The need Commonwealth of Massachusetts which has seen the creation of the Connector Authority and Commonwealthcare is running at a deficit and they need this added revenue from the sale of cigs to pay for it. One big problem, however, this increase will not only not increase total collections but will most likely result in lower collections.
At first this will not be realized since every outlet that sells cigarettes needs to pay a floor tax ($1 per pack) on all cigarettes in invenotry so there will actually be a spike in collections at first. By November and Decemeber this will flatten out and it will be interesting to see what is the level of collections. Why will revenues reduce?
- Some will quit, not many
- Some will switch to generic cigs
- Some will start rolling their own
- Most will find other places to buy cigarettes that are from other states like New Hampshire, where a carton of cigs will be about $20 less. Whether they drive to NH, a friend is going or maybe their local bar will have an entrepeneur who will see the opportunity this has created and will start selling NH cigs out of his trunk.
Imagine owning a store in the Fitchburg/Leominster area or north of that!!! You may as well nmot even carry cigarettes. Botom line is that Massachusets is not an island and we need to be competitive with surrounding states or we will lose business.
Kudos to Fresolo and Evangelides, the only two local states representatives that voted against it.
6 comments:
Amen, brotha Randell! Maybe the small business owners along he border should have had Mike Myers lobby on their behalf?
http://www.youtube.com/watch?v=aRtNfb6D3Mc
Harry Tembenis
Worcester, MA
Harry:
We are talking business 101. Let me also add that when someone drives to New Hampshire to buy their cigs, do you think they may buy some liquor too and maybe some lottery tickets? There are more lost tax revenues.
Politicians talk and say we need to be "business friendly" and they do something like this. I would love to own a store just over the New Hampshire border. Their business will double.
Thanks
Bill
"an entrepeneur who will see the opportunity this has created and will start selling NH cigs out of his trunk."
Maybe I can fly to NH, stock up on smokes, and sell them at the Worcester Airport. There's certainly nobody around to catch me. I can use the money to buy avgas.
Seriously:
Next time ask someone who smokes and the things and places that they do to buy cigs.
My favorite, however, has to be the cigs with the Chinese writing. I have no idea what they are or where they come from but people show up with trunkfuls of Marlboros with Chinese writing.
What bars you can go to,place your order and then pick it up at a set time.
You make the spreads this large and people will avoid them. Again it will take a little time to wash up but the Nvember collections this year will be the same or less then last November.
Bill
I am neither a smoker nor much of a beeer drinker and I know 2people who would get me all teh cigs and brew I need anytime from NH...with no mark up at all..... and I if told you what these people do for a living, you'd laugh....both in quasi professional white color jobs and neither is anywhere near a Paulie Pajama Person nor a low life, quick buck, bunko artist.
They both hit NH 1x a month.......mostly for the cigs......and they been doing it for years.
What ever happened to that Indian (Nipmuc??) out in Grafton a couple years ago who set up his Winnebago as a raodside cig stand................claimed immunity from fed'l & Mass cig taxes b/c he was a Nipmuc sovereign nation member....
Anytime value added or sales taxes become confiscatory....... .it opens up black markets...this is one reason you'll never see a nat'l sales tax......because once the nat'l sales tax ......estimated to have to be 17% to replace the fed'l income tax ........is added to the Mass 5% sales tax...........there is enough money in it for the black marketeers to step in.
Bill, Mass. should see a substantial drop in tax revenue for August...........as Mass folks travel to ME. & NH for vacation and pick up their favorite vices on the way home.
What's next... a non profit CDC (Cigarette Distribution Center)....set up in Main South which will be exempt from Cig taxes....and will even provide city backed soft second mortgages to help the addicts finance their habit??.......or worse a rise in crime to finance cig purchases.
I could nevah imagine owning a store in Leominster or Fitchburg..owning rental property in Woostah is enuf of a headache:>)
Just witnessed a prostitution bust on Main South..the john was well dressed 55+ cat with a sports car...he was in cuffs beside his sports car..I can only imagine what was going thru his mind
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