The federal cigarette tax jumped 156%, from $0.39 to $1.00 per pack. The tax on chewing tobacco increased to $0.50, and to $2.38/lb for pipe tobacco.
The tax on bulk tobacco - the variety used by people who roll their own cigarettes - increased* 2,159%*, from $1.10/lb to $24.78/lb.
Is it just me, or does this reek of collaboration between congress (who would seek to offset the loss of tax dollars incurred by the per-pack increase quitters) and Big Tobacco (who would profit from the shift of smokers from roll-your-own to manufactured cigarettes)? Or does this essentially close a loophole, and bring the tax rate per home-rolled cigarette in line with the manufactured variety? I can’t find any information on how many cigarettes one pound of loose tobacco produces, so that may well be the case. Either way, a 2,159% tax increase seems a bit over the top, considering that thousands, and more likely, tens of thousands of American workers may well lose their jobs over this hike, when their niche market collapses.
edit: According to one supplier, 1lb of loose tobacco can produce between as many cigarettes as 2.5 to 3.0 cartons of pre-rolled cigarettes, which would mean the latest increase would bring the price per cigarette in line with the tax rate on manufactured cigarettes. So essentially, they’ve removed the primary incentive for smokers to roll their own, which will likely push many or most smokers into the prefab market, sufficient to cripple the small producers. Congress can call it fair taxation, Big Tobacco calls it a victory.
