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On June 3, 2008, cigarettes in New York City became the most expensive in the country. Packs retail around $8.50 because of $4.25 in state and city taxes.

On balance, the city’s high taxes since 2002 have reduced smoking and increased revenue. But the resulting black market sales – on street corners in Harlem, in Bronx bodegas and at sidewalk stalls in Chinatown – have important implications for criminal activity, public health and tax revenues. There have even been a handful of links to terrorist groups like Hamas.

Black Smoke is the story of the city’s clandestine trade. The Underground Economy explains the situation; Bronx Smoke Out profiles a smuggling ring that made $10 million a year before it was busted.

Packs of Newports traded hands along 125th Street recently. Photo by Lauren Lancaster

This article was Lawrence Delevingne’s Master’s Project at Columbia University’s Graduate School of Journalism in spring 2008. He has written on the issue for New York Magazine, BusinessWeek and City Limits. For more information on the author, visit his personal website.