|Federal Information & News Dispatch, Inc.|
The tax evasion tale goes like this: In 2009,
Products that would have been labeled "roll-your-own" tobacco one day were labeled "pipe" tobacco the next, and the tax bill on them plummeted. Companies also stuffed "small cigars" with a few extra grams of tobacco. That way, they'd be considered "large cigars" and be taxed at a lower rate.
The numbers show how big this loophole has become. Sales of pipe tobacco have skyrocketed -- more than tenfold in just five years. It seems implausible that so many more Americans would suddenly start smoking pipes.
All it takes to exploit this loophole is some ink on a label, and the committee will see it demonstrated today. No muss, no fuss, no teams of tax lawyers pouring over legal documents.
Unfortunately, the financial burden this loophole inflicts on America's taxpayers is enormous. The committee will hear today that the tobacco loophole has cost taxpayers more than
Furthermore, the loophole seriously undermines the effort to discourage smoking among America's children and teens. According to the Surgeon General, evidence shows that raising the cost of cigarettes stops kids from smoking. But when tobacco is cheap because of a blatant loophole, young people will buy it.
TTB has had ample time to solve this problem, but it hasn't followed through. Today we are going to ask why. Is it a lack of resources needed to mount an adequate effort at enforcement? After all, TTB has only four criminal agents to enforce the law for the entire country. Could it be that one hand doesn't know what the other is up to? When the
My bottom line is that this loophole hurts taxpayers and kids, and it needs to be closed. As always, we will seek to address this important issue in a bipartisan manner.
Read this original document at: http://www.finance.senate.gov/imo/media/doc/Wyden%20Statement1.pdf
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