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Higher Cigarette Taxes Drove Smokers to Pipe Tobacco and Cigars

April 19, 2012   New numbers show that taxing cigarettes drove up the sales of other forms of tobacco that are taxed at lower rates. The Children’s Health Insurance Program Reauthorization Act (CHIPRA) of 2009 increased and equalized federal excise tax rates for cigarettes, roll-your-own tobacco, and small cigars. It also increased tax rates on pipe tobacco and cigars, but not to the level of the other items. So, some savvy smokers realized there was money to be saved by simply switching to the less-taxed tobacco. According to the Government Accountability Office, monthly sales of pipe tobacco increased from approximately 240,000 pounds in January 2009 to over 3 million pounds in September 2011, while roll-your-own tobacco dropped from about 2 million pounds to 315,000 pounds. For the same months, large cigar sales increased from 411 million to over 1 billion cigars, while small cigars dropped from about 430 million to 60 million cigars.

For More Information:
http://consumerist.com/2012/04/higher-cigarette-taxes-drove-smokers-to-pipe-tobacco-cigars.html


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