News Headlines Article

Tobacco loophole in child health law costs $250M
San Francisco Chronicle

A tobacco tax loophole in President Barack Obama’s children’s health insurance program cost the government more than $250 million in its first year, public health officials say.

The loophole allowed companies to avoid huge tax increases on loose rolling tobacco by relabeling their product as pipe tobacco. The simple marketing twist lets companies pay $2.83 per pound, rather than the $24.78 per pound levied on rolling tobacco.

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