CDC Report Exposes Tobacco Companies’ Latest Tricks to Promote Smoking
August 03, 2012
A new report released by the U.S. Centers for Disease Control and Prevention shows that tobacco companies are manipulating their products to avoid taxes and regulations aimed at reducing smoking, undermining the fight against the nation’s leading cause of preventable death.
In particular, tobacco companies have mislabeled roll-your-own tobacco as pipe tobacco and increased the weight of many cigars to escape higher tobacco taxes imposed by a 2009 federal law. By keeping the prices of these products low, tobacco companies are attracting kids and keeping smokers hooked.
This report demonstrates the need to equalize taxes on all tobacco products and for the Food and Drug Administration to regulate all tobacco products.
Congress and the states should increase tax rates on all tobacco products to the same rate as cigarettes to prevent tobacco companies from taking advantage of tax disparities to increase use of lower-taxed products. Congress must also reject pending legislation that would exempt some cigars from FDA regulation, which would create yet another loophole that tobacco companies would exploit to market their products to kids and discourage smokers from quitting.
The CDC report demonstrates how tobacco companies have taken advantage of loopholes in a 2009 federal law that increased taxes on tobacco products. The law increased the federal cigarette tax to $1.01 per pack and taxed small cigars and roll-your-own tobacco at the same rate as cigarettes. However, larger cigars (those weighing more than three pounds per 1,000 cigars), pipe tobacco and smokeless tobacco were taxed at much lower rates, spawning widespread tax evasion schemes.
These pictures tell the story
Labeled as roll-your-own cigarette tobacco, the product on the left is taxed at the same rate as cigarettes. But labeled as pipe tobacco, it is taxed at a much lower rate even if it is still used to make roll-your-own cigarettes.
This picture shows three products — labeled cigarettes, little cigars and cigars – that are alike in almost every way except their weight and wrapper. But the product labeled cigars is taxed at a much lower rate just because it weighs slightly more.
As the report’s co-author Michael Tynan told USA TODAY, “They look like cigarettes. They smoke like cigarettes .... They are cheaper than cigarettes, because of the tax issues. But they are just as deadly. They contain the same toxic chemicals.”
To learn more, read our press statement on the report.