Big Taxes Don't Touch Little Cigars
Tuesday, November 4, 2008
The packaging is pretty and the product sounds tasty, even a little wholesome. But inside the brightly colored wrappers that tout an assortment of flavors such as vanilla, strawberry and peach are cigars and cigarillos -- and, according to public health advocates, a not-so-subtle strategy to target young people with cheap, candy-flavored tobacco.
"They do not see these little cigars -- because of the candy flavor -- as smoking," said Debra Annand, director of health education services of the American Lung Association. Even worse, she said, is that federal regulations define cigars in a way that allows tobacco companies to escape the steep taxes that have been levied against cigarettes in recent years.
Health advocates know that smoking habits, particularly among adolescents, are affected by cost.
"It's like gas prices," said a 17-year-old girl smoking outside Jammin' Java in Vienna recently. "When they go down, you get excited."
Now a move is under way by public health advocates to push back against cigar usage by taxing some cigars like cigarettes.
Since 1990, the per capita consumption of cigars (defined by the Treasury Department's Alcohol and Tobacco Tax and Trade Bureau as any roll of tobacco wrapped in tobacco leaf or a substance containing tobacco) has more than doubled, according to the Cigar Association of America, a trade organization. That includes large, premium, hand-rolled brands and mass-market, machine-rolled cigars that vary in size, such as Swisher Sweet cigarillos, White Owls blunts and Black & Mild filter-tip cigars. Data suggest the consumption of "little cigars" such as Winchesters -- which resemble cigarettes in almost every way but color -- jumped 154 percent between 1998 and 2006, according to the Campaign for Tobacco-Free Kids, a Washington-based nonprofit.
Part of the reason is cost. Federal excise taxes amount to 39 cents on a pack of 20 cigarettes, while cigars are taxed at a maximum of five cents each, according to Art Resnick, a spokesman for the tobacco tax bureau. The federal tax on cigars the size of cigarettes that are sold in packs of 20 is just four cents per pack. When the District doubled the local tax on cigarettes to $2 a pack, effective Oct. 1, it left the cigar levy unchanged. Maryland taxes cigarettes at $2 a pack; all other tobacco products have a 15 percent sales tax. Virginia taxes cigarettes at 1.5 cents each, or 30 cents a pack. The Campaign for Tobacco-Free Kids has urged states to consider taxing all tobacco products to bring them in line with cigarettes. Ten states have imposed taxes that treat some cigars like cigarettes, the Cigar Association says.
Two years ago, the National Association of Attorneys General petitioned the tobacco tax bureau to reexamine its definition of little cigars, arguing that the tobacco makers were essentially disguising cigarettes as cigars to take advantage of the tax difference. The bureau is reviewing public comments and considering possible changes to the definition, Resnick said.
In May, Baltimore City Health Commissioner Joshua M. Sharfstein proposed banning the sale of single, cheap cigars. Noting that cigarettes must be sold in packs of 20 and cost as much as $5, Sharfstein would require Baltimore merchants to sell cigars in packs of five or more, with the aim of discouraging young people from trying the cheap nicotine hit of a single cigarillo. At present, some cigars, such as a Black & Mild filter-tip, can sell singly for as little as 69 cents, he said. "It just struck us as an enormous oversight," Sharfstein said, explaining that he wanted to fight the "balloon effect": Like squeezing a balloon, making cigarettes more expensive may be pushing more young people to try cigars.
"If it's implemented, it's not going to be a miracle fix of the problem, not by any stretch. But it's a component," the health commissioner said. Sharfstein said last week that he is reviewing public comments and considering whether to put the proposed rule into effect.
The National Youth Tobacco Survey suggests that the use of tobacco by young people peaked at 42.7 percent in 1997 and fell to about 28 percent before leveling off. But the use of cigars among youths increased slightly to 14 percent in 2005 from 11.6 percent three years earlier, according to a 2008 report in the American Journal of Health Behavior.
A 2007 survey of nearly 300 participants by researchers at the Johns Hopkins Bloomberg School of Public Health found that about 24 percent of people between 18 and 24 had smoked a Black & Mild cigarillo in the previous month. Sharfstein said Black & Milds are especially popular with African American smokers, sometimes seen as part of the hip-hop image. The brand, produced by John Middleton Inc., a Pennsylvania cigarmaker, was acquired last year by Altria Group, which owns Philip Morris USA, the largest tobacco company in the United States.