Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-09-17
CIGARETTE TAXES Il
/. MOUNTING RAP|DLYF
Government Specialists Are
SkepticaI of Wisdom in
Increasing Levies.
BY WILLIAM BRUCKARr.

Government specialists have begun to
wonder whether taxing authorities are
riding good horse to death in the
matter of levies on cigarettes. partic-
ularly in sales taxes by States, and
whether the continuing increase In the
burden portends revolutionary changes
in merchandising methods. There Is
obviously no danger that the industry
will be destroyed by taxation, but there
is potential revival of the roll-your-
own practice In the ofiing as means
Of eliminating some of the taxes that
cigarette consumers now are required
to pay, directly or indirectly.
The factor that has brought the
question Of taxation to the fore is the
promised development in mechanical
roll-your-own devices. Trade advices
received in the Government are to
the effect thu real drive to popuiarize
their use Is getting under way. Whether
it viii succe ID in cutting into the
ready-made cigarette sales can not now
be foretold, but the fact remains that
tobacco for use in roll-your-own meth
DDS bears a lot less tax.
Extent Of Levies.
The tax when the cigarette must
carry is IS per thousand under Fed
eral levy, plus an additional amount of
from one cent to five cents among "a
States in the Union. In seven other
States similar levies are IN prospect
for the coming sessions Of the Legis-
latures.
The rod. your-cEn devices have this
fact with which 70 start: The Federal
levy on. the type of tobacco used b.
-. 4 a.
be slightly more than 81 cents. There
would be sales tax in only a couple
of States. This calculation of the tax
is based on the trade practice of using
2.S4 pounds of @,bacco per thousand
cigarettes. So the specialists here say
that the difference is one substantial
enough to cause many persons to con-
slider it in hard times. And besides,
there is the novelty Of the thing to
help start It OF.
Government SPECIALISTS do not agree
as to the probable outcome of the at
tempt to revive the roil-your-own prac-
tice. Some of them think the tax ques-
ton viii have more weight than is now
realized. while others say the roll-your-
own pratice has gone for good. But
1t is agreed that the situation Is di-
recting the attention of the country as
whole to the share which the cigar
cite smoker is contributing to mainte-
nance of the several governments.
The trade recalls also that when the
price on the leading popular brands
Of cigarettes was raised a penny or so
pack recently mighty howl was heard
as consumers naturally object to price
increases, especially when the article
is low in price to start
From the standpoint Of the trade,
should the roll-your-own practice be-
come widespread, there is the matter
of changes that would necessarily follow
in the manufacturing plants. The
great cigarette manufacturing compa-
nieshaVe huge sums tied up in highly
specialized equipment used in cigarette
manufacture. The production of the
ordinary smoking tobacco has not been
at such a stupendous rate. so the in
yestment is not large. Yet any change
In public demand would have to be
met.
State Collections.
From the standpoint Of the Federal
Government any switch from the con-
sumption of cigarettes means reduce
ton in revenue from tobacco taxes,
because the chief item of income in
that group is the levy on cigarettes
In the last fiscal year, for example, the
cites reached the total of $3.50 .816, 000
The Federal Government has no fig-
ures on State collections, but it IS
known that the combined collections
by States exacting a payment in
sales of cigarettes exceed 500 600 900,
and with each additional State that
turns to this tax to augment its revenue
the total grows.
tCopyrisht. 1917