The urge to smurf

When government gets greedy, some people turn to crime

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Readers' comments



The other way to look at it is that this is a pure and simple form of market arbitrage. If I engaged in this form of action with states that charged different prices for price of the same goods, or stocks of companies across different exchanges, I would be considered a hero by this magazine, for arbitrage is an economic force that causes equalization of price. In the stock market this is carried out daily. Surely thats not bad?

Why is it illegal to do so for cigarettes? Surely the insanity is that the same pack of Malbrow costs 4.50 cents more in New York than in Virginia.

I would say make the Laws so that there is not such disparities... Have the Federal government tax the cigarettes across all USA with he same rate, and have then use a transfer payment mechanism to give equalization payments to the states. States that implemented advanced education and anti smoking policies and that invested in treatment programs for the addicted got more per capita than states that did nothing. Would that not be fairer??

Long time ago I met a guy who would fly into Rio, buy two suitcases full of Ladies Bikini's and then sell then in Miami. What a great arbiter I said. He is dealing in a commodity that puts a smile on many a faces, and giving beautiful bikini's at a fraction of cost to beautiful women. As a side benefit, he made a handsome income in buying 100 dollar bikini's and selling them for 250 to 300. Was he a criminal?


The article cites that 40% of cigarettes sold in NJ are smuggled in from other states. That seems like a lot. Anyone able to verify that number?

Anakha82 in reply to 12sandwiches

It would have to be that high to account for the supposed $10 billion in lost tax revenue. If $4 is the maximum tax differential, that's a bare-minimum of 2.5 billion smuggled packs per year.


As Dave Chappelle; “Ten dollars for a pack of cigarettes, that’s crack prices”. Is anyone surprised that when you engage in effective prohibition, you get prohibition style crimes.


According to an article in Scientific American entitled, Saving New Brain Cells by Tracy Shors, smoking cigarettes kills brain cells. By the hypocritical comments here from people who support the socialization of cigarettes who normally cry "socialism" at the drop of the hat, I would say we know why they are making such obviously brain dead comments.


As we can see from the comments, America is full of deluded socialists. If the price of cigarettes does not reflect its true cost on society, it is socialism. Apparently, conservatives are so ignorant now they think there is a "free lunch" when there never was and never will be.

Sir Lord Gentleman

Do Scotland, Wales, Northern Ireland, and England have different tax rates on cigarettes? Could "smurfing" become a problem in the UK?

Hitchslap in reply to Sir Lord Gentleman

No, but if you take the EU as a whole the differing tax rates make a massive difference. For example rolling tobacco is all but extinct as a retail market in the UK as it is in the main purchased on the continent.

As with any ostensibly illegal activities that carry differing penalties (e.g. possession of Cocaine and Crack Cocaine)a market will emerge based on the risk that the participants are willing to take.

Dunrobin Macdhai

You completely misidentify who the "gangsters" really are. The real gangsters are the politicians who are attempting to forcibly prevent consumers from obtaining cigarettes at a reasonable, free-market price.


How is it tied to a growing government appetite for cash?
At best that is a loose string.
An opportunity is seen for an easy profit and taken advantage of.
State Governments could be ' more greedy' BUT uniform in the rate of tobacco taxation and this opportunity for profit would disappear.
A little tired of these lame stabs at some sort of ' market-theory' correction for government interference. Not every article in the economist needs to prove some textbook economics-religion point.


Clear situation here even a unified cross state sin tax would not only stem the few but help eliminate the "smurf" cigarette market.


It would be possible to eliminate the state to state tax variation by setting a high federal tax, and then waiving the portion collected by the individual states. So if state A has a $1 tax and state B has a $2 tax, the federal tax would be set at $2. In A $1 would be imposed by the state and $1 by the feds. In B $2 would be imposed by the state and zero by the feds. Tax rates would rapidly become uniform.

Ohio in reply to FlownOver

Fortunately, the federal government is not allowed to usurp the states' right to set their own taxes by selectively taxing differently in different states. States are limited in their ability to establish onerous taxes by the ability of citizens to arbitrage by going across the state line, by shopping and by moving permanently. The power of the state over the citizen is thereby further limited by the federal system. And that is a very good thing.

Medicine4theDead in reply to Ohio

So, your arguing that cigarette makers and the states that benefit from them get to dump that cost in parasitic fashion onto other states? You are the socialist you hate. Your hypocrisy is a sad statement about you lack of cognitive ability.

Medicine4theDead in reply to Ohio

No, but they could take Federal Dollars from Virginia and redirect them towards the states Virginia is harming to ensure that Virginia isn't practicing socialism because it doesn't work unless you are the parasite you claim to hate.

Asher Higgs in reply to Medicine4theDead

Whereas you are arguing, in effect, that the government and people of New York, etc. through their legislative decisions should be able to influence legislation in Virginia, despite having no accountability to Virginians. In other words, dumping the consequences of their economically disastrous policies onto Virginia.

In every case where some area has places greater economic burdens on some activity than another area, and the two have any sort of interaction, the former could argue that the latter's policy is parasitical. For example, people from a state with high sales taxes regularly crossing the border to take advantage of lower sales taxes in the neighbouring state. Say Massachusetts and New Hampshire. How much does this "cost" the former, I wonder? Does Massachusetts have the right to expect New Hampshire to bear the burden of this "cost"? If not, why is the NY (etc.) vs VA situation different?

The same case can be made of any situation where one area places more restrictions on an activity than another area. If Puritanville outlaws possession of pornography, should neighbouring Pornotopia be expected to bear the burdens of enforcing or financing the former's moral crusade?

The point is, this is a textbook-perfect example of why trying to use the cudgel of government to improve the human condition inevitably leads to a loss of individual liberty.


In Quebec, the Aboriginal reservations are the source of trafficking. They get their stuff in the USA. The high taxes makes their business profitable, that and the fact that the police are too afraid to crack down on the reserves. I'm sure the USA also has these kinds of "chief" operations.


Smurf? Are cigarette smugglers blue?

Jurjen S. in reply to edwardong

For reasons unclear to me, "smurfing" is the term for acquiring pseudoephedrine tablets for the purpose of methamphetamine production. It involves taking a car full of people and driving from pharmacy to pharmacy, with one individual buying the maximum legal amount at each location. Ideally, one would do this in the border area of three different states (each with its own pseudoephedrine tracking database) so that each individual in the car can buy three times the legal limit.

I would assume that "smurfing" has thus become a term for more generally legally acquiring controlled substances for the purpose of diverting them to illegal purposes.


This is the kind of wholesale stupidity that's created by the rules. Law enforcement will be chasing criminals for selling stuff that's legal to buy, own and consume, instead of chasing real crooks. It won't be long before the streamlined cigarette carton systems diversify into drugs, weapons, bombs etc. That's what has been the case historically.

Hitchslap in reply to yBhJMLgQ9X

It was ever thus. The PLO used to encourage people to buy two stamps when sending a letter (maybe they still do). The point is it's not the activity but the end result of that activity.

As far as i'm concerned, what consenting adults do is their own affair, when that activity affects others without their permission then that's where I draw the line.

yBhJMLgQ9X in reply to Hitchslap

Banning smoking (end user)or creating conditions to preclude adversity to others is another subject. My comment refers to the trade and fillip to criminal activities. The rule makers have enough evidence to realize that this will happen.

yBhJMLgQ9X in reply to Hitchslap

thanks, Hitchslap. I'm for legalizing drugs too. (hv yet to see the youtube video). Meanwhile, its silly how often different tax rates create criminals who're trading in legal stuff. In my country, people smuggle stuff across state borders for this reason and the cops have their hands full with this nonsense (there's an bribery opportunity for the corrupt ones).

Hitchslap in reply to yBhJMLgQ9X

The problem is that your country was colonised by people from my country with some rather puritan, authoritarian ideas.

Those puritan ideals have survived to the present day. It is striking how far apart the ostensibly conservative, god fearing mid western and southern states are states are from those Hedonistic Southern ones!


Virginia is missing out on some useful arbitrage here. They should share the proceedings with the smugglers. They should raise their duty rates to higher than present but enough lower than places like New York or New Jersey to make the smuggling worthwhile.



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