GAO report tracks impact of 2009 US tobacco tax increases

[Bill Godshall]

GAO report finds 2009 tax increases caused disparaties between different tobacco products
U.S. GAO - Tobacco Taxes: Large Disparities in Rates for Smoking Products Trigger Significant Market Shifts to Avoid Higher Taxes
http://www.gao.gov/assets/600/590192.pdf

In this news story, some of those who lobbied for the 2009 tobacco tax increases are criticizing the current tobacco tax rates.
Report cites major shift in smoking habits since 2009 tax increase | Press & Sun-Bulletin | pressconnects.com

Regardless of one's views on tobacco taxation, this report documents the enormous impact tax policies can have on consumption of different tobacco products.

 

[TennDave]

So they are proposing to tax cigars and RYO even more?
If the previous trend continues, smokers will switch to even less expensive methods of nicotine use- possibly SNUS and E-cigs...I guess they will come after these for taxation as well- after all, the "Children's health" depends on it...

 

[Vocalek]

What GAO Recommends

As Congress continues its oversight of CHIPRA and Tobacco Control Act implementation, it should consider equalizing tax rates on roll-your-own and pipe tobacco and, in consultation with Treasury, consider options for reducing tax avoidance due to tax differentials between small and large cigars. Treasury generally agreed with GAO’s conclusions and observations.

GAO's goal apparently is to maximize (tax) revenue, with no regard to health effects of various products.

Pipe smokers and cigar smokers who do not inhale have about 50% the risk of smoking-related diseases compared with cigarette smokers. The bad news is that cigarette smokers who switch to these products often continue to inhale, which eliminates the health advantage.