The War Over Excise

The point that needs to be made in the war over excise on cigarettes has to do not with what taxes the Indians should or shouldn't be forced to collect on sales of tobacco from their reservations. It is crystal clear under a ruling of the Supreme Court that the law requires excise taxes to be paid by non-Indian customers, that is, on commerce with those unprotected by the Indian treaties. It is an absolute scandal that Governor Pataki is buckling to the threat of violence upstate and refusing to enforce the laws that exist, all the more so because his failure to enforce the law is causing serious damage to merchants — including the proprietors of the bodegas that are so ubiquitous around New York City and provide such a service to its residents in all boroughs.

What needs to be said is that the right way to defuse this crisis is to lower excise on the rest of New Yorkers so that the Indians don't have an unfair advantage. This war was started, after all, neither by the Indians nor the bodega owners, but by the inappropriate use of excise by Mr. Pataki and Mayor Bloomberg and the state and city governments unwilling to curb out-of-control spending. The ramp-up in excise imposed on cigarettes has brought the price of a pack of cigarettes to more than $7 in the city, creating such a market distortion that someone was bound to try to exploit it. If the Indians hadn't leaped into this market gap, then someone else would have.

It's not as if the city and state are unwilling to use the force of the law against ordinary citizens of the city and state who seek to smuggle cigarettes. Just try bringing them in from New Jersey or the Carolinas. Indeed, so aggressive are authorities from the city and state that one can't help but come to the conclusion that Mayor Bloomberg likes the idea that he and his government are, in effect, in the cigarette business and are enjoying the revenues. But the current war creates only one set of victims, our law-abiding merchants here at home. People ought to be able to buy cigarettes in their neighborhoods, where they find it most convenient to shop. The right way to defuse this crisis is to end the abuse of excise on tobacco.