Many RYO retailers are hoping to clear existing inventory before April 1 to avoid the Floor Tax which marks all current stock immediately taxable and due under the S-CHIP provisions.  Some experts believe the RYO industry’s future is questionable and do not foresee many current companies surviving this onslaught of record high tax legislation.   RYO consumers are up in smoke about this and looking for cheaper alternatives while breaking their piggy banks, trying to stock up before the March 30th deadline.  It’s ironic that one of the resources the less fortunate are using to cope with the economic downturn is evidently being put to rest.  Legitimate US businesses are being destroyed to help support the healthcare of children of fairly well-to-do families, some of whom earn over $80,000.00 annually and even those of illegal aliens.

When asked how this will affect smoking behaviors, some RYO consumers relayed that their seeds are already ordered and plan on growing their own tobaccos.  A new hobby might spring for some, but land, skill and time constraints will make this a select few.   While GYO, or Grow Your Own, the smallest and most intensive of the tobacco hobbies, might work for the luckiest and most proficient, few RYOers have the resources nor space available for growing to be a real alternative.

Big Tobacco might expect an increase in market share when frustrated hobbyists and those who can afford to,  turn back to commercially manufactured cigarettes.   While the RYO consumer experienced a record breaking increase in federal tax, commercial cigarettes, pipes, cigars, chew and even snuff tobacco users  experienced only a curiously modest increase.   Insiders claim the cigar lobby threw RYO under the bus but many enthusiasts blame Big Tobacco itself.  Whichever the case, those who cannot afford to pay double or more in retail costs; smokers on fixed income, unemployed, out of work, handicapped, retired and otherwise broke smokers might need to finally give the old habit the boot.   For many of these people however, the prohibitive costs of cessation aids will make quitting an arduous, long and uncomfortable process.

Chart illustrating the inequities of the new S-CHIP bill as it’s applied to various tobacco products. Some experts say the current revision of the S-CHIP bill will likely destroy the RYO industry in the US and leave the poorest class of tobacco users in the cold. Ironic that the bill heralded to fund children’s healthcare for Americans earning up to $83K per annum is being placed squarely on the shoulder’s of America’s poorest citizens.  As anyone can plainly see, these figures are a bit askew against RYO by about 2,000%!

SCHIP Tobacco Tax Rate Increases | RYO Revolution

The S-CHIP revision is by far the largest tax increase in written history on a single product.  A product that’s consumers happens to be a much maligned minority of late;  the smoker.  Tobacco tax is slated to go up across the board with cigars increasing at about 60 cents a stick, loose pipe tobacco up around $3 per lb and packaged cigarettes up the least at 60 cents a pack.   The RYO loose tobacco tax, or Roll-Your-Own cigarette loose tobacco increases from just over $1 per lb to a whopping $24 per lb!  This on the poorest of the poor and variously challenged smokers.  Cigarettes will be out of reach for the homeless, poverty stricken, laid off, retired and mentally ill across the nation.  A pack of home-mades will shoot to brand name levels regardless of  the time, equipment and efforts expended by these do-it-yourselfers.  The RYO market generates less than one half of one percent (0.5%) of the of the total tobacco revenues accrued in the US each year.  The brunt of the tax being placed on the shoulders of the destitute, unemployed, misfit, handicapped, injured, laid off and retired is obscene.  In the end, the tax on the final product will constitute  80% of the retail cost!   That’s no misprint neither, no single product in the history of the United States has been taxed anywhere close to this.   One would be hard pressed to find any taxation equivalent in the entire history of the civilized world.

A segment in RYO also exists that do keep up with the Jone’s and smoke RYO for reasons other than economics.  This group chooses an all natural,  100% tobacco product as opposed to the 50% common to the prepackaged cigarette industry.  These RYOers don’t want the additional, unknown long term health implications caused by the chemical cocktail called a cigarette in the commercial cigarette industry.   They also don’t care for the forced ingestion of the unknown toxins replete in  the FSC* mandated packaged cigarette papers.   When much of the RYO industry is forced to close doors due to the overwhelming tax increases, not only will it’s patrons suffer a smaller selection but risk losing their choice in it’s entirety.   This will likely end up legislating an entire class to return to a product no longer fit for human consumption.

The RYO industry itself is being put in jeopardy in a two step manner.  The increased price of tobacco will cause much of the allure of roll-it-yourself to disintegrate losing both it’s veterans and significantly decreasing any new customer base.   The final killer to many of the retailers is the Floor tax where the tax of $24.78 per lb on any existing stock as of 04/01/09 becomes immediately due. This Floor Tax could well end up being the demise of the entire industry while Big Tobacco ironically gets it’s wish.  The RYO industry is a much different animal than the Big Players whose huge factories billow smoke 24/7 and suit and lab coat adorned staff conducting experiments within.  In RYO there’s the farmers for supply, small businesses all along the line for distribution, packaging and redistribution to Mom and Pop shops and neighborhood tobacconists for final sale.  All down the line jobs will be lost and compromised with thousand losing work and savings,  risking their families well being and future.   Big Tobacco will come out nicely with a modest price increase and a drove of ex-RYOers falling back into line to buy their chemical laden, fire safe doses once again.

Exactly what the government is thinking is perplexing at first glance.  The smallest and weakest effectively being killed off by our government who will then ironically bolster the most checkered industry in the US,  operating lawfully by a slim and questionable margin.  The real affront is to the sick, unemployed, laid off and retired who will no longer be able to afford one of the few luxuries they still endear.  Many do not realize that tobacco is not just a simple luxury  but a necessity in which once-naive youngsters, fell victim to an immorally marketed yet legal addiction they either cannot or will not break.  The fact that these self righteous take comfort in a victory targeted at the poorest and the weakest while those who can afford the extra 60 cent spanking might even share in the benefits is testament in itself.

Impressive and sometimes accidental advances in agriculture and curing enabled the development of tobaccos particularly suited to cigarette smoking.   The most influential being the legendary development of Bright Leaf or “yaller” tobacco by a snoozing slave who discovered the fortunate reaction that led to this most delicious advance in curing to date.   One chilly young man’s desire to stay warm and a near disastrous super heating of the curing shed made for the near perfect smoke sweet enough even for the ladies that  sparked worldwide demand.  Cigarette popularity was increasing exponentially by the year only decades after birth.

The civil war saw the advent of the peculiar taxation schemes on tobacco products that thrives to this day.  By this time, the cigarette industry was already a multi million dollar industry and the legislators took full advantage quickly.  Tobacco in general and cigarettes in particular boasted ever growing sales despite economic trends that inspired a plethora of creative tax schemes.  Not quite the bloated schedules commanded routinely nowadays but the onset of creative tobacco taxes took root early on making the bastardization of fair taxes on tobacco usual and customary.