"Taxed out" New York City smokers roll their own

Fri Nov 4, 2011 10:44am EDT
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By Chris Francescani

NEW YORK (Reuters) - At Island Smokes in New York City's Lower East Side neighborhood, customers sick of the highest tax on cigarettes in America are fighting back by rolling their own cigarettes out of pipe tobacco.

It's a way around New York City's sky high cigarette taxes, which have led to an 35 percent drop in smoking rates since 2002, according to Mayor Michael Bloomberg, from to 14 percent from 22 percent in 2002 when city anti-smoking initiatives.

Among New York City public school students the drop is sharper, down 52 percent since 2001, the New York City Department of Health says.

But while city residents may be healthier, the high taxes have fueled a black market in contraband cigarettes.

All over New York City, runners hawk untaxed, $5-a-pack smokes on city street corners. Newsstand owners pocket city and state taxes with each cheap pack. And Indian reservations flood the market with contraband cigarettes.

State law requires reservations sell cigarettes only to tribe members, but last year the smoke shops on the tiny Poospatuck Indian reservation on Long Island sold more than four million cartons. That would require every man, woman and child on the reservation to smoke 523 packs a day, the city charged in court papers last fall, complaining those cigarettes were being sold in New York City.

At Island Smokes, customers pay $3 a pack if they make a carton of cigarettes. By comparison, one pack of 20 cigarettes averages $11-$13 a pack in the city and can be as high as $15.

As he made his smokes, Lucky Strike smoker Christopher Geist recalled what led him here.   Continued...