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May 20, 2008

Czech Philip Morris sees no reason for further tax rises on cigarettes

PRAGUE - Czech tobacco group Philip Morris CR sees no reason for further tax hikes on cigarettes in the next several years after the last rise at the start of the year, weekly Euro reported, citing the group’s new CEO.
‘After a rise in the consumer tax in January 2008, the Czech Republic fulfilled and passed the minimum tax, and therefore we do not see a reason for raising the rate for several years,’ Euro quoted Alvise Giustiniani as saying in an interview.
The tobacco group’s Czech market share has eroded in recent years amid fiercer competition and tax hikes on cigarettes, and analysts expect the company to face challenges in 2008 due to strong stockpiling from competitors.

April 22, 2008

Smokers Aren’t Deterred By Tax Increases

In the near future it will become harder for UB smokers to light up and enjoy their cigarettes in NY and on campus. From smoking bans in bars and restaurants to increasing prices, the habit of smoking is becoming more inconvenient and expensive.
Over the past weeks, the recently-passed state budget includes a plan to increase the tax on cigarettes, which could mean an additional $1.50 per pack on top of the current prices.
According to Sherri Darrow, director of Wellness Education Services (WES), UB will soon be adding their owncigarettes obstacles for UB smokers.
"We are currently working to change policies around campus regarding tobacco," Darrow said. "We are trying to stop the sales of tobacco on campus and we are trying to make UB a smoke-free campus."
In the near future, Darrow said that WES is attempting to establish distinguished smoking areas, which are farther away from building entrances. Their reasons for the new programs are to promote a healthier lifestyle on campus. Even with the continual obstacles approaching in NY, many UB student smokers have no intentions of quitting, and feel that these new policies are insulting.
Tim Wagner, a freshman media study major, said that he picked up the habit because he played a character in a musical that smoked. He now averages about four or five cigarettes a day, and on a stressful day, he’ll smoke up to two packs.
Many college smokers said that smoking has helped them deal with the stress of school. Some also claim that the college social atmosphere school has encouraged them to start smoking.
Alexander Karsten, a UB law student, said that he would not have made it through law school if it weren’t for cigarettes. He also said that if there was a smoking ban on campus, he would not have attended UB. "If this university wants to deprive us of our ability to make choices and even wrong choices, in their opinion, what are they saying about the trust they are putting in the future members of society?," Karsten said.
Karsten also said that because UB is a state university, they should not have the right to ban smoking on campus. Sarah Chojnacki, a sophomore psychology major, took up the habit when a coworker offered her a cigarette during a break. She said that the college social life has not helped her kick the habit, and finds that she smokes a lot at parties. "I never thought I would become a smoker," Chojnacki said.
Molly Brennan, a senior media study major, started her smoking habits from college socializing. "I tend to surround myself with fellow smokers and I will smoke more frequently when around them," Brennan said. "I was one of the many who considered themselves ’social smokers.’ I would merely bum cigarettes from other smokers. At the age of 21, I began buying my own packs of cigarettes."
With the NY tax increase on cigarettes, and UB’s potential ban of selling cigarettes, many UB smokers may find themselves turning to more affordable alternatives for cigarette purchases.
Danielle Smith, a sophomore psychology major, purchases her cigarettes from an Indian Reservation to dodge tax increases. "I do buy a lot of my cigarettes by the carton on the Reservation, so I’ll probably just buy two at a time when I make trips out there to avoid these tax increases," Smith said.
Karsten said that if UB wants to encourage the students to become healthier, they should consider alternative programs, such as focusing on healthier foods such as organic foods and purified water. More people will quit smoking when it is no longer the norm, Darrow said. The new programs at UB will continue to promote a healthy lifestyle that excludes smoking.
According to Darrow, if students are looking to quit there are options available like the quitting hotline, making an appointment with a health professional or stopping by the Health and Wellness Center.
Alan Vlakancic, a sophomore environmental design major, does not think that the NY tax increase will deter people from smoking.
"It makes cigarettes into a forbidden fruit, and probably makes rebellious kids want to smoke more," Vlakancic said. "If people are going to smoke, they’re going to smoke. A price increase just makes it more of a hassle."

April 11, 2008

Up in smoke: New York cigarettes hit $9 a pack

A few weeks ago, I wrote a post in which I mentioned New York’s plans to raise taxes on cigarettes. Well, the bill passed, and cigarettes are now $9 a pack in New York City. While this is sure to increase tax revenue in the short run, it’s not hard to see how it will backfire.
The first negative side effect is the fact that it will encourage criminal behavior on the part of ordinarily law-abiding citizens. According to a report by the Independent Budget Office, earlier tax increases led to massive growth in the purchases of illegal cigarettes. In fact, in 2006, 27% of NYC smokers and 34% of upstate smokers purchased "under-taxed" cigarettes. Now that the taxes on a pack of cigarettes have more than doubled, those figures are expected to skyrocket.
One of the easiest ways to get "under-taxed" cigarettes is through Indian reservations. For example, the Poospatuck Indian Reservation, located just 60 miles outside of New York City, is a major source for tax-free smokes, and its website, "The Original Poospatuck Smoke Shop and Trading Post," is primarily a portal for ordering tobacco products (although it also offers moccasins and coffee). The Poospatucks take their tax free smokes pretty seriously, stating that "[We were] a leader in the fight to protect the sovereignty of Unkechaug Nation lands. We are proud of our contribution to the struggle and will continue to resist any attempt to charge, collect or impose any duty on our territory. This is not just about cigarettes or gas, this is the lawful exercise of Sovereignty […] The consumer who purchases from our site not only buys at a great discount, but also makes a statement about protecting the rights and obligations of our people."
Cheap smokes and a political statement? Hell, sign me up!
For the less politically motivated addicts, there are also internet sites cigarettesthat will sell cigarettes at a considerable discount and ship them to New York addresses. Although these sites are of questionable legality, enforcement is very difficult.
Governor Spitzer worked with credit card companies and postal regulators to reduce the impact of online retailers, but it’s not too hard to circumvent the law on this one. Similarly, it’s pretty easy to buy a trunkload of cigarettes while on vacation in Virginia or South Carolina. With the rising taxes, this sort of low-level smuggling will probably skyrocket, given the fact that it is a quick and relatively safe way to make a lot of money. It’s not hard to imagine cash-strapped yuppies trying out bootlegging, particularly when a couple of runs could cover a semester’s college tuition, a set of braces, or half a tank of gas.
Of course, the biggest source of cheap cigarettes will be hijackers, and therein lies another major downside to the tax hike. Historically, Prohibition was the greatest gift that the United States ever gave to organized crime. Prior to that, the mafia was largely composed of low-scale thugs involved in numbers running and prostitution, but the influx of cash from smuggled liquor gave them a big boost of adrenalin and laid the groundwork for their later expansion into unions and narcotics. Even now, it’s not hard to find cigarettes that "fell off the truck." In fact, "fell off the truck" is the major cigarette retailer in my neighborhood, where I’m constantly bugged by guys selling loose packs of Newports.
By the way, can anyone tell me why Newports are the official cigarettes of the inner city?
While they may bring in a little cash flow, New York’s recent tax decisions are going to put a lot of wear and tear on law enforcement in the city. Furthermore, as anti-smoking lobbyists are pushing these sorts of laws across the country, it’s not hard to imagine a whole new era of bootlegging and smuggling.
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