Tobacco taxes help fund terrorists groups

The next terror attack on America could be a self-inflicted wound — specifically a cigarette burn.

Politicians expand tobacco taxes to discourage smoking and feed their own nicotine-like addiction to public spending. Like so many others, this government action smolders with unintended consequences. Tobacco taxes create a perfect arbitrage opportunity that radical Muslims exploit to collect money for terrorist groups that murder Americans and our allies. Tobacco taxes should be cut, or at least frozen, before they fuel further Islamic — extremist violence.

Consider the first attack on the Twin Towers, which killed six and injured 1,040. As Patrick Fleenor recalled in a Cato Institute study, "counterfeit cigarette tax stamps were found in an apartment used by members of the Egyptian Islamic Jihad cell that carried out the 1993 bombing of the World Trade Center."

Smugglers buy cigarettes in low-tax states, disguise them with bogus tax stamps, sell them in corresponding high-tax locales, and pocket the difference. A $2.70 spread separates Virginia's 30-cent-per-pack cigarette tax and Connecticut's at $3.00. Driving 1,500 cigarette cartons (10 packs per carton) from Arlington to Hartford yields $40,500 per trip.

This incentive grows, as tax-hungry politicians raise tobacco levies to finance government spending. President Barack Obama signed a 62-cent-per-pack federal cigarette-tax increase — from 39 cents to $1.01. This violated Obama's solemn pledge that families earning less than $250,000 "will not see any of your taxes increase one single dime."

New York Gov. David Paterson, a Democrat, wants to boost per-pack taxes from $2.75 to $3.75. If Paterson prevails, add Gotham's $1.50-per-pack tax and Uncle Sam's take. Manhattan smokers could pay $6.26 per pack in taxes alone.

Terrorists move cigarettes because they are light, portable, otherwise legal, and produce cash. "Law enforcement officials in New York State estimate that well-organized cigarette smuggling networks generate between $200,000 and $300,000 per week," a 2008 House Homeland Security Committee staff report concluded. "A large percentage of the money is believed to be sent back to the Middle East, where it directly or indirectly finances groups such as Hezbollah, Hamas, and al-Qaida."

— The notorious "Lackawanna Six" Islamic-terror cell reportedly traveled in 2001 from Buffalo to al-Qaida's al Farooq training camp in Afghanistan. They scored $14,000 in travel money from Aref Ahmed, a former gas-station operator who was among five defendants convicted in 2004 for cigarette trafficking and money laundering.