New York City Mayor Michael Bloomberg hasn't taken very long to undo the great work that Rudy Gulliani had done in reducing the city's crime rate. The New York Post reports that the prohibitive cigarette tax has opened up the streets of New York to hard core "buttlegging", whereby cheaper smokes are smuggled in from out of town.

[The prohibitive tax rate has] created a fantastic business opportunity for those not too concerned with the fine points of tax law - a market with high demand, readily available low-cost supply, a low threshold for entry and easily circumvented government-imposed price controls that place legal competitors at a huge disadvantage. [...]

At about $40 profit per carton, there's a real incentive for rough play: Just 50 cartons a week nets six figures tax-free annually.

The result has been gangland turf wars and as many as four homicides directly related to the tax. Cody Knox was stabbed to death in November for undercutting a competitor's prices. Also in November, a cigarette dealer named Sherwin Henry was shot in the head in a robbery.

Also, keep in mind that all those smuggling dollars floating around are completely unregulated and may even end up in the hands of terrorists. One Michigan cigarette smuggling operation was suspected of having funneled millions to the Hezbolah terrorist group.

The Post also notes that since they are dealing a legal product, police and judges go pretty easy on them. A person busted for dealing cigarettes usually faces a summons or a small fine. With big pay days on the line, dealers engaged in turf wars have little remorse for their violent actions. Said one dealer, "Think about crack, man, how raw that got back in the 1980s. This ain't that bad yet, but there's easy, almost make-believe money to be made hawking smokes, so it don't matter what the police do . . . you're going to have crews setting up franchises, cutting up the city, and deading the competition."