Big Tobacco: Corporate Insight and the Red Road

Charles Kader
January 16, 2013

A recent study by the economist John Dunham on behalf of the New York Association of Convenience Stores (NYACS) attempted to show that untaxed packs of cigarettes were acquired on a one to one basis for every taxable pack of cigarettes purchased by New York State citizens. Conclusions reached by this report included the assertion that New York State failed to do enough “…to further close down an obvious avenue of tax avoidance,” i.e., Native American businesses which were circumventing established state tax schemes. The report immediately drew news outlet headlines.

Mr. Dunham’s policy group counts Big Tobacco among its clientele.

A sociology mentor of mine would reference the adage “lies, damn lies and statistics” in class. Although the Dunham study may have taken some liberties with the raw data, the point it was trying to make was made; the problem is that New York cigarette taxes are too high. This conclusion was also reached by Jonathan Taylor in 2008 in an economic impact study commissioned by the St. Regis Mohawk Tribe. Taylor wrote presciently, “taxes diminish the losers by more than the winners gain.”

Instead of sticking to these revealed economic maxims, the Dunham report illuminated the real agenda at hand, stigmatizing Indian country businesses in New York, as well as in “other states with Native American reservations.” The now cliché tie-in between “organized crime, drug gangs, human trafficking and terrorism” and untaxed cigarette sales is established mid-report. The report hopefully offers “there are some immediate steps that New York should be taking…to enforce existing laws pertaining to Native Americans that could reap significant benefits.”

Only policy wonks will believe these pat answers after reading them. Ask the New York State Police how effective baton-swinging tactics are with non combatives, as that agency prepares to settle a 1997 brutality lawsuit in Onondaga Territory stemming from a raid on ceremonial tobacco-burning Onkwehonweh (Original People). Lionizing whole reservations and stirring a new generation of Haudenosaunee (Iroquois) to action is one byproduct of such hyperbole. It may be easy to start that fire, but it is much harder to put out thereafter.

Political highway theatre might be one way of thinking about grass roots pushback to thinly veiled coercion. The roads and power lines and pipelines routed through sovereign territories may have been expediently planned back in the day as convenient usage of restricted land. Now, each conveyance is an exploitable resource and exposed pressure point. It is possible that bluster has an even deeper response from threatened Onkwehonweh populations. Establishing new businesses under Indian Title land ownership, closer to metropolitan consumers, would further alter the landscape of commercialism. On-premises Indian smoke shop sales take on a whole new meaning when conducted from RV’s in Times Square.

To date, the satisfaction of reservation businesses has been just to stay open in many cases. Many such entrepreneurial efforts die on the vine without mainstream financing opportunities due to collateral recovery obstacles by lenders. If that is not enough evidence of the implications of doing business on sovereign reservations, then I do not know what is. Yet, this original status is often trivialized.

There is also a political element to the latest study. John Dunham has a recent track record of working with Republican Party candidates on both regional, as well as national levels, including former presidential candidate Texas Governor Rick Perry and former Connecticut Senate candidate / World Wrestling Entertainment (WWE) executive Linda McMahon.

In classic style, deriding New York State tax impotence also poorly lights the halo of rising Democratic Party star, Governor Andrew Cuomo. It should be noted that Andrew’s father, former Governor Mario Cuomo, developed the experience that New York State government has called upon to assist with Onkwehonweh socio-economic issues, for more than a quarter-century. This in-house counsel surely lends itself to the current occupant of the Governor’s Mansion to avoid thinking that he can bludgeon these factors to solution. The recognition of complex problems is vital to any executive seasoning. Look before you leap.

New York citizens are also voters, as well as tax payers. They are not the enemy of Onkwehonweh commerce. In fact, they support it with every visit to reservation areas, voting with their feet. They understand that relationship quite well, as well as why they have that personal choice.

On the other hand, anti-sovereign activists such as the Central New York-based Upstate Citizens for Equity (UCE) relish the substance of this report. This group has sought the dissolution of Onkwehonweh businesses by brute force. The desire of such an agenda hinges on the complicity of followers to not think critically and make broad assumptions of fact.
Meanwhile, high cigarette taxes direct many citizens down reservation roads, where they are met by waiting friends. Friendships that last a lifetime.

Charles Kader (Turtle Clan) was born in Erie, Pennsylvania to a World War Two veteran. He attended Clarion University of Pennsylvania, earning degrees in Communication and Library Science, as well as Mercyhurst College where he earned a graduate degree in the Administration of Justice. He has worked across Indian country, from the Blackfeet Community College in Browning, Montana (where he married his wife) to the Saint Regis Mohawk Tribe, and now resides in Kanienkeh.

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