Friday, August 03, 2012

Smokers Go for the Less Taxed Tobacco

Loose Tobacco for Sale

The good news is that cigarette smoking is down, but the bad news is that overall smoking tobacco use is about the same.


Smokers are changing to other forms of tobacco smoking than cigarettes in order to avoid federal excise taxes.

Fewer Americans are smoking cigarettes, but a growing number are turning to cigarettelike cigars that can sell for as little as seven cents apiece or to making cigarettes from inexpensive loose tobacco labeled for pipe use, the Centers for Disease Control and Prevention reported Thursday.

Sales of these other forms of tobacco — which are taxed at significantly lower rates than both cigarettes and tobacco specifically labeled “roll your own” — have soared in recent years, the C.D.C. said. The amount of loose pipe tobacco sold in 2011 was enough to make 17.5 billion cigarettes, a sixfold increase over the amount sold in 2008.

Meanwhile, sales of loose tobacco specifically labeled for roll-your-own use and taxed at higher rates dropped by 75 percent during the same four-year period.

“While consumption patterns of traditional cigarettes have continued to decline, when we take into account these alternative cigarettelike products, we’re seeing a lack of change in the overall consumption of burned tobacco that is being inhaled,” said Terry Pechacek, associate director for science with the C.D.C. Office on Smoking and Health in Atlanta and one of the report’s authors.

Overall consumption dropped by less than 1 percent in 2011 from 2010, he said.

And, the loose type of tobacco can be flavored and made more attractive to younger smokers.

What is the federal government's response?

The Obama Administration wants to tighten up the taxation laws.

But, where have they been the past few years?

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