Business Opportunities are Everywhere

Smokers of Minnesota are up in arms over the increase in cigarette taxes:

MINNEAPOLIS (WCCO) – Outside downtown office buildings, many smokers didn’t want to talk about the possibility of a tax that will push a lot of cigarette packs into the $8 range.

Dan Jones says the tax may be the push he needs


The state says it has built the expected drop in smokers into their revenue projections. The current tobacco tax pulls in $423 million, and the state is predicting the higher tax would pull in $618 million a year.

The tax hike isn’t surprising since Mark Dayton stated plundering from smokers was one idea to subsidize billionaire Zigy Wilf’s stadium. What is surprising is the reaction many are having to the news. Many smokers are pissed, other smokers are thinking about quitting, and small government advocates are rightly pointing out that smoking is an activity enjoyed by many poor individuals so a tax on cigarettes is a burden on the poor (to enrich the top 1% no less!). I guess, to borrow an old marketing phrase from Apple, I think different. A tax increase on cigarettes in Minnesota is a business opportunity! Anybody willing to buy cheaper cigarettes out of state, deliver them to Minnesota, and sell them to people addicted to nicotine stands to make a tidy profit.

Tax increases, while depriving some portion of the population of wealth, generate business opportunities for smugglers. Increasing the tax on cigarettes makes the unprofitable enterprise of buying cigarettes in one state and selling them in another profitable. In fact, depending on the tax difference between the state cigarettes are purchased in and the state they are sold in, the profit could be very high.

One of my goals in life is to show people how statism can be exploited for personal profit without resorting to the statist tactic of initiating violence. Smuggling cigarettes into Minnesota is looking to be one of those wonderfully exploitable endeavors.