Matt Apuzzo, of the Associated Press reported on a tax loophole that many Big Tobacco manufactures quickly jumped on to reduce their tax base.
By cleverly changing product marketing they are effectively dodging taxes that would have gone to support the cost of children’s health insurance.
It didn’t take long for many makers of tobacco products to catch on. They switched gears immediately to take advantage of the different tax rates between cigarette tobacco and loose pipe tobacco.
Roll-your-own brands of loose tobacco like Criss Cross and Farmers Gold were quickly pulled from the shelves of the tobacco shops. In their place new types of pipe tobacco bearing the same labels almost instantaneously appeared.
We all know those who roll their own cigarettes will purchase the “new varieties” of pipe tobacco to beat the rising costs of smoking cigarettes.
What is most worrisome about this move is pipe tobacco is not banned from adding flavors like tobacco companies did to cigarettes.
Now that new types of flavored pipe tobaccos are finding their way on the shelves, this could ignite a whole new movement for hooking young smokers.
The new varieties of packaged pipe tobacco are also manufactured with a finer cut, suitable for rolling in flavors such as black cherry, vanilla, and who knows what else.
This move did not go unnoticed; The Obama administration is looking into tightening their definitions so hopefully the funding for children’s health care remains effective. This costly loophole may be causing as much as $32 million dollars of lost tax revenue each month because pipe tobacco sales are rising as roll-your-own sales are drastically being reduced.
The tobacco company tax dodging strategy has our wheels turning at CiggyFree.com. Next, we may see tobacco companies reinventing Popeye as their spokesperson. The new product campaigns may just offer disposable pipes that go along with disposable lighters combined with packets of flavored tobacco aimed at enticing young smokers. Would it surprise us? No!
Credit: Matt Apuzzo, Associated Press & Popeye Cartoons