Economist: The unintended consequences of hiking Oklahoma’s cigarette tax

From: NewsOK

By Patrick Fleenor

Last fall, while responding to a shooting, police in New Jersey became suspicious of one of the victims and searched a nearby building. Inside they discovered a clandestine factory that attached counterfeit tax stamps to packs of cigarettes smuggled into the state so they could be sold in ordinary stores. Among the items found were 75,736 bogus New Jersey cigarette tax stamps, thousands of packs of bootleg cigarettes from Virginia, two vehicles and $18,722 in cash.

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Its taxes, of course. For years, the Garden State has been home to some of the nation’s highest cigarette excises. Today it is $2.70 per pack, near the level that Gov. Mary Fallin has proposed hiking the Oklahoma’s excise ($2.53). At this rate, bootleggers will be able to earn more than $1 million on every truckload of cigarettes smuggled into the state.

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