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Over taxing, banning products grows criminal market in Arizona

Politicians in Washington are trying to find ways to fund their expensive new proposals, and some of them could have disastrous effects on Arizona communities. In the past few weeks, Congress has proposed increasing taxes on tobacco users to pay for their massive budget reconciliation package. While some may see this as well-intentioned, this will only serve to expand the already dangerous illicit tobacco market. 

Simply put, policies that increase the cost of products through taxation, or remove products from stores altogether, will not cause people to quit smoking. Research shows that increasing taxes on popular products or prohibiting them moves them from the legitimate market to the criminal market, one where criminals enjoy windfall profits. As a border state, Arizona has already seen an increase in smuggling and illicit operations caused by other failed policies. We do not need to make it worse by making popular legal products illegal.  

Walt Blackman

Pushing products underground causes the illicit market to grow and leads to an increase in arrests in these communities, many of which already have an uneasy relationship with law enforcement. Indeed, the communities that have the largest illicit markets are the communities of color and low incomes. At a time when I believe our country needs healing, we do not need to increase the number of interactions between these communities, especially communities of color and police. That is why, as a legislator, I have led the fight for criminal justice reform, to stop the cycle of distrust between my community and our law enforcement officers. And as a veteran who served on the front lines for the country and in the state house, I implore our other elected officials to consider the ramifications of their actions on our most vulnerable neighborhoods.   

According to an analysis by the Tax Foundation, more than a third of all cigarettes purchased in Arizona are done so illegally. That will only get worse as we increase regulations. For comparison in New York City, where the tobacco tax is one of the highest in the country, over half of all sales are illegal. Those smugglers purchase massive amounts of cigarettes and ship them north for distribution through gangs and other criminal networks.  

If the federal government continues implementing policies that grow the illicit market it will entice international criminal organizations to smuggle greater sums for greater profits. We know this, because it’s already happening in Europe. Earlier this year Greek officials seized a container with almost 10 million illegal cigarettes coming from China. In all of 2020, the European Anti-Fraud Office seized 370 million illegal cigarettes coming from countries outside the European Union. These massive seizures prove the scale of cigarette smuggling across the globe, and show what U.S. law enforcement would have to deal with if our government further restricts legal tobacco products here. 

If the Biden Administration and members of Congress want to ban menthol cigarettes, or increase tobacco taxes to fund the federal budget, they need to consider the consequences of their actions. Senators Kyrsten Sinema and Mark Kelly will soon have an opportunity to show real leadership, and should oppose these harmful policies. Not only will supporting these policies invite a new wave of smuggling and bootlegging that would rival Prohibition era moon shining, they’d be exacerbating already inflamed race relations. We need to call our representatives today and tell them that public health policy should begin with public safety.  

I urge our Senators to oppose these policies.  

Walt Blackman is a Republican Arizona State Legislator, Chair of the Criminal Justice Committee and a veteran of the US Army.  

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