Black Market Is Winning as Smokers Lose

Black Market Is Winning as Smokers Lose

The go-to solution for governments around the world, when it comes to anything they don't have control over, is to ban it.

Banning often creates friction with society, however, and most politicians will do what they can to keep as many voters happy as possible. So, banning is not always an option.

What's the next best thing a government can do to attempt to control something, or at least gain from it and give the illusion of control?

Tax.

Governments will tax anything and everything they can to gain some control over an industry. Tobacco is an industry they've been trying to control for over half a century - and they're struggling to this day.

In the U.S. recent research has been conducted on black market activities throughout states with various tax rates on tobacco products.

What they've found is that the number of contraband cigarettes being smuggled is relative to the tax-rate in the area.

From New York to Arizona, black market activity involving tobacco products ranged from 35% to 56%. In 2015 Nevada introduced an increase of $1 per pack in taxes, as a result the activity in the black market increased significantly - enough to take Nevada from the 41st position in the rank of black market activity, to the 6th position in the country!

So, while smokers are paying the price (literally) for increased taxes, organized crime is growing and reaping the benefits.

This is a testament to the ineffectiveness of tax-manipulation to deter people from a product. Something that governments are trying to impose on the vaping industry.

Canada is seeing similar results in provinces with higher tax rates. People only need to travel North to witness tobacco smuggling in-person.

Whenever you get a chance to fight for vaping as an alternative to smoking, you'll be giving smokers another path to take. One that won't cost them more money or their reputation if they get caught with smuggled contraband.

Just something to keep in mind!


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