I’m always a little taken aback that normally intelligent people just don’t seem to get the fact that for the most part, without government, there can be no “blackmarket”:
Indiana’s cigarette tax is relatively low. Chicago has been complaining for some time that people will go to the Hoosier State, buy a few cartons, then come back to Chicago and sell them at prices undercutting Illinois rates, but still make money. Kentucky, though its tax isn’t too high, also finds its citizens crossing into Indiana to buy their tobacco to sell them cheaper back home. It’s called the black market and high tobacco taxes foster this criminal enterprise.
Now California wants to hike taxes to some of the highest rates in the country.
Democrat State Senator Kevin De Leon has introduced a plan to hike cigarette taxes (SB 768 ) in order to pay for more state spending. But this idea is nothing new and has been defeated several times before. Even law enforcement has been against these tax hikes because such plans embolden dangerous criminals
States with high tobacco taxes like New York have reported higher levels of black-market smuggling, a big source of money for gangs and organized crime. By one 2011 estimate three of every five cigarettes smoked in the Empire State was purchased illegally.
If government doesn’t a) make something “illegal” or b) tax it to the point that other sources of a wanted commodity from states which tax it less become attractive, how would a blackmarket form among voluntary traders?