Recently, I wrote about how the World Health Organization (WHO) was giving New York City Mayor and Anti-Big Gulp Crusader Michael Bloomberg an assist in his "all your decisions are belong to us" initiatives.
Well… as the WHO continues to press countries to raise their tobacco taxes (first China, now the Philippines) and continues to advocate for a "Solidarity Tobacco Contribution" to fund WHO activities (better known as a global tobacco tax), there's some bad news out of Mexico for the WHO (and those of us in the U.S. concerned about Mexican criminal elements operating near our Southern border).
It turns out a major effect of Mexico having hiked its cigarette tax quite substantially back in 2011 has been a spike in illegal cigarette sales and the "proliferation of contraband."
So says an industrial group, Concamin, that has studied the issue. According to them, 17% of cigarettes sold in Mexico are black-market. Illicit sales of smokes have, in fact, reached a record high in Mexico post-tax hike, according to the study.
Best of all, you know where the illicit cigarettes are super-popular? In two regions, one of which just happens to be the Northwest of Mexico (also known as the area closest to the American Southwest). Which totally hasn't been dealing with the negative effects of illegal activity by criminal gangs that smuggle people and things and engage in astonishingly graphic violence for some time now.
I don't know about you, but I'm pretty excited that a change in tax policy appears to have given criminal gangs operating in the border region another source of funding with which to carry on stuff like human trafficking and drug smuggling. I'm sure we're only days away from having Eric Holder's Justice Department selling the cigarettes directly to the smugglers.
I'm even more excited that a subsidiary of the UN-- a completely unaccountable organization at the best of times-- is pushing for higher taxes that could give criminal gangs the world over an extra funding line.
But even better than all that, let's not forget that setting aside these global tax efforts, several U.S. states may in 2013 once again consider tobacco tax hikes that would increase the amount smugglers have to gain from trafficking in cigarettes even more. I'm looking at you, Maryland, where smuggled cigarettes brought in from Virginia are already a problem. And you, California, where plenty of smokers already buy across the border and thanks to Mexican policy already on the books and California's willingness to endlessly pursue tax increases as the policy "solution" to everything, smugglers already well-versed in hardened criminality could get the opportunity to branch out. Diversity is key in today's economy.
At some point, folks are going to start looking at examples like Mexico, New York and New Jersey and realize that for a variety of reasons, cigarette tax hikes just don't make sense. They rarely bring in the revenue anticipated, they don't significantly stop smoking, and they stimulate criminality-- perfect for the UN, that hotbed of sound policy-making, to pursue, but just as well for the rest of us to say "no thanks" to.