The following editorial appeared in the New York Times on Sunday.
Give the tobacco industry credit for ingenuity. Just when it looked as if federal regulators could block their ability to addict children and young adults, several companies that make cigars and pipe tobacco have sidestepped the barriers by taking advantage of loopholes in federal law.
One loophole involves a law enacted in 2009 that raised the federal tax on cigarettes, small cigars and roll-your-own tobacco, partly to deter smoking among young people and partly to help pay for a children’s health insurance program. Larger cigars and pipe tobacco, however, were taxed at a much lower rate.
Some manufacturers then relabeled “roll-your-own tobacco” as “pipe tobacco” to qualify for lower taxes. Similarly, some cigar makers made their small cigars slightly heavier to qualify for the lower rate. With just a small increase in weight, a small cigar can qualify as a large cigar, for tax purposes, even though it more nearly resembles a typical cigarette and can cost as little as 7 cents a cigar.
The federal Centers for Disease Control and Prevention reported in August that a steady decline in cigarette consumption over the past decade had been partially offset by a big increase in consumption of pipe tobacco and large cigars.
The second loophole involves a separate federal law enacted in 2009 that gave the Food and Drug Administration the authority to regulate tobacco products. The agency banned candy and fruit flavors in cigarettes so that young people would not be enticed into the habit. But cigars were not covered. As a result, the use of flavored cigars appears to have skyrocketed among young adults and is also affecting the smoking habits of school-age youngsters.
Adults ages 18 to 24 have a much higher rate of cigar smoking than older adults and are much more likely to smoke flavored cigars. There is also evidence that even younger people are being similarly affected. A study in Maryland found that while cigarette smoking declined sharply in the state between 2000 and 2010, cigar smoking among high school students rose by 11 percent, and three-fourths of those students smoked flavored cigars.
It seems clear that the regulatory steps designed to keep tobacco products out of the hands of young people are not working as well as they could. This is no accident.
A report issued on Aug. 27 by Rep. Henry Waxman, D-Calif., who is the ranking member of the House Committee on Energy and Commerce, cited internal documents from several manufacturers that revealed deliberate plans to manipulate existing products and create new ones to evade taxes and flavor bans.
The FDA, which has the authority to extend its jurisdiction to cigars and other tobacco products any time it wishes, should move to eliminate flavored cigars and other manipulative practices as soon as it has enough evidence.
As for the disparity in tax rates, Congress and the states ought to tax all tobacco products at the same rate to prevent shifting to lower-taxed products.