The badger herald · tobacco taxes spur flourishing black market for cigarettes – the badger herald
Although the state has issued cigarette tax hikes aimed at curbing tobacco use, the public policy initiative has also created a black market for cigarettes as some smuggle smokes into Wisconsin from out of state to avoid the tax and maximize profits.
According to a recent study released by the Tax Foundation, 34.6 percent of cigarettes sold in Wisconsin are smuggled in across state lines, ranking Wisconsin fifth nationally for inbound cigarette smuggling consumption.
Between 2006 and 2012, Wisconsin s cigarette tax jumped 227 percent to a rate of $2.52 per pack. Wisconsin s smuggling consumption rate went up 21.5 percent during the same time period, according to the study.
The illegal smuggling of contraband cigarettes into the state is a problem the Department of Revenue is actively fighting, Jennifer Western, DOR assistant deputy secretary, said.
The DOR addressed cigarette smuggling in the past year by intercepting over 70,000 packs of contraband cigarettes which had been shipped into Wisconsin and did not have Wisconsin cigarette tax stamps, she said. “This means no Wisconsin cigarette taxes were paid on those cigarettes.”
Western said contraband cigarettes create an uneven playing field for retailers, distributors and manufacturers who comply with state and federal law.
Melissa Horn, tobacco policy and government relations director at Health First Wisconsin, said the policy actions the state has taken on smuggling and cigarette taxation have proven to be effective but more resources are needed to continue combating the issue.
Our organization supports the DOR s investigations of any fraudulent tax stamps or sale issues across state borders, Horn said.
She said Health First Wisconsin believes the $2.52 cigarette pack tax increase has been successful and the tax has played a large role in curbing of costs associated with treatment of smoking related illnesses and dropping Wisconsin s youth smoking rates to new lows.
Although the state’s tax rate is one of the highest in the Midwest second only to Minnesota s tax of $2.83 per pack Wisconsin has the highest smuggling rate of the region, Western said.
Health First Wisconsin suggested an increase in government investment to combat smuggling of tobacco products as well as overall tobacco use, Horn said.
Wisconsin needs to invest more to reduce tobacco use in our state because we are falling well short of what we should put towards reducing tobacco use, Horn said.
Horn said the Centers for Disease Control and Prevention recommended that Wisconsin spend up to 10 times what it currently does on tobacco prevention and control. Although Wisconsin generates more than $600 million in annual tobacco tax revenue, the state only spends $5.6 million on tobacco use prevention, she said.
The Department of Revenue is currently conducting a broad study on the cigarette tax collection system and cigarette smuggling, Western said, adding that since the report was not complete, it would be premature to comment directly on the Tax Foundation study.
Although the smuggling problem in Wisconsin has grown in the six year period according to the Tax Foundation study, Horn said Health First Wisconsin still strongly supports the large increases in cigarette pack taxed, saying they effectively reduce tobacco use in Wisconsin.
Editorial: the buzz about e-cigarettes – chicago tribune
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There’s debate, but scant evidence, that e cigarettes pose a health risk. The main benefit of e cigarettes is to give smokers an alternative, a way to kick the tobacco habit. Users can vary the levels of nicotine and gradually wean themselves off their addiction.
A 2009 Food and Drug Administration study tested two popular brands of e cigarettes and did find carcinogens and other toxic chemicals in more than half of the samples. One sample had traces of diethylene glycol, an ingredient in antifreeze.
Another study conducted by the Drexel University School of Public Health and funded by the Consumer Advocates for Smoke Free Alternatives Association, a group that advocates for e cigarettes and smokeless tobacco found e cigarettes pose no health threat for users or bystanders under generally accepted exposure limits. No study has provided a definitive answer, but all point to e cigs as safer than regular cigs.
The FDA is still trying to figure out how to classify e cigarettes. In September, attorneys general from about 40 states signed on to a letter urging the FDA to regulate e cigarettes as a tobacco product. That would allow the agency to restrict advertising, ingredients and sales to minors. The FDA has drafted a proposed rule and sent it to the Office of Management and Budget’s Office of Information and Regulatory Affairs for review, but has not publicly released it.
Health effects aside, a major concern about e cigarettes is their appeal to young people. Smoking an e cigarette looks no different than smoking a regular cigarette. That “cool” factor is still there. According to the Centers for Disease Control and Prevention, the number of middle school and high school students who use e cigarettes doubled between 2011 and 2012. An Illinois law banning the sale of e cigarettes to minors took effect on Jan. 1.
Chicago’s proposed ordinance, introduced by Ald. Will Burns, 4th, and Ald. Edward Burke, 14th, is promoted as an initiative to protect children, but it would have a much wider impact. E cigarettes would be banned from all smoke free environments, and stores would be required to sell them behind the counter. That ordinance has been stalled, but an ordinance that would prohibit the sale of menthol flavored tobacco products within 500 feet of Chicago schools has been approved by two council committees.
The new state law and the city ordinance that won favor in committee focus on restricting this nicotine delivery device to kids. And that, for now, seems like the right approach. Illinois and other states had good cause to ban tobacco smoking in public places second hand smoke poses a known health risk. E cigs may be a nuisance to people who see others using them, but we’re not talking about second hand smoke.
The absence of a broad government ban doesn’t mean that people puffing e cigs will start to show up everywhere. Many businesses and agencies have set their own bans. You can’t smoke e cigarettes at the United Center, on CTA buses or trains or in Starbucks stores. Nearly all major U.S. airlines prohibit e cigarettes on their planes. It’s our sense that most e cig users think twice about where they puff away because of public repulsion toward smoking.