Congress recently proposed a $1.10 per-pack tax hike on cigarettes. The proposal has strong support and President Bill Clinton responded by urging an even larger increase $1.50 per pack and 26 states are considering additional cigarette tax hikes of their own.

Should these proposals pass, cigarettes in America could cost more than $3.56 a pack, and why shouldn’t they? After all, the more expensive cigarettes are, fewer teenagers will be able to buy them, cigarette tax supporters argue. Perhaps higher cigarette taxes could even add to the predicted budget surplus and pay off some of the national debt.

The trouble with a steep cigarette tax is not so much its burden on smokers. I do not smoke, and normally, I would hardly care about the cost of a pack of cigarettes, except for the fact that excessive cigarette taxes have created a financial bonanza for organized crime in other nations, and there is no reason not to expect the same results here.

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After Germany imposed a cigarettes tax raising the cost per pack to $3.60 in equivalent U.S. dollars, the Washington Times reported that the smuggling of cigarettes [caused] a surge in gangland-style executions and turf wars which made Berlin streets more dangerous than at any time since World War II. Authorities fear that cigarette trafficking is leading to crime empires dealing in extortion, stolen cars, drugs and weapons. Detlef Schade, a Berlin detective, was quoted as saying that since the tax hike, People are being executed in broad daylight on the streets, on subway platforms, in front of hundreds of witnesses.

Why all this over cigarettes? Higher costs raise the market for illegal sales, and a single truck loaded with 50,000 cartons can net a smuggler $550,000 in profits.

Syndicated columnist Bruce Bartlett reported that a quarter of the world’s cigarettes are now smuggled across national borders to evade taxes and tariffs. As more people smuggle their way around higher taxes, governments lose $16 billion per year in tax revenues. On the other hand, organized crime in Italy is said to make $500 million a year smuggling cigarettes.

In 1991, Canada raised the cost of cigarettes by 75 cents a pack. Reason magazine reports that by 1993, nearly one third of Canada’s cigarettes were bought illegally. The cigarette racket became so lucrative that retailers bore the brunt of the crime wave, where thieves found it more profitable to ignore cash and clean out the cigarettes.

Do higher cigarette taxes at least curb teenage smoking? No. In fact, they make it easier for minors to obtain cigarettes by increasing illicit sales. It is safe to say that thieves, smugglers and illegal cigarette dealers would hardly care how old their customers are.

It is easy to think we are dealing a sharp blow to Big Tobacco with higher cigarette taxes, but the real victims are those caught in the crossfire of organized crime and gang wars. In the end, high cigarette taxes do for today’s gangs what Prohibition did for Al Capone.