SOME TOBACCO companies have pulled another one on the federal government. By relabeling their product, the companies are avoiding a punitive tax placed on rollyour-own tobacco products.
Congress and the Obama administration raised taxes on tobacco products earlier this year, with taxes on tobacco for roll-your-own cheap cigarettes skyrocketing from $1.10 per pound to $24.78 per pound. That’s more than a 2,000-percent jump.
Ostensibly, the tobacco tax increases were to pay for expanding children’s health insurance programs. But such an increase on roll-your-own tobacco was obviously meant to do more then help pay for pediatricians. According to an Associated Press story it was predicted that the tax would kill the roll-your-own industry, which had portrayed itself as a cheaper alternative to packaged cigarettes.
As former Chief Justice John Marshall once noted: The power to tax involves the power to destroy. It’s obvious that Congress and the administration intended to use the roll-your-own tax as a means of destroying the industry.
That is wrong and the antithesis of what the government should be doing with its power of taxation.
The legitimate power to tax is to pay for the functions of government. It shouldn’t be used to redistribute income, affect behavior or destroy an industry.
Tobacco companies have found a way to escape this destructive tax. They’re relabeling the merchandise as pipe tobacco. The tax on pipe tobacco is significantly less expensive — $2.83 per pound.
Generally, the Associated Press report notes, pipe tobacco is coarser and moister than cigarette tobacco. But there’s no law requiring it to be. And apparently the only distinction in federal law is the way it’s labeled.
Certainly, tobacco use and abuse can lead to many health problems. Those ailments include lung cancer, respiratory diseases and heart disease. The effects of smoking have taken far too many lives prematurely.
Yet many people in our nation, despite knowing the research, the dangers and the statistics, continue to smoke because they choose to do so.
But that choice should be made based on their own desire and motivation, not based on a tax policy that seeks to make their habit cost-prohibitive.
A free nation should not invoke a punitive tax policy for anything.
- Tobacco Loophole In Child Health Law Will Cost Government $250 Million
- Lost in loophole
- A moving target
- The Future of Lane
- Conflicting messages on tobacco