Pipe Smokers Intelligencer

When you need a tax increase, who you gonna call? Tobacco Busters.

When you need to balance a bloated legislative budget, who you gonna call? Tobacco Busters.

When your revenues are failing because of bad political policies, who you gonna call? Tobacco Busters.

That play off of the old “Ghostbusters” movie may sound silly, friends, but the sad truth is, states and the federal government fuel up on tax revenues from the tobacco industry.

And now, the New York Times on Sunday has come along to warn about a “roll your own tax loophole.” That was nice of the Times, don’t you think?

If you will recall, PSI warned you of such impending measures over a month ago after chatting with pipe tobacco insiders at the Conclave of Richmond (Va.) Pipe Smokers.

And, sure enough, the NYT is now calling on the Obama Administration to close the loophole the Roll Your Own tobacco industry saw as a way around the punitive taxation levied on that industry by the Obama Administration and the new federal smoking prohibition tax laws that were signed earlier in the year.

Taxes on RYO jumped, no, make that sky-rocketed, from around a buck a pound to about $25 a pound. You can figure the consequences of such an outlandish increase.

So the RYO boys came up with a way around the tax increases: they would tin their tobacco, call it pipe tobacco, and avoid (for now) the tax hike just for that one industry. And, while selling a tin of “pipe tobacco,” RYO would also sell you a sheaf of papers. Get it? Wink-wink.

On Sunday, the NYT being on top of all the news that fits, jumped on an Associated Press story of Nov. 17 emblazoned: Tobacco Execs Quickly Find Tax Loophole. That story pointed out: “It didn’t take long for the companies to find a multimillion-dollar loophole.

“As soon as the new law took effect, raising taxes on roll-your-own cigarettes from $1.10 to $24.78 a pound, companies adapted. They all but shut down their roll-your-own brands and reinvented them under a less-restricted, less-taxed category: pipe tobacco. It’s still destined to be rolled and smoked, but it’s taxed at barely a tenth the rate, $2.83 per pound.

“Pipe tobacco is normally too coarse and moist to roll into a cigarette, but nothing says it has to be. In fact, the Obama administration says the only distinction between pipe tobacco and roll-your-own tobacco is how it’s labeled, effectively giving tobacco marketing executives an opportunity to shape their own tax rate.”

You don’t have to be a brain surgeon to see what’s coming next: Pipe tobacco will be in the gun sights and the legislative tax increase hoppers.

If pipe tobacco suffers the same fate as RYO, you will see the effective shut down of a complete industry, with only bigtime cigarette tobacco manufacturers able to survive.

And that may be what was planned all along: since it is too costly to do business in America, Big Tobacco will just sell more of its products overseas (which, as you know, it began doing years and years ago).

Pipe tobacco, which now enjoys some relief from the imposed tariffs of the new prohibition standards, will suffer tremendously if the FDA under the Obama Administration hammers the RYO tobacco, and scooping up pipe tobacco with it at the same time.

If you are not stocking your favorite pipe tobaccos now, you will one day be without.
You can put that in your pipe and smoke it.

And, come to think of it, that is about all you will have to smoke.