Tobacco Taxes Finance Terrorism
Tobacco-tax-hiking politicians have created a situation in which lighting a cigarette is like igniting the fuse on a bomb.


Deroy Murdock

The next terror attack on America could be a self-inflicted wound – specifically, a cigarette burn.

Politicians expand tobacco taxes to discourage smoking and to feed their own nicotine-like addiction to public spending. Like so many others, this government action smolders with unintended consequences. Tobacco taxes create a perfect arbitrage opportunity that radical Muslims exploit to collect money for terrorist groups that murder Americans and our allies. Tobacco taxes should be cut, or at least frozen, before they fuel further Islamic-extremist violence.

Consider the first attack on the Twin Towers, which killed six and injured 1,040. As Patrick Fleenor recalled in a Cato Institute study, “counterfeit cigarette tax stamps were found in an apartment used by members of the Egyptian Islamic Jihad cell that carried out the 1993 bombing of the World Trade Center.”

Smugglers buy cigarettes in low-tax states, disguise them with bogus tax stamps, sell them in corresponding high-tax locales, and pocket the difference. A $2.70 spread separates Virginia’s 30-cent-per-pack cigarette tax and Connecticut’s at $3.00. Driving 1,500 cigarette cartons (ten packs per carton) from Arlington to Hartford yields $40,500 per trip.

This incentive grows as tax-hungry politicians raise tobacco levies to finance government spending. President Obama signed a 62-cent-per-pack federal cigarette-tax increase — from 39 cents to $1.01. This violated Obama’s solemn pledge that families earning less than $250,000 “will not see any of your taxes increase one single dime.”

Gov. David Paterson (D., N.Y.) wants to boost per-pack taxes from $2.75 to $3.75. Assemblyman Michael Den Dekker (D., Queens) proposes a one-penny “deposit” on every cigarette, or 20 cents per pack. This is refundable, if smokers drag their cigarette butts back from whence they came. If Paterson and Den Dekker prevail, add Gotham’s $1.50-per-pack tax and Uncle Sam’s take. Manhattan smokers could pay $6.46 per pack in taxes alone!

Terrorists move cigarettes because they are light, portable, and otherwise legal, and produce cash. “Law enforcement officials in New York State estimate that well-organized cigarette smuggling networks generate between $200,000-$300,000 per week,” a 2008 House Homeland Security Committee Republican staff report concluded. “A large percentage of the money is believed to be sent back to the Middle East, where it directly or indirectly finances groups such as Hezbollah, Hamas, and al-Qaeda.”