Up in smoke: Taxes on rolling tobacco increasing by 2,200 percent

by Brian McVicar | The Muskegon Chronicle
Muskegon News
Mar. 31, 2009

This is economic terrorism. - ILChris Thomas has been rolling her way around steep cigarette taxes for years -- until now.

Smokers like Thomas, who save big bucks by rolling their own cigarettes, will take a huge hit when a new federal tobacco tax takes effect April 1. The tax -- which will help fund children's health care -- on a pound of rolling tobacco will jump from $1.09 to $24.78, an increase of about 2,200 percent.

Cigarettes also will see a tax hike of 62 cents per pack.

"It's not earth shattering, but it's a betrayal," said Thomas, who in an effort to stock up on tobacco before the tax takes effect, had just bought two pounds of rolling tobacco on a recent afternoon. "I'm going to buy more before this takes effect, even if I have to take my bottles back."

For years, smokers have sidestepped the large tax on cigarettes by rolling their own. Unlike pre-packaged cigarettes, which have seen numerous tax increases in recent years, rolling tobacco has remained largely untouched.

Brad Burk, director of federal government relations at The American Cancer Society, said the increase makes pricing more equitable.

"This is an attempt to bring those products in line with the others," Burk said. "Certainly, over the last five years, there's been a growing voice that there's not parity between the two."

Smoking loose tobacco rolled by users has yielded big savings for smokers. Thomas says she saves about $100 per month by rolling her own.

"That's a week's groceries," she said. "I made the switch three years ago when I couldn't afford the tax on regular (cigarettes.)"

The cost of "rolling your own" to skyrocket


The looming tax increase -- which is expected to raise $35 billion a year -- has prompted many West Michigan smokers to stock up. At Admiral Discount Tobacco on Apple Avenue one customer purchased 25 6-ounce bags of rolling tobacco, said Thresa Shomin, an employee at the store.

"One lady said her freezer's full of tobacco," she said. "People are stocking up."

Smokers had plenty of rotten things to say about the increase. During the afternoon rush at Admiral Discount Tobacco on Henry Street, nearly every customer that walked through the door was huffing and puffing over their favorite vice being "unfairly" targeted.

"They just keep jacking the prices up," said Susan Harvey, a 55-year-old Muskegon resident who was shocked to hear about the tax increase. "It feels like they're screwing smokers and leaving everybody else alone."

During the past two years, Harvey said she has saved " a lot" of money by rolling her own, savings she is sad to see go.

"I'm on a fixed income," said Harvey, who typically goes through a 1-pound bag of tobacco -- the equivalent of roughly 2½ cartons -- a month. "As things go up you have to adjust."

Does that mean we'll see fewer smokers lighting up?

Maybe.

Typically, tax increases slightly reduce the number of smokers, Burk said. For "every 10 percent increase in the real price of cigarettes, overall cigarette consumption is reduced by approximately 3 to 5 percent," according to the Campaign for Tobacco-Free Kids.

Twenty-one percent of Michigan adults smoke.

Promises of quitting were more than frequent at Muskegon smoke shops. Heather Mundt, a 42-year-old Norton Shores resident, said Tuesday was the last time she was forking over more than $120 for two cartons of Virginia Slims. She said the tax increase would make a month's supply of cigarettes more than $200.

A one-month supply of cigarettes are "going to be as much as my Comcast bill," Mundt said. "Do I want phone, Internet and cable or cigarettes."

Denise Campfield has heard customers make that declaration before.

"I've been here 11 years," said Campfield, noting that numerous tax increases have occurred during that time. "Three-quarters of my customers are still here."

Campfield said business is usually steady at her store, but with the tax-increase approaching, customers have been stocking up. Many are buying four or five bags of tobacco at a time.

"You hear all kinds of things," she said. "Some people are saying they're going to grow their own tobacco or that it's cheaper to smoke (marijuana.)"












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