A tax on tobacco raised the price almost 2000% in some cases and rather than pay $20 for what used to cost $1 the tobacco industry has found a way out of paying the taxes. The biggest leap in prices hit cigarette tobacco, specifically tobacco that is used for roll-your-own cigarettes. So, the tobacco industry has begun marketing this type of tobacco as pipe tobacco, which saw little increase in price and isn’t defined by any standards in the government’s eyes. In essence, tobacco companies can, and in some cases are, simply selling this same tobacco used for the roll-you-own cigarettes but putting it in a container or bag marked “pipe tobacco.”
The tax did indeed bring a sharp price increase to the tobacco industry but the tax was set in place to pay for expanded children’s health insurance due to the allegations of tobacco companies purposely targeting children. There have been arguments and frustration on both sides about rebranding a product to avoid taxes and each side feels justified.
Tobacco companies say that such a heavy tax dealt a blow that has hurt their ability to do business and many companies are saying they had to lay off employees because of the drop in sales due to the tobacco tax. There are no legal criteria for what is rolling tobacco and pipe tobacco despite the differences in cut and texture. So, legally, the tobacco companies aren’t breaking the law by putting a different label on the same product.
However, anti-tobacco organizations are outraged at the action of these tobacco manufactures and say they are still able to sell a taxed product for much less than if they were abiding by the law. The issue of tobacco companies marketing to children is a major driving force in this tax and anti-tobacco groups had hoped the new tobacco tax would cut down on such marketing and help pay for children’s health insurance.
The government is said to be working on more definitive meanings and standards to what is rolling tobacco versus pipe tobacco. Until that time and the legislation is updated there is little to be done about the tobacco industry changing the title of types of tobacco to avoid taxes.
Newport, Tennessee is an area that has very high tobacco usage. Unfortunately, some end up spending so much money on tobacco in general that it makes it hard on their everyday lives. Some have to search for Newport, Tennessee Craigslist used cars to find alternatives to a new car as the financial issue has grown out of control. Rather than allowing this to happen always remember that everything is good in moderation.