Tumbling Down The Loophole
    June 1st, 2012

C. R. S. Lyles
In addition to the strain of added taxes
and its almost "guilty by association" nature, pipe tobacco is now facing a renewed threat (initially from 2010) to its survival in the form of loose tobacco being reclassified as pipe tobacco in order to avoid state and federal taxes. According to estimates published by the Orlando Sentinel, the Ithaca Journal and USA Today, the money lost in federal and state taxes due to the roll-your-own (RYO) reclassification of loose tobacco as pipe tobacco by switching the labels equaled roughly $615 million to over $1 billion federally and over $60 million in Florida alone from April 2009 to August 2011.

Of course, the general public takes these dollar figures as fact, and doesn’t recognize them as the speculative estimates that they truly are. This is usually the case with any type of made-up numbers being presented as facts to vilify tobacco. The population at large swallows them whole instead of perceiving them for the politically motivated hyperbole that they are.

This information was released in a report last month by the Centers for Disease Control and Prevention (CDC), and it claims that, after Florida, Texas was the second state to lose the most tax revenue (over $30 million) due to the nearly $22 difference per pound between RYO and pipe tobacco.

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