Money In Trash

It's not just the Sopranos who make illegal money in waste management. Just like an episode of Seinfeld, where Kramer and Newman were going to make money by hauling cans and bottles from New York to Michigan, where the deposit was higher, some real life entrepreneurs have been doing the exact same thing. They were buying aluminum cans and bottles in Mexico and other states with lower than the PRC deposit rates. They were paying $950 per ton for aluminum cans and turning them in to recycling centers in the PRC for $2,490 per ton. Plastic bottles netted even higher profits; selling for $90 a ton out of state and bringing in $910 in California. They have been arrested for their creativity and are looking at some serious criminal charges.

The fact that this kind of thing would happen shouldn't surprise anyone. Money is like a liquid, finding its own level. Any time there is a disparity in taxes or prices between jurisdictions, people will try to find a way to exploit it. It's exactly what is happening with the differences in taxes on cigarettes in the various states. On Wall Street, this kind of financial scenario is called arbitrage and its practitioners usually receive huge compensation.

KMK
- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 10/23/2002 09:56:00 PM Send this post: