When someone has a nicotine craving and no money to buy a pack of cigarettes made extremely expensive by state and local taxes, who can he or she turn to?
In Chicago, New York, and many other cities across the country, there is likely to be a “loose square man” ready to sell a single cigarette or two.
Filling a Need
“It’s easy to get a profit from selling loose squares. Everybody wants them, so I supply them,” said a Chicago-area loose square man who did not want to be identified.
The high demand for loose squares is largely the result of high cigarette taxes. In Chicago, the tax on a pack of cigarettes has risen 42 percent since 2006, to more than $4 a pack when federal, state, and local cigarette taxes are totaled. The loose square man sells a single cigarette for 50 cents and no tax.
The loose square men often travel to Indiana, where packs of cigarettes are less expensive than in Chicago because the taxes are lower. They drive back to Chicago and sell the single cigarettes, especially in lower-income neighborhoods, at local stores or on the corner. The selling of cigarettes brings income to low-income families trying to make extra money on the side.
But the loose square business is risky. In Cook County, Illinois, for example, it is illegal to sell single cigarettes without charging the tax. People have been arrested or fined for doing so. As a result, loose square men operate discreetly.
Such tax rebellions are something of an American tradition. John Hancock, signer of the Declaration of Independence, was one of many in the American revolutionary movement who engaged in smuggling, selling legal products that high taxes made too expensive for many people to afford.
Today’s loose square man may not be a John Hancock, but he is following in this Founding Father’s footsteps by providing a legal product many people cannot afford a pack at a time because of growing cigarette tax burdens.
Darrell Moore (firstname.lastname@example.org) is an administrative assistant for The Heartland Institute who knows some loose square cigarette sellers.
This article was published in Budget & Tax News, a publication of The Heartland Institute.