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Report: Smokers Turning To Smuggled Cigarettes Because Of High Taxes


The tax rate on cigarettes is so high here in Texas it's sparking a huge draw for "illegal cigarettes." 

Maybe you'd walk a mile for a camel, but would you be willing to pay more than $7 for a whole pack.

"I remember when my mom paid 59 cents. I remember those days, but I never thought I'd pay $3 a gallon for gas either," says smoker Ora Patterson.

It's one of the reasons Pamela Pope rolls her own. "Yeah, I figure I can buy a bag of tobacco for $2.  Lasts me all month versus $140 on filtered cigarettes," she says. "I know a lot of people who try to steal their cigarettes."

Crossing state lines in search of cheaper smokes is catching on in Texas, but with far more negative results. A new bi-partisan study out of Washington D.C. revealed more than a third of the cigarettes sold in Texas are smuggled here illegally from states with lower tax rates and then turned around for a profit. 

The tax rate on cigarettes here has increased by 244 percent since 2006, and Texas has the eighth highest rate of cigarette smuggling in the country.

"It's clear the level of prosecution on tobacco is going down precisely at a time when taxes are going up here in Texas, resulting in prime real estate for organized crime," says Nathan Jones, an expert on drug smuggling with the Baker Institutes.

It is a prime example, he says, of public policy having unintended consequences.