How to Make $2 Million in One Interstate Drive

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If you think you're in the wrong line of work, and barely making ends meet, maybe what you should be doing is running cigarettes north along the I-95 corridor, from Virginia to New York.

No, seriously – because some enterprising individuals have a lucrative sideline doing just that.

The Bureau of Alcohol, Tobacco, and Firearms has even put an exact number on just how lucrative.

The ATF says smugglers could make $1,944,000 running just one truckload of cigarettes from a low-tax jurisdiction like Virginia to a high-tax jurisdiction like New York.

In Virginia, tax on a pack of smokes is just 30 cents, compared with a whopping $4.35 per pack in New York. New York City's local tax is even higher, with $11 packs of Parliaments not at all uncommon.

Fully 24% of all cigarettes sold in Virginia are taken out of the Old Dominion to places with a less-favorable tax scheme.

In New York, more than 60% of the cigarettes sold come from somewhere else, smuggled in.

The Tax Foundation has found a crystal clear correlation between cigarette smuggling and excise tax.

We've seen this happen before. Whenever the government, and New York a famous nanny state, tries to regulate people's behavior or tries to legislate morality, there's always someone there to pick up the slack.

Prohibition and the War on Drugs come to mind, as quite a few of American history's greatest boondoggles stem from trying to assert the nanny state.

New Yorkers very nearly escaped having to find smuggled Super Big Gulps, don't you know. That was before Mayor Michael Bloomberg's ill-advised (but surely well-intentioned) attempt to ban soft drinks over a certain size was nixed by the courts.

Can we expect criminals to start trying to stuff the back of a truck with Super Big Gulps, or candy bars, or trans-fats?

That's not a pretty picture.

Why wouldn't someone buy a truckload of Camels in Richmond and run them up to Brooklyn? Especially when they book close to a cool $2 million on one run.

Let us know what you think of the #nannystate giving rise to criminality, or "creative solutions". Drop us a line on Twitter @moneymorning, or on our Facebook Wall.

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  1. Rewtired130 | May 10, 2013

    FYI, in an effort to combat this, the state of VA last year passed a law making it illegal to sell anyone more than 25 cartons of cigarettes. Also, if one gets pulled over in VA and it is found that your vehicle contains more than 25 cartons of cigarettes, you will be charged with money laundering.
    My wife & I both smoke and as snow-birds, we used to stop in VA and buy about 50 cartons for our own consumption during the 6 months we spent in the South & again for the 6 months we spent in the North. We can only get 25 cartons now & we do not make multiple stops as we do not want to be caught with more than 25 cartons in our vehicle if we should ever get stopped for a traffic violation or get into an accident while in VA.

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