Tuesday, January 17, 2012

Markets in Everything: Roll-Your-Own Cigarettes

"A South Carolina store owner said smokers can get cigarettes without paying state and federal taxes because of a tax loophole. M.J. Farah, owner of Jake's One Stop in Pelzer, South Carolina is offering customers the chance to roll their own cigarettes.

"The customers are taking advantage of a tax cut. They don't have to pay the taxes on the tobacco if they are making it on their own," said Farah. "I have people who drive all the way up here 45 minutes just to come get their tobacco."

Farah recently got three new machines that stuff the cigarettes for customers. He was already selling roll-your-own supplies, but the new machines are less time-consuming and still save smokers money."

8 Comments:

At 1/17/2012 11:52 AM, Blogger PeakTrader said...

Tobacco has become less socially acceptable with declining advertising compared to alcohol.

Consequently, tobacco use is in decline, while alcohol use remains high.

So, do we want to legalize marijuana?

Deciphering Mixed Messages On Drinking And Health
January 16, 2012

Dr. Brewer is a graduate of the University of Illinois at Chicago College of Medicine and School of Public Health, and is Board Certified in Preventive Medicine.

"Overall, we estimate that about one in six adults 18 and older, about 38 million adults in total, report binge drinking one or more times within the past 30 days.

If you look at this by income, one thing that surprises a lot of people is that the prevalence of binge drinking is actually higher among people with higher household incomes, whereas the amount consumed per binge episode, was actually higher among those with lower household incomes.

I think we have to look at social norms around drinking...a lot of people get the message that drinking to the point of intoxication is not only something that is socially acceptable but actually is encouraged.

I mean, we've just finished the holiday season here, and I think a lot of people tend to associate binge drinking with having a good time over the holidays, and New Year's Eve in particular.

I think it's also reflected that those social norms are also reflected in the policies that we have around alcohol.

Alcohol tends to be relatively inexpensive, it tends to be readily available in many communities and quite heavily advertised.

And we're particularly concerned in terms of advertising...that young people who are exposed to more advertising tend to drink more, as well.

So I think many of the factors that influence people's drinking behavior actually relate to the environment in which they're making their drinking decisions.

And in that way, the situation with alcohol is really very similar to what we know to be true for tobacco and what we also recognize to be true in terms of people's eating behavior, as well."

 
At 1/17/2012 2:34 PM, Blogger Buddy R Pacifico said...

Jake's is off the hook, but their customers may not be if they roll their own at Jake's.

Why? Because according to the South Carolina Cigarette and Tax Manual:

"Cigarettes found at any point within South Carolina on which the tax has not been paid are subject to confiscation by the Department, its employees and any peace officer of the State and are contraband cigarettes."

Further;

"20. Are contraband cigarettes subject to seizure?

Yes.

21. Are vehicles used to transport contraband cigarettes subject to seizure?

Yes."

 
At 1/17/2012 3:34 PM, Blogger Benjamin said...

Probably, taxes on drugs should be national, and strictly enforced. But drugs should be legal, including cigarettes, alcohol and pot, whatever.

 
At 1/17/2012 3:39 PM, Blogger VangelV said...

Tobacco has become less socially acceptable with declining advertising compared to alcohol.

Both are legal products and both are used by the population. The fact that people have cut back on the use of a legal product voluntarily should be instructive to the busybodies who want the government to meddle in all social activities.

So, do we want to legalize marijuana?

Of course. Prices for users would fall but government revenues would explode as government spending declines. Violent and property crime would fall as the dealers, gangs, and drug cartels are pushed out of business. Overall use would decline slightly as it has in European countries that have legalized drug use.

For a parallel look to the effects of the repeal of Prohibition.

 
At 1/18/2012 3:27 AM, Blogger PeakTrader said...

VangelV says: "Violent and property crime would fall as the dealers, gangs, and drug cartels are pushed out of business."

While the DEA says: "The greatest weakness in the logic of legalizers is that the violence associated with drugs is simply a product of drug trafficking. That is, if drugs were legal, then most drug crime would end. But most violent crime is committed not because people want to buy drugs, but because people are on drugs."

I doubt legalizing drugs will turn criminals into angels.

Why legalize it to get more of it and then tax it to get less of it?

So, government can spend the new revenues on the greater need for rehabilitation?

 
At 1/18/2012 10:10 AM, Blogger VangelV said...

While the DEA says: "The greatest weakness in the logic of legalizers is that the violence associated with drugs is simply a product of drug trafficking. That is, if drugs were legal, then most drug crime would end. But most violent crime is committed not because people want to buy drugs, but because people are on drugs."

What is lost is the fact that people have to buy very expensive drugs because the government is driving up prices. If you could buy your daily heroin for an hour's worth of labour you would not have to be robbing convenience stores and little old ladies.

The DEA is the problem, not the solution.

I doubt legalizing drugs will turn criminals into angels.

Not at all. But it will not make criminals out of nonviolent people who were charged with victimless crimes. And it will make drug use more affordable so that there is no need to engage in theft and violence to get the funds necessary to get the drugs.

Why legalize it to get more of it and then tax it to get less of it?

Because it works. Look at how the property tax riots in the US ended once the local coffers were filled with tax revenues on liquor purchases. Yes, those sales taxes add to the price to the liquor but the consumer still wound up paying substantially less as the fat margins that were made possible by government prohibition were wiped out by market competition.

And let us not forget that the new jobs also meant lower government expenditures on welfare and higher revenues.

So, government can spend the new revenues on the greater need for rehabilitation?

Not at all. Rehabilitation should not be a burden on the taxpayer. In a free society, which you oppose, people are responsible for their own actions. Rehabilitation will be paid for by families, charities, churches, and other groups with funds gathered voluntarily.

 
At 1/18/2012 3:19 PM, Blogger PeakTrader said...

VangelV says "(legalization) will make drug use more affordable so that there is no need to engage in theft and violence to get the funds necessary to get the drugs."

So, you're saying people who commit crimes high on drugs will stop committing those crimes if they can afford their drugs?

 
At 1/18/2012 3:25 PM, Blogger VangelV said...

So, you're saying people who commit crimes high on drugs will stop committing those crimes if they can afford their drugs?

People act to achieve ends. In the case of addicts their ultimate goal is to feed their habits. The means to achieve their ends is crime because they cannot earn enough to buy the drugs that they need each day. As prices collapse thanks to the greater efficiencies and lower margins there will be no need to take the risks and resort to crime. For a parallel just look at alcoholics.

 

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