New York City -- a powerful and dominant metropolis. But not when it comes to cigarettes. NYC and the rest of the state tax cigarettes very highly in an effort to drive down consumption, to save lives, and to have a revenue source. In theory high levies do suppress use, including in terms of kids so they just never get started down the road of a highly toxic and addictive habit. Generally -- again in theory -- taxes are a useful device for health regulators to drive down use including in terms of tobacco, alcohol, junk food, and gambling.
The problem with the city's efforts is the surrounding states. They don't tax tobacco at nearly as high a rate. The result? Bad types bring cigarettes into New York from elsewhere. They sell them to vendors (at a profit), mostly in poor neighborhoods who then resell them to consumers (at a profit) at prices that are still appreciably lower than cigarettes subject to the levies in New York. A thriving black market that City officials are struggling to control.
New York should have talked to Canada. We had a similar experience about two decades ago. Canada jacked up taxes on tobacco to further drive down consumption. But because levies in the states near the Canada-US border were not nearly so high the result was a brisk smuggling business.
Things got so bad that Canada had to lower its taxes to undercut the contraband. Fortunately, other strategies and shifting public attitudes towards lighting up resulted in rates of smoking continuing to fall. Still, as the Liberal government in Ontario emphasized this week, contraband cigarettes from other sources remain a big problem.
Porous borders wreaking havoc with health policy is not confined to cigarettes. Junk food provides other examples where one state's efforts are stymied by other countries policies. The Danes passed a tax on junk food in 2011 that was saluted by health advocates. Yet it was scrapped shortly thereafter. It was repealed for a number of reason but an important one was that it was being evaded: Danes were going to neighboring countries, without such large taxes, to buy their groceries, including lots of calorically dense goodies subject to the Danish levies. Resolute action on the statute books was just bypassed in day to day life.
Then there is the borderless world of cyberspace. A few jurisdictions, such as Quebec and Mexico, have imposed various bans on advertising to children. These bans can be effective as studies of the impact of Quebec's prohibition have demonstrated. However, as television from countries where such bans are not in place, particularly America, and the essentially unregulated Internet proliferate the borders of the real world are shoved aside by boundless cyberspace. And gambling. There are many strategies employed to curtail problem wagering, especially at casinos. Whatever their effectiveness these constraints are too often bypassed when gaming takes place on the freewheeling Net.
Taxes on tobacco and junk food, restrictions of advertising to children, attempts to address problem gambling, and other strategies can be sound policies in appropriate circumstances to promote healthy choices. But their effectiveness can face a lot of hurdles. Initiatives in one jurisdiction can be limited by the failure to act by other societies and by the virtual world impinging on the efforts of the real one.
In this increasingly interdependent and connected world we need more local, international and global policy making and enforcement. But such broad based cooperation also gives rise to huge challenges. Canada should be a leader regarding such efforts. But is it? The job of a health regulator is no easy task.
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