Ridiculous tax on loose tobacco changes labels, not habits
Jump to full article: Spartanburg (SC) Herald-Journal, 2009-11-18
Intro: When the federal government raised the tax on the loose tobacco people use to roll their own cigarettes a staggering 2,000 percent, companies stopped selling "loose tobacco." Smokers stopped buying it. Very little of the projected tax revenue of $35 million per month appeared.
Yet smokers still roll their own cigarettes and still legally buy the ingredients.
Pipe tobacco is taxed at a rate of $2.83 per pound. Loose cigarette tobacco is now taxed at $24.78 per pound. . . .
Again and again we see that taxes meant to change the behavior of the taxed backfire. They rarely raise the revenue their proponents promise, generally don't cause people to act as predicted and often create unintended consequences.
The fairer a tax is, the harder it is to evade. . . .
Seemingly incapable of learning, the federal government is now looking to set stricter legal distinctions between pipe and cigarette tobacco in an attempt to collect its money. Unmentioned is the issue of why the tax on one should be 10 times the tax on the other.
Perhaps government policymakers think pipes are cool and intellectual, and home-rolled cigarettes are just uncouth. If so, that's a poor rationale for tax policy.
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