Introduction General Overview of “Tobacco Companies Elude Tax Increase.” One of the most successful steps taken by President Barack Obama was signing a law where the issue of children’s health insurance is concerned. This information is mentioned from the very beginning of the article by Matt Apuzzo for Associated Press in November 2009. This author touches upon the issue of tobacco usage as one of the most effective means which can be used to improve our health care system and prevent people from making the biggest mistake in their lives – star smoking. The main theme of the article und1er consideration is that Obama’s law has led to a considerable increasing in taxes on cigarettes but still promoted the development of another, less taxed industry – pipe tobacco. Economic Concepts to Describe Walter Wessels (2000) admits that almost all economists try to use economic models or concepts in order to comprehend this world better. In this work, some economic models will be considered in order to understand the intentions of the author of the article “Tobacco Companies Elude Tax Increase” and clear up whether the information presented is reliable and useful. First of all, the concept of demand and supply (Adil, 2006) should be considered and investigated in the sphere of tobacco. Secondly, it is necessary to evaluate the tobacco market in action during some period of time and find out what years and why to become beneficial for the tobacco industry. The thesis of the work Apuzzo (2009) states that many tobacco companies just try to find out a new and effective way out to cope with a tax increase, this is why it turns out to be important to evaluate the tobacco market in action and the concept of demand and supply to clear up what encourage people to use tobacco and what components have to be included. Main Body Taxation of alcohol and tobacco Tierney Plumb (2009) admits that “raising alcohol taxes saves lives and saves society money.” His words about alcohol and its fast development may also cover the tobacco industry and explain how beneficial the tax increase may become for both spheres. When people start paying more for products, services, or information, they become thinking more about the outcomes and consequences of their actions and analyze whether these issues may cost so much. The changes in the sphere of alcohol and tobacco have much in common: both of them have many consumers, both of them have many competitors, and both of them face troubles from the governmental side. Challenges of the companies who suffer from taxation The increase in taxes makes any company take considerable actions and offer interesting propositions to attract new customers or at least not to lose old ones. Matt Apuzzo (2009) informs that small companies within the tobacco industry face considerable challenges because of huge and famous companies, and if it is not difficult for big organizations to change tobacco for pipe tobacco, small organizations cannot adapt to new working conditions and purposes. The demand for tobacco do not decrease, and people still continue buying cigarettes; but supply of tobacco faces challenges, and many companies lose their constant clients in a short pe