017): 628-646.

[5] Shu Wang, David Merriman, and Frank Chaloupka, “Relative Tax Charges, Proximity, and Cigarette Tax Noncompliance: Proof from a Nationwide Pattern of Littered Cigarette Packs,” Public Finance Overview 47:2 (March 2019): 276-311.

[6] Scott Drenkard, “Tobacco Taxation and Unintended Penalties: U.S. Senate Listening to on Tobacco Taxes Owed, Averted, and Evaded,” Tax Basis, July 29, 2014, https://taxfoundation.org/tobacco-taxation-and-unintended-consequences-us-senate-hearing-tobacco-taxes-owed-avoided-and-evaded/.

[7] Gary Fields, “States Go to Battle on Cigarette Smuggling,” The Wall Road Journal, July 20, 2009, http://www.wsj.com/articles/SB124804682785163691.

[8] Mark Robyn, “Border Zone Cigarette Taxation: Arkansas’s Novel Resolution to the Border Purchasing Drawback,” Tax Basis, Apr. 9, 2009, http:// taxfoundation.org/article/border-zone-cigarette-taxation-arkansass-novel-solution-border-shopping-problem.

[9] Curtis S. Dubay, “UPS Choice Unlikely to Cease Cigarette Smuggling,” Tax Basis, Oct. 25, 2005, https://taxfoundation.org/ ups-decision-unlikely-stop-cigarette-smuggling/.

[10] Joseph Bishop-Henchman, “New York Governor Indicators Legislation to Tax Cigarettes Bought on Tribal Lands,” Tax Basis, Dec. 16, 2008, http://taxfoundation.org/ weblog/new-york-governor-signs-law-tax-cigarettes-sold-tribal-lands.

[11] Michael LaFaive, “Prohibition by worth: Cigarette taxes and unintended penalties.” In For Your Personal Good: Taxes, Paternalism, and Fiscal Discrimination within the Twenty-First Century, edited by Adam Hoffer and Todd Nesbit (2018).

[12]  St. John Barned-Smith and Gabrielle Banks, “Contained in the profitable smuggling operation that sees thousands and thousands of Chinese language cigarettes go via Texas,” Houston Chronicle, July 1, 2021, https://www.houstonchronicle.com/news/houston-texas/crime/article/china-cigarettes-tobacco-trafficking-tx-16281704.php.

[13] Te-Ping Chen, “China’s Marlboro Nation,” Heart for Public Integrity, June 29, 2009, https://reportingproject.web/underground/index. php?choice=com_content&view=article&id=9:chinas-marlboro-country&catid=3:tales&Itemid=22.

[14] Roger Bate, Cody Kallen, and Aparna Mathur, “The perverse impact of sin taxes: the rise of illicit white cigarettes,” Utilized Economics, Aug. 5, 2019, https://www.tandfonline.com/doi/abs/10.1080/00036846.2019.1646403?journalCode=raec20.

[15] R.S. Pappas et al., “Cadmium, Lead, and Thallium in Smoke Particulate from Counterfeit Cigarettes In comparison with Genuine US Manufacturers,” Meals and Chemical Toxicology 45:2 (Aug. 30, 2006): 202-209.

[16] Worldwide Chamber of Commerce, Business Crime Providers, “Counterfeit Cigarettes Include Disturbing Poisonous Substances,” https://icc-ccs.org/index. php/360-counterfeit-cigarettes-contain-disturbing-toxic-substances.

[17] CTV Information, “9 arrested in main contraband tobacco bust,” June 26, 2019, https://montreal.ctvnews.ca/ nine-arrested-in-major-contraband-tobacco-bust-1.4483651.

[18] The Guardian, “Greater than 20 arrested throughout Europe in swoop on drug gang,” Might 22, 2019, https://www.theguardian.com/uk-news/2019/ might/22/22-arrested-across-europe-in-swoop-on-alleged-dangerous-drug-gang.

[19] Graham Keeley, “British gang abandons staff in underground cigarette manufacturing facility,” Al Jazeera, Feb. 20, 2020, https://www.aljazeera.com/ information/2020/2/20/british-gang-abandons-workers-in-underground-cigarette-factory.

[20]Al Qaeda has made thousands and thousands of {dollars} promoting counterfeit cigarettes. See

Francesca Astorri, “EXCLUSIVE: How extremists smuggled $1 billion in cigarettes to finance terror,” AlArabiya Information, Might 20, 2020,  https://english.alarabiya.net/features/2017/10/14/Smuggling-cigarettes-new-source-of-terror-financing-worth-1bn-in-North-Africa; DOS, DOJ, DOT, DOHS, DOHHS, “The World Illicit Commerce in Tobacco: A Menace To Nationwide Safety,” December 2015, https://2009-2017.state.gov/documents/organization/250513.pdf.

[21] The Monetary Motion Job Power (FATF), “FATF Report: Illicit Tobacco Commerce,” June 2012, 9, https://www.fatf-gafi.org/media/fatf/paperwork/stories/ Illicitpercent20Tobaccopercent20Trade.pdf.

[22] Fact Initiative, “E-cigarettes: Details, stats and rules,” July 19, 2018, https://truthinitiative.org/research-resources/ emerging-tobacco-products/e-cigarettes-facts-stats-and-regulations.

[23] Adam Hoffer, “Vapor Taxes by State, 2022,” July 5, 2022, https://taxfoundation.org/vapor-taxes-2022/.

[24] Katherine Ellen Foley, “FDA says greater than 5 million digital cigarettes should be taken off the market,” Politico, Sept. 9, 2021, https://www.politico.com/news/2021/09/09/fda-electronic-cigarettes-off-market-510967.

[25] U.S. Meals and Drug Administration, “FDA Denies Authorization to Market JUUL Merchandise,” June 23, 2022,  https://www.fda.gov/news-events/press-announcements/fda-denies-authorization-market-juul-products.

[26] Nationwide Analysis Council and Institute of Medication, Understanding the U.S. Illicit Tobacco Market: Traits, Coverage Context, and Classes from Worldwide Experiences (Washington, DC: Nationwide Academies Press, 2015), 4, https://www.nap.edu/learn/19016/chapter/1.

[27] Julie Bosman and Matt Richtel, “Vaping Unhealthy: Have been 2 Wisconsin Brothers the Walter Whites of THC Oils?” The New York Occasions, Sept. 17, 2019, https://www. nytimes.com/2019/09/15/well being/vaping-thc-wisconsin.html.

[28] U.S. Meals and Drug Administration, “Vaping Sickness Replace: FDA Warns Public to Cease Utilizing Tetrahydrocannabinol (THC)-Containing Vaping Merchandise and Any Vaping Merchandise Obtained Off the Road,” Oct. 4, 2019, https://www.fda.gov/customers/consumer-updates/ vaping-illnesses-consumers-can-help-protect-themselves-avoiding-tetrahydrocannabinol-thc-containing.

[29] David Downs, Dave Howard, and Bruce Barcott, “Journey of a tainted vape cartridge: from China’s labs to your lungs,” Leafly, Sept. 24, 2019, https:// www.leafly.com/information/politics/vape-pen-injury-supply-chain-investigation-leafly; Conor Ferguson, Cynthia McFadden, Shanshan Dong, and Wealthy Schapiro, “Checks present bootleg marijuana vapes tainted with hydrogen cyanide,” NBC Information, Sept. 27, 2019, https://www.nbcnews.com/well being/vaping/ tests-show-bootleg-marijuana-vapes-tainted-hydrogen-cyanide-n1059356.

[30] Adam Hoffer, “New Jersey Menthol Ban Will Be All Ache and No Achieve,” July 27, 2022, https://taxfoundation.org/new-jersey-menthol-cigarette-ban/.

[31] U.S. Meals and Drug Administration, “FDA Proposes Guidelines Prohibiting Menthol Cigarettes and Flavored Cigars to Forestall Youth Initiation, Considerably Cut back Tobacco-Associated Illness and Demise,” April 28, 2022, https://www.fda.gov/news-events/press-announcements/fda-proposes-rules-prohibiting-menthol-cigarettes-and-flavored-cigars-prevent-youth-initiation

[32] Ulrik Boesen, “Federal Menthol Cigarette Ban Might Price Governments $6.6 Billion,” March 2, 2022,  https://taxfoundation.org/federal-menthol-cigarette-ban/;  Adam Hoffer, “ FDA Ban on Flavored Cigars Might Price $836 Million in Annual Excise Tax Income,” August 17, 2022, https://taxfoundation.org/fda-ban-flavored-cigars/; Ulrik Boesen, “Banning Flavored Tobacco Might Have Unintended Penalties,” Tax Basis, Feb. 12, 2020, https://www.taxfoundation.org/banning-flavored-tobacco-unintended-consequences/.

[33] Jodi Reed, “State lawmakers to contemplate repealing ban on menthol cigarettes and flavored tobacco,” WWLP, Nov. 3, 2021, https://www.wwlp.com/news/state-politics/state-lawmakers-to-consider-repealing-ban-on-menthol-cigarettes-and-flavored-tobacco/.

[34] Govt Workplace of the President, “Tobacco Product Normal for Nicotine Degree of Sure Tobacco Merchandise,” June 21, 2022. https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202204&RIN=0910-AI76.

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