Wednesday, November 18, 2009
Shutting Down Native Mail Order Tobacco Sales Is Misguided
I've read the reports, I've read the testimonies and I've read the studies. It seems to me that the obvious is being missed in the effort to legislate Native businesses out of existence. Neither the US Postal Service nor the Bureau of Alcohol, Tobacco and Firearms have the resources or the appetite to make the avoidance of tobacco tax a priority and neither agency considers Native sellers of tobacco to be the criminal element in the contraband tobacco industry. According to the ATF only 1% of their current case load and 2% of their overall budget involves alcohol and tobacco. They are more concerned with violent crimes associated with guns and explosives. The USPS also has higher priorities such as narcotics, child pornography, explosives, exploitation of the elderly and the delivery of malicious substances, including anthrax. The hype over organized crime and revenue loss is made by politicians not by those charged with the responsibility of law enforcement. A study done by the American Wholesale Marketers Association found that the majority of Internet tobacco sales were being done by foreign enterprises. These operations pay no US taxes what so ever and contribute nothing to the US economy. They operate outside the reach of US law enforcement and have no standards for operation. The Prevent All Cigarette Trafficking Act will drive the remote sales to these foreign enterprises. The act provides more prosecutorial tools to shut down operations within the reach of US law enforcement but does little to change things for those operating off shore. The ATF reports do little to associate Native retailers with any organized criminal element, particularly where Native sales are clearly end user sales. Patrick Fleenor with the D.C. based Tax Foundation argues that Native retailers do more to cut out the legs of organized crime and the black market trade than law enforcement. Where black market and foreign sellers operate in the shadows, Native retailers are open and transparent. While respecting the privacy of their customers, their sources and supply are well documented and they operate as legitimate responsible enterprises. Native retailers recognize that there is a criminal element in the tobacco industry at all levels. Over taxing and tax disparity creates the environment for it. Native retailers compete against that element whether it is the criminals at Philip Morris or gangs and street thugs pushing smuggled or counterfeit products. Take our people out of the mix and see what you are left with. Philip Morris pretends to take the high road promoting and writing legislation here in the US for bought and paid for politicians while being called out and fined for smuggling in Europe and laundering drug money in Columbia. When a consumer can't come to a Native retailer anymore, where does he turn? Philip Morris isn't concerned whether their product sell for $10 a pack with $6 or $8 worth of tax applied or for $5 on a street corner as long as they get the sales back that they have been losing to Native sales of Native products. At some point the puppets that sit in Albany and Washington need to recognized the mess they are creating. Not one of them has considered what happens if our legitimate businesses are pulled out of the broad market. Anyone who believes you can pull your hand out of a bucket of dirty water and hope that only clean water will fill in where your hand was, is a fool.