Some manufacturers then relabeled “roll-your-own tobacco” as “pipe tobacco” to qualify for lower taxes. Similarly, some cigar makers made their small cigars slightly heavier to qualify for the lower rate. With just a small increase in weight, a small cigar can qualify as a large cigar, for tax purposes, even though it more nearly resembles a typical cigarette and can cost as little as seven cents a cigar.
The federal Centers for Disease Control and Prevention reported in August that a steady decline in cigarette consumption over the past decade had been partially offset by a big increase in consumption of pipe tobacco and large cigars.
The second loophole involves a separate federal law enacted in 2009 that gave the Food and Drug Administration the authority to regulate tobacco products. The agency banned candy and fruit flavors in cigarettes so that young people would not be enticed into the habit. But cigars were not covered. As a result, the use of flavored cigars appears to have skyrocketed among young adults and is also affecting the smoking habits of school-age youngsters.
Young adults ages 18 to 24 years old have a much higher rate of cigar smoking than older adults and are much more likely to smoke flavored cigars. There is also evidence that even younger people are being similarly affected. A study in Maryland found that while cigarette smoking declined sharply in the state between 2000 and 2010, cigar smoking among high school students rose by 11 percent, and three-fourths of those students smoked flavored cigars.
It seems clear that the regulatory steps designed to keep tobacco products out of the hands of young people are not working as well as they could. This is no accident. A report issued on Aug. 27 by Representative Henry Waxman, a Democrat of California, who is the ranking member of the House Committee on Energy and Commerce, cited internal documents from several manufacturers that revealed deliberate plans to manipulate existing products and create new ones to evade taxes and flavor bans.
The F.D.A., which has the authority to extend its jurisdiction to cigars and other tobacco products any time it wishes, should move to eliminate flavored cigars and other manipulative practices as soon as it has enough evidence. As for the disparity in tax rates, Congress and the states ought to tax all tobacco products at the same rate to prevent shifting to lower-taxed products.
Original article on The New York Times