3/1/2013 6:48 PM ET|
Why your cigarettes may contain kitty litter
Some tobacco companies are adding an ingredient found in it to their products because the extra weight lets them avoid $1.1 billion in taxes.
The reason: by weighing down the products with a clay used in kitty-waste products, the cigarettes are actually classified as heavier "big cigars," reports Bloomberg. With that label, tobacco companies are avoiding a 2,653% jump in a federal excise tax.
The savings to the tobacco companies -- which means less revenue for the U.S. government -- may have totaled as much as $1.1 billion from April 2009 to September 2011, the story notes.
So what exactly is the kitty litter ingredient? Cheyenne International, a private company that specializes in cigars that look like cigarettes, makes a filter packed with a granular clay substance, which Bloomberg identified as sepiolite.
One of sepiolite's main uses is as a kitty litter ingredient because it has a high liquid absorption rate, according to minerals trade group IMA-Europe. Other uses include waste treatment and as an industrial absorbent.
While the Treasury Department told Bloomberg the companies aren't doing anything illegal by making their products heavier, the use of a kitty litter ingredient still carries an "ick" factor.
The main beneficiaries of the loophole may be smaller tobacco companies, according to Bloomberg. Altria (MO), the No. 1 tobacco company, said it didn't change how it formulates its Black & Mild line, while Reynolds American (RAI) doesn't operate in the cigar market, the story notes.
As a result of the new heavier products, a decade-long decline in tobacco usage is slowing, with the Centers for Disease Control and Prevention singling out the weightier products as spurring usage.
The CDC blames the tax loophole for creating demand for the heavier product, which it says "resembles a typical cigarette and can cost as little as 7 cents per cigar." By comparison, a pack of cigarettes in New York state cost $12.50 last year, according to the Awl. That means a single cigarette costs more than 62 cents.
"It shows what length the tobacco companies will go to avoid taxes and regulation that were designed to improve public health without regard to their customers," Danny McGoldrick, vice president of research at the Campaign for Tobacco Free Kids, told Bloomberg.
Kitty litter might not have a long future in the products, however. In January, Senator Dick Durbin (D-Ill.) introduced a bill that would close the tax loophole.
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