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Smokers dodge cigarette tax by switching to pipes, cigars  

Jump to full article: USA Today, 2012-05-03
Author: Brian Tumulty, Gannett Washington Bureau

Intro:

Sales of pipe tobacco and large cigars, both taxed at a lower rate, have soared as smokers have adjusted their buying habits to the new price structure.

The shift cost the federal government $615 million to $1.1 billion in uncollected tax revenue from April 2009 to September 2011, the report said. It did not estimate how much individual states may have lost in uncollected taxes.

"That's real money and a tax avoidance scheme Congress ought to be interested in stopping," said Gregg Haifley, associate director of federal relations at the American Cancer Society's Cancer Action Network. "It's also counterproductive for the public health benefit of tobacco taxes."

Monthly sales of pipe tobacco increased from about 240,000 pounds in January 2009 to more than 3 million pounds in September 2011, the Government Accountability Office found. Monthly sales of large cigars more than doubled, from 411 million pounds to more than 1 billion pounds.

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