Higher Cigarette Taxes Raise Concerns about Smuggling

Last updated on August 6, 2022

Higher cigarette taxes will not promote health on all fronts. In the state of Massachusetts, where cigarette prices have increased $1 per pack, residents can expect an increase in the cigarette smuggling from low-priced states to Massachusetts. With the cigarette tax rate touching $3.51 per pack in Massachusetts, it has become the second-highest cigarette tax rate in the U.S, with the price of one pack reaching $10 per pack at some areas of the state.

Smuggling is widespread because of the demand for cheaper cigarettes. If a neighboring state has a lower tax rate, smugglers buy hundreds of cigarette packs and resell them at a discounted price in a state with high cigarette prices.

Many retailers buy cigarette packs from smugglers at low cost and sell them at the regular cost to increase their profit margin. At the end, instead of increasing revenue, the state gets expands its black market trade.

Higher taxes on cigarettes have not been proven to decrease the number of smokers. Smokers do not quit or reduce smoking because of the prices of cigarette, especially when it is readily available at a lower cost in the black market.