Essentially tobacco producers make pipe tobacco instead of loose. Pipe tobacco gets taxed less heavily. However, the producers make their "pipe" tobacco to the same standards one normally associates with loose (the kind for those who roll their own). Thus they make a similar product while avoiding some taxes.
First, the numbers...
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.
That proved an expensive technicality in the way the government pays for health insurance for poor children.
Seriously, you can't stow that shit? Not even for one article?
"We're still studying, from a technical standpoint, how to distinguish between the two products," said Arthur Resnick, a spokesman for the Alcohol and Tobacco Tax and Trade Bureau.
Tobacco is tobacco is tobacco, you fucking 'tards. You may as try to distinguish between bottled water & tap water someone put in a bottle.
"With the money we're losing, the deficits we have and the priority this administration and Congress have put on health care, to not find that revenue is just wrong," said Rep. Steve Cohen, D-Tenn., who wrote the bill to close the loophole.
Oh, so taxes are now "finding revenue?" I feel distinctly like a vein in a mine.