By Ed Lowe
Senior Writer
Many years ago, the cost of cigarettes in Illinois was so much higher than it was in Indiana that a cottage industry sprang up along the State line. Entrepreneurs opened cigarette stands where they sold smokes by the case to Illinois residents eager to save money. Prices have gone up in both states since then but the disparity in pricing continues. Now, the Governor wants to raise the cigarette tax again. The Cook County Board President tried to balance his budget on the back of another cigarette tax hike a few months ago.
In those old days of cross-border cigarette buying, the State of Illinois planted sharp-eyed, binocular-using tax agents atop the Chicago Skyway in order to take down license numbers of Illinois motorists stopping at those Indiana cigarette stands. Then, the State sent outrageous bills to the owners of cars whose license plates were spotted by the agents asserting that they had bought cigarettes and illegally transported them across State lines without the payment of appropriate taxes to the sovereign State of Illinois.
The courts eventually heard the State’s case and tossed it out the window. In the first place, owning a license plate doesn’t mean that the owner was the purchaser of the cigarettes. And then there’s the little matter of that pesky U.S. Constitution which, in its interstate commerce clause, prohibits one state from taxing the produce of another state. The wording is simple: Article 1, Section 8 reads: Congress shall have the power to regulate commerce among the several states. And Article 9, Section 5 says: No tax or duty shall be laid on articles exported from any state.
It was because of these basic rules that a recent Federal Court decision ruled that New York’s attempt to ban the sale of cigarettes on the Internet violates the U.S. Constitution. This is a recent decision, but the rule has been in effect for a long time. Thus it was that Indiana cigarettes, as long as they were legally purchased, could be brought into Illinois. In fact some of those stands are still in business along Indianapolis Boulevard across the State line. Others are in border towns southeast of the city and do a thriving business.
Another device for avoiding onerous taxes by Illinoisans was to buy the smokes by mail order. Once again, the U.S. Constitution protected buyers from the heavy hand of the Illinois tax collectors. Now, in a more recent development, Internet purchases are equally legal and, as long as shipping and handling charges don’t eat up the savings, heavy smokers, however foolish they might be with regard to their health, can puff their way into oblivion more cheaply.
In another recent news article, the Mayor has announced that he has to raise the minimum charge for parking in Millennium Park from $10 to $12. The people who occasionally use the underground facility probably will grouse, but really don’t have any alternative to parking there. Many simply won’t come to the park, which is a shame. Especially affected by this absence will be the retail merchants who profit from the visitors from the suburbs and out of town who, after oohing and aahing at the "Bean," go on to spend money in the nearby Mag Mile shops. The Mayor frankly stated that the parking garage is not returning enough money to pay its bond debt. There’s a reserve fund that’s being used now to pay bondholders. When that fund runs out, we’ll all be taxed in one way or another to pay for the extravagant spending that is the park’s legacy.
It’s another example of Mayoral short-sightedness. If we had spent the original budget, we wouldn’t have had the magnificent park we now enjoy. But we also wouldn’t have to foot the bill for that magnificence; for that elaborate peristyle, for the Gehry pigeon roost and for the glory of contributing to the memorial created on behalf of a group of very wealthy Chicagoans who provided some, but not all, of the funds to the City for the construction of the park.
A long time ago, a group of disgruntled citizens dressed up in Indian costumes and boarded a ship in the Boston harbor. They proceeded to dump a load of tea into the water as a form of protest against the excessive taxes that the British crown had imposed on the popular drink. The action led to the American Revolution and, ultimately, to the formation of the nation we all live in today.
It’s doubtful that the water in Boston’s harbor tastes any better today than it did in 1774. But those revolutionaries made a point and, by avoiding the drinking of tea, they showed that there was no profit in over-taxation of any commodity. The economic law of supply and demand takes over in determining the buying habits of people. It’s also true, as it was hundreds of years ago, that "the power to tax is the power to destroy." I can’t help wondering what the Mayor and Governor are trying to destroy. Any ideas? |
