The large differences in excise tax rates for various smoking products are prompting consumers with a tobacco habit to shift their smoking habits to pipes and larger cigars, according to a new government study.
A report by the Government Accountability Office attributed the change in smoker preferences to the Children’s Health Insurance Program Reauthorization Act of 2009, or CHIPRA, which created opportunities for tax avoidance and led to significant market shifts by manufacturers and price-sensitive consumers toward lower-taxed products.
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