The Nation: The Buttleggers

The economics are elementary: buy cigarettes in a low-tax state like North Carolina (2¢ tax per package), bootleg them to a high-tax state like New York (as much as 23¢ per package) and count the profits. This year, buttleggers should gross some $500 million, most of it pocketed by organized criminals. Concerned tax agents from eight government units (the states of Pennsylvania, New York, Connecticut, Massachusetts, New Jersey, Maryland and Virginia, plus New York City) guess they are losing up to $300 million annually in revenues through interstate smuggling.

The taxmen figure that much of the haul is transported in tractor-trailers that...

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