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<channel>
	<title>Jacob Grier -- Liquidity Preference</title>
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	<link>http://www.jacobgrier.com/blog</link>
	<description>Coffee, Cocktails and Commentary</description>
	<lastBuildDate>Thu, 23 May 2013 17:10:56 +0000</lastBuildDate>
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		<title>Cato podcast on FDA tobacco regulation</title>
		<link>http://www.jacobgrier.com/blog/archives/6047.html</link>
		<comments>http://www.jacobgrier.com/blog/archives/6047.html#comments</comments>
		<pubDate>Thu, 23 May 2013 17:10:56 +0000</pubDate>
		<dc:creator>Jacob Grier</dc:creator>
				<category><![CDATA[Nanny State]]></category>
		<category><![CDATA[Regulation]]></category>
		<category><![CDATA[FDA]]></category>
		<category><![CDATA[tobacco]]></category>

		<guid isPermaLink="false">http://www.jacobgrier.com/blog/?p=6047</guid>
		<description><![CDATA[While in DC this week I recorded a couple podcasts. Here&#8217;s the first, with the Cato Institute&#8217;s Caleb Brown. In it we cover FDA regulation of cigarettes, e-cigarettes, and cigars. One minor correction: We were only discussing these inhalable products, so I misspoke when saying that current FDA regulations only cover cigarettes. The agency regulates [...]]]></description>
			<content:encoded><![CDATA[<p><iframe src="http://www.cato.org/longtail-iframe/node/46459/field_longtail_player/0" width="500" height="281" frameborder="0" allowfullscreen webkitallowfullscreen mozallowfullscreen></iframe></p>
<p>While in DC this week I recorded a couple podcasts. <a href="http://www.cato.org/multimedia/daily-podcast/fda-rules-tobacco">Here&#8217;s the first, with the Cato Institute&#8217;s Caleb Brown</a>. In it we cover FDA regulation of cigarettes, e-cigarettes, and cigars.</p>
<p>One minor correction: We were only discussing these inhalable products, so I misspoke when saying that current FDA regulations only cover cigarettes. The agency regulates smokeless tobacco too.</p>
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		<title>Links for 5/10/13</title>
		<link>http://www.jacobgrier.com/blog/archives/6044.html</link>
		<comments>http://www.jacobgrier.com/blog/archives/6044.html#comments</comments>
		<pubDate>Fri, 10 May 2013 21:23:17 +0000</pubDate>
		<dc:creator>Jacob Grier</dc:creator>
				<category><![CDATA[Alcoholic Beverages]]></category>
		<category><![CDATA[Cocktails]]></category>
		<category><![CDATA[Food and Drink]]></category>
		<category><![CDATA[On the Web]]></category>

		<guid isPermaLink="false">http://www.jacobgrier.com/blog/?p=6044</guid>
		<description><![CDATA[Cleared for Departure is one of our most popular cocktails at Metrovino, but I&#8217;ve been remiss in dedicating a post to it. The recipe is now up at the cocktail section of the site. Italy meets Texas with Pecaño, a pecan liqueur that appears to be inspired by the bittersweet liqueurs of Italy. As a [...]]]></description>
			<content:encoded><![CDATA[<p><a href="http://www.jacobgrier.com/cocktails/wp-content/uploads/2013/05/CFD.jpg"><img src="http://www.jacobgrier.com/cocktails/wp-content/uploads/2013/05/CFD.jpg" alt="" title="CFD" width="333" height="500" class="aligncenter size-full wp-image-306" /></a></p>
<p>Cleared for Departure is one of our most popular cocktails at Metrovino, but I&#8217;ve been remiss in dedicating a post to it. <a href="http://www.jacobgrier.com/cocktails/cleared-for-departure/">The recipe is now up at the cocktail section of the site</a>.</p>
<p>Italy meets Texas with Pecaño, a pecan liqueur that appears to be inspired by the bittersweet liqueurs of Italy. As a native Texas, this sounds very interesting to me. They <a href="http://www.kickstarter.com/projects/16112231/pecano-a-texas-pecan-liqueur">launched a Kickstarter today</a> to bring it into full scale production. </p>
<p>More than thirty years after federal legalization, homebrewing is now legal in all fifty states <a href="http://www.homebrewersassociation.org/pages/community/news/show?title=homebrewing-is-legal-in-alabama">thanks to Alabama finally coming on board</a>. Now on to home distillation!</p>
<p>Want to be a street performer in St. Louis? <a href="http://reason.com/blog/2013/05/09/mandatory-auditions-license-requirements">You&#8217;ll have to audition for the city first</a>.</p>
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		<title>Culture of Competition at AEI</title>
		<link>http://www.jacobgrier.com/blog/archives/6038.html</link>
		<comments>http://www.jacobgrier.com/blog/archives/6038.html#comments</comments>
		<pubDate>Wed, 08 May 2013 16:46:34 +0000</pubDate>
		<dc:creator>Jacob Grier</dc:creator>
				<category><![CDATA[Alcoholic Beverages]]></category>
		<category><![CDATA[DC]]></category>
		<category><![CDATA[Food and Drink]]></category>
		<category><![CDATA[Regulation]]></category>

		<guid isPermaLink="false">http://www.jacobgrier.com/blog/?p=6038</guid>
		<description><![CDATA[I&#8217;m excited to head back to Washington, DC this month to be on a a panel discussion hosted by Tim Carney as part of the American Enterprise Institute&#8217;s Culture of Competition project. The details: Free beer: Liberating libations from ‘Bootleggers and Baptists’ For centuries, the manufacture and sale of beer, wine, and spirits has been [...]]]></description>
			<content:encoded><![CDATA[<p>I&#8217;m excited to head back to Washington, DC this month to be on a a panel discussion hosted by Tim Carney as part of the American Enterprise Institute&#8217;s Culture of Competition project. <a href="http://www.aei.org/events/2013/05/21/free-beer-liberating-libations-from-bootleggers-and-baptists/">The details</a>:</p>
<blockquote><p><strong>Free beer: Liberating libations from ‘Bootleggers and Baptists’</strong></p>
<p>For centuries, the manufacture and sale of beer, wine, and spirits has been a highly profitable and highly regulated enterprise. And where profit and regulation meet, cronyism and rent-seeking frequently follow.</p>
<p>From moonshiners buying off politicians during the Prohibition era to liquor stores trying to ban supermarkets from selling beer today, regulation has been used to keep start-up brewers, winemakers, and distillers from manufacturing alcohol; to preserve inefficient distribution systems; and to restrict choices available to consumers. Frequently, this regulation has been used for “noble social goals” — hence the famous public choice example of &#8220;Bootleggers and Baptists.&#8221;</p>
<p>Can markets and consumers win? Join us for a discussion of the history and future of federal and state alcohol regulation and competition, followed by a reception with beer, wine, and spirits.</p></blockquote>
<p>The event takes place at 5:00 pm on Tuesday, May 21. Drinks will follow. Check the site for all the necessary information.</p>
<p>And since I know a lot people in the industry read this site, I&#8217;d love to get your feedback as well. How do existing regulations help or hinder competition? What laws would you most like to see changed? Feel free to leave a comment or <a href="http://www.jacobgrier.com/blog/about-this-site">send me an email</a>.</p>
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		<title>Tobacco news roundup</title>
		<link>http://www.jacobgrier.com/blog/archives/6031.html</link>
		<comments>http://www.jacobgrier.com/blog/archives/6031.html#comments</comments>
		<pubDate>Thu, 25 Apr 2013 19:33:14 +0000</pubDate>
		<dc:creator>Jacob Grier</dc:creator>
				<category><![CDATA[Nanny State]]></category>
		<category><![CDATA[Regulation]]></category>
		<category><![CDATA[FDA]]></category>

		<guid isPermaLink="false">http://www.jacobgrier.com/blog/?p=6031</guid>
		<description><![CDATA[New FDA Center for Tobacco Products director Mitch Zeller tells Bloomberg to expect action from the agency soon and that he seeks to craft a &#8220;comprehensive nicotine policy.&#8221; What could that mean? Unmentioned in the article are Zeller&#8217;s ties to producers of pharmaceutical nicotine replacement products or his interest in reducing nicotine levels in cigarettes [...]]]></description>
			<content:encoded><![CDATA[<p>New FDA Center for Tobacco Products director Mitch Zeller tells Bloomberg <a href="http://www.bloomberg.com/news/2013-04-24/new-tobacco-chief-promises-u-s-action-as-industry-waits.html">to expect action from the agency soon</a> and that he seeks to craft a &#8220;comprehensive nicotine policy.&#8221; What could that mean? Unmentioned in the article are Zeller&#8217;s <a href="http://www.jacobgrier.com/blog/archives/5989.html">ties to producers of pharmaceutical nicotine replacement products</a> or his interest in reducing nicotine levels in cigarettes to near zero, a proposal he brings up <a href="http://tobaccocontrol.bmj.com/content/22/suppl_1/i40.full">in the most recent issue of <em>Tobacco Control</em></a>.</p>
<p>My friends the Stogie Guys have a couple recent posts that are worth reading. In the first, they explain how <a href="http://www.stogieguys.com/2013/04/04182013-commentary-which-side-is-big-tobacco-on-not-ours.html">Big Tobacco has become the enemy of small, premium tobacco</a> through its lobbying efforts. In the second, they examine what a new bill requiring online merchants to collect sales taxes <a href="http://www.stogieguys.com/2013/04/04232013-news-internet-sales-tax-bill-poised-to-hit-cigars.html">may mean for the cigar industry</a>.</p>
<p>Hestia Tobacco, the brand whose struggle to navigate the FDA&#8217;s approval process <a href="http://www.theatlantic.com/health/archive/2013/03/how-the-fda-is-keeping-new-cigarettes-off-the-market/273679/">I documented for <em>The Atlantic</em></a>, is finally in business. Not selling cigarettes, of course, but rather filtered little cigars. Sale of their cigarettes must await greater competence at the agency. If the product interests you, <a href="http://hestiatobacco.com/">go check them out</a>.</p>
<p>Christine Quinn, a leader in polls to replace Bloomberg as New York City&#8217;s next mayor, appears to have embraced Bloomberg&#8217;s nannying legacy. She has proposed raising the legal age to purchase cigarettes within the city to 21. <a href="http://reason.com/blog/2013/04/22/nyc-considers-hiking-cigarette-age-in-ap">As J. D. Tuccille notes at Reason</a>, this would be good news for black market sellers, who already claim more than 60% of the state&#8217;s cigarette market.</p>
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		<title>Mixology Monday: East Indies Bloody Mary</title>
		<link>http://www.jacobgrier.com/blog/archives/6025.html</link>
		<comments>http://www.jacobgrier.com/blog/archives/6025.html#comments</comments>
		<pubDate>Mon, 22 Apr 2013 22:48:52 +0000</pubDate>
		<dc:creator>Jacob Grier</dc:creator>
				<category><![CDATA[Alcoholic Beverages]]></category>
		<category><![CDATA[Cocktails]]></category>
		<category><![CDATA[Food and Drink]]></category>
		<category><![CDATA[Batavia-Arrack]]></category>
		<category><![CDATA[MxMo]]></category>

		<guid isPermaLink="false">http://www.jacobgrier.com/blog/?p=6025</guid>
		<description><![CDATA[April&#8217;s Mixology Monday theme is the deceptively healthy sounding &#8220;Drink Your Vegetables.&#8221; From Rowen at Fogged in Lounge: Want to get more vegetables but you’re always eating on the run?… Well then, how about a vegetable cocktail? No, not that nice little glass of red stuff Grandma put at each place setting—we’re talking something with [...]]]></description>
			<content:encoded><![CDATA[<p><a href="http://www.flickr.com/photos/saucesupreme/7392042964/" title="East Indies Bloody Mary by Ron Dollete, on Flickr"><img src="http://farm6.staticflickr.com/5199/7392042964_059a292e78.jpg" width="500" height="333" alt="East Indies Bloody Mary"/></a></p>
<p>April&#8217;s <a href="http://mixologymonday.com/">Mixology Monday</a> theme is the deceptively healthy sounding &#8220;Drink Your Vegetables.&#8221; From Rowen at <a href="http://foggedinlounge.blogspot.com/2013/04/mixology-monday-announcement.html">Fogged in Lounge</a>:</p>
<blockquote><p>Want to get more vegetables but you’re always eating on the run?… Well then, how about a vegetable cocktail? No, not that nice little glass of red stuff Grandma put at each place setting—we’re talking something with a kick in it. You can definitely start with the little glass of red stuff and expand it to a Red Snapper-style drink like a Bloody Mary. Or how about a cucumber-scented cooler like a Pimm’s Cup, or maybe a cocktail featuring a vegetable-based ingredient like Cardamaro or celery bitters? Maybe you’ve been wondering if you can get more mileage out of that juice extractor before consigning it to the garage sale. However you get them in that glass, be prepared for the most fun with vegetables ever.</p></blockquote>
<p>A while back I was tasked with coming up with a creative take on the Bloody Mary. In a town with as many brunches and savvy bartenders as Portland, coming up with something unique and tasty was a challenge; here even the Aquavit Bloody Mary can seem routine. After quite a bit of experimentation with different spirits and spices, I eventually settled on one made with <a href="http://en.wikipedia.org/wiki/Arrack#Indonesia">Batavia arrack</a> &#8212; a funky, assertive spirit distilled from sugar cane and red rice &#8212; and accented with a spice paste inspired by Indonesian cuisine. To top it all off, the cocktail is garnished with house made pickles and a spicy grilled prawn.</p>
<p>I&#8217;ve been meaning to post this recipe for a while, so I&#8217;m glad to finally have the opportunity. To make it you&#8217;ll need a <a href="http://www.jacobgrier.com/cocktails/bloody-mary-mix/">basic Bloody Mary mix</a>, the spice paste, and Batavia arrack.</p>
<p>For the spice paste:</p>
<blockquote><p>4 tablespoons sambal oelek<br />
2 tablespoons fish sauce<br />
1/2 teaspoon ground nutmeg<br />
1/2 teaspoon ground turmeric<br />
1/2 teaspoon ground cumin</p></blockquote>
<p>Combine all ingredients and mix well.</p>
<p>For the East Indies Bloody Mary:</p>
<blockquote><p>1 1/2 oz Batavia arrack<br />
4 oz Bloody Mary mix<br />
2 teaspoons Indonesian spice paste<br />
cumin salt rim, for garnish<br />
pickles, for garnish<br />
grilled prawn, for garnish</p></blockquote>
<p>Combine all ingredients, shake with ice, and strain (but don&#8217;t fine strain) into an ice-filled pint glass rimmed with a mixture of salt and ground cumin. Go crazy with the garnishes. A grilled prawn flavored with turmeric and other spices is a good touch. When we served this we pickled various vegetables such as long beans, green beans, lotus root, daikon, and cucumber in the brine from the Indian-style pickled cauliflower recipe in <em><a href="http://www.amazon.com/exec/obidos/ASIN/1558323759/eternalrecurr-20/">The Joy of Pickling</a></em>.</p>
<p>Coming up on my to-do list: Trying this spice paste on grilled meat. In the meantime, drink up.</p>
<p>[Photo courtesy of <a href="http://lushangeles.com/">Lush Angeles</a>.]</p>
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		<title>An appreciation of pipe tobacco</title>
		<link>http://www.jacobgrier.com/blog/archives/6022.html</link>
		<comments>http://www.jacobgrier.com/blog/archives/6022.html#comments</comments>
		<pubDate>Wed, 17 Apr 2013 18:17:17 +0000</pubDate>
		<dc:creator>Jacob Grier</dc:creator>
				<category><![CDATA[Food and Drink]]></category>

		<guid isPermaLink="false">http://www.jacobgrier.com/blog/?p=6022</guid>
		<description><![CDATA[Writer Wil S. Hylton has a fantastic appreciation of pipe tobacco published last week in, of all places, The New York Times Magazine. Wil tells the story of coming across an obscure variety called Semois and tracking it to its source in Belgium, adding one more item to the long list of reasons I need [...]]]></description>
			<content:encoded><![CDATA[<p>Writer Wil S. Hylton has a fantastic appreciation of pipe tobacco published last week in, of all places, <em>The New York Times Magazine</em>. Wil tells the story of coming across an obscure variety called Semois and tracking it to its source in Belgium, adding one more item to the long list of reasons I need to visit the country. Unlike so many food and drink writers, Wil gets that tobacco deserves a spot at the culinary table. I love this passage:</p>
<blockquote><p>I was struck by how unfamiliar the scene would have been to my American friends who have, in a fashion typical of our generation, embraced the current culinary boom with maniacal fervor, boiling obscure reductions to drip onto bits of fruit exploded by bicycle pumps in homage to Ferran Adrià, and yet, despite this globe-trotting gustatory zeal, haven’t the slightest comprehension of the exquisite flavor that haunts tobacco. If the modern mythos of the kitchen had arrived a decade earlier, before the vilification of tobacco was complete, the pipe might occupy a place on the palate alongside argan oil and hijiki and yuzu. Somewhere in the multiverse, there is an alternate New York City where the Union Square farmers’ market brims not just with heirloom melons and leeks and squash but also with local tobaccos as vibrant as the Cherokee purple tomato. There is a literature still waiting to be written on fine tobacco; tobacco awaits its Julia Child — who, it should be said, loved to smoke, as so many other chefs have and do. It is axiomatic these days that smoking ruins the palate, but this would come as news to Thomas Keller, Anthony Bourdain and all the other celebrated chefs who enjoy a good smoke.</p></blockquote>
<p><a href="http://www.nytimes.com/2013/04/14/magazine/tobacco-thats-so-brooklyn-but-made-in-belgium.html?pagewanted=all&#038;_r=1&#038;">Read the whole thing</a>.</p>
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		<title>Tobacco tax skepticism</title>
		<link>http://www.jacobgrier.com/blog/archives/6019.html</link>
		<comments>http://www.jacobgrier.com/blog/archives/6019.html#comments</comments>
		<pubDate>Tue, 16 Apr 2013 16:18:16 +0000</pubDate>
		<dc:creator>Jacob Grier</dc:creator>
				<category><![CDATA[Economics]]></category>
		<category><![CDATA[Nanny State]]></category>
		<category><![CDATA[Politics]]></category>
		<category><![CDATA[Regulation]]></category>
		<category><![CDATA[Writing]]></category>
		<category><![CDATA[taxes]]></category>
		<category><![CDATA[tobacco]]></category>

		<guid isPermaLink="false">http://www.jacobgrier.com/blog/?p=6019</guid>
		<description><![CDATA[My latest article for The Atlantic provides four reasons to oppose the new tobacco taxes proposed in the White House budget.]]></description>
			<content:encoded><![CDATA[<p>My latest article for <em>The Atlantic</em> provides <a href="http://www.theatlantic.com/politics/archive/2013/04/4-reasons-obamas-plan-to-raise-tobacco-taxes-is-a-bad-idea/274999/">four reasons to oppose the new tobacco taxes</a> proposed in the White House budget.</p>
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		<title>DC wants to ban e-cigs in bars</title>
		<link>http://www.jacobgrier.com/blog/archives/6016.html</link>
		<comments>http://www.jacobgrier.com/blog/archives/6016.html#comments</comments>
		<pubDate>Fri, 12 Apr 2013 18:44:24 +0000</pubDate>
		<dc:creator>Jacob Grier</dc:creator>
				<category><![CDATA[DC]]></category>
		<category><![CDATA[Nanny State]]></category>
		<category><![CDATA[Smoking Bans]]></category>

		<guid isPermaLink="false">http://www.jacobgrier.com/blog/?p=6016</guid>
		<description><![CDATA[People in DC bars are &#8220;vaping,&#8221; or using electronic cigarettes, indoors. A couple members of the DC city council &#8212; Yvette M. Alexander and David Grosso &#8212; have introduced a bill to include e-cigarettes in the city&#8217;s smoking ban: In an interview, Alexander said e-cigarettes are being &#8220;used to usurp the smoking ban.&#8221; &#8220;It is [...]]]></description>
			<content:encoded><![CDATA[<p>People in DC bars are &#8220;vaping,&#8221; or using electronic cigarettes, indoors. A couple members of the DC city council &#8212; Yvette M. Alexander and David Grosso &#8212; <a href="http://www.washingtonpost.com/local/dc-politics/should-e-cigs-be-banned-indoors-in-dc/2013/04/09/19ae0a2e-a14d-11e2-82bc-511538ae90a4_story.html">have introduced a bill to include e-cigarettes in the city&#8217;s smoking ban</a>:</p>
<blockquote><p>In an interview, Alexander said e-cigarettes are being &#8220;used to usurp the smoking ban.&#8221;</p>
<p>&#8220;It is smoking, is an inhalant and it’s similar to smoking,&#8221; said Alexander, chairwoman of the Health Committee. &#8220;We don’t know what the ill effects of this are, and it’s still a bother to some people.&#8221;</p></blockquote>
<p>&#8220;Similar to smoking&#8221; and &#8220;a bother.&#8221; Time was city officials at least made a show of finding evidence of harm before imposing bans. E-cigarettes may be annoying to other patrons, but there&#8217;s no evidence or reason to believe that secondhand vapor (is that a thing now?) is something to fear. And to point out the obvious, bar and restaurant owners are perfectly free to set their own policies if guests prefer to avoid it.</p>
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		<title>What I&#8217;ve been drinking</title>
		<link>http://www.jacobgrier.com/blog/archives/6002.html</link>
		<comments>http://www.jacobgrier.com/blog/archives/6002.html#comments</comments>
		<pubDate>Wed, 10 Apr 2013 01:40:50 +0000</pubDate>
		<dc:creator>Jacob Grier</dc:creator>
				<category><![CDATA[Alcoholic Beverages]]></category>
		<category><![CDATA[Food and Drink]]></category>

		<guid isPermaLink="false">http://www.jacobgrier.com/blog/?p=6002</guid>
		<description><![CDATA[Unexpected travel has made me a bit delayed reviewing spirits. Here are some recent arrivals to the home bar: South Sea Rum &#8212; This is an &#8220;agricole&#8221; style rum distilled in Australia from first-pressed sugar cane. It goes through pot and column stills before resting for two years in old and new American oak. How [...]]]></description>
			<content:encoded><![CDATA[<p>Unexpected travel has made me a bit delayed reviewing spirits. Here are some recent arrivals to the home bar:</p>
<p><strong>South Sea Rum</strong> &#8212; This is an &#8220;agricole&#8221; style rum distilled in Australia from first-pressed sugar cane. It goes through pot and column stills before resting for two years in old and new American oak. How to review it? Taken as an agricole rum, it doesn&#8217;t have nearly as much <a href="http://www.esquire.com/features/drinking/best-new-caribbean-rums-0910">hogo</a>, or distinctive funk, as counterparts from, say, Martinique. It is a very tasty rum though, with nice vanilla notes from the barrel and a long finish. I&#8217;ve gone through about half a bottle already, mostly drinking it neat. At $30-35 the price is right too.</p>
<p><strong>Zumwohl Kirsch</strong> &#8212; It&#8217;s a dry, German style schnapps. It&#8217;s from New Zealand. And, oh yeah, it&#8217;s 132 proof. Sipping this neat is not for everyone, but if you try it you will taste cherries along with dark chocolate and a bit of a medicinal note. A more user friendly way to pour it is in a <a href="http://www.jacobgrier.com/cocktails/straits-sling/">Straits Sling</a>, where it fits perfectly. It&#8217;s not available in the US, so bug your Kiwi friends to send you a bottle.</p>
<p><strong>Elixer Combier</strong> &#8212; According to the <a href="http://www.combierusa.com/">Combier website</a>, this is a revival of one of their 19th century recipes, an herbal liqueur that includes &#8220;aloe, nutmeg, myrrh, cardamom, cinnamon and saffron&#8221; among its ingredients. At 76 proof it has enough heat to be enjoyed on its own without being too sweet. It&#8217;s very complex and I&#8217;m sure it could do great things in the right cocktail. But which cocktail? I haven&#8217;t figured that out yet, but I will be sure to experiment.</p>
<p><strong>Concannon Irish Whiskey</strong> &#8212; For a spirits writer, March is the month when samples of Irish whiskey arrive. One year <a href="http://mylifeontherocks.com/">Lance Mayhew</a> and I tasted nearly thirty versions of the spirit, a feat of endurance from which I&#8217;m still recovering. This year I tried just one new bottling, Concannon. Distilled by Cooley, it spends time in a mix of bourbon barrels and wine barrels from the Concannon Winery in Livermore, California. I picked up a slightly fruity note when tasting, which it turns out is also what the press release says the wine barrel finish provides. Like most Irish whiskeys it&#8217;s light bodied and easy drinking. </p>
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		<title>New taxes on pipes and cigars?</title>
		<link>http://www.jacobgrier.com/blog/archives/5997.html</link>
		<comments>http://www.jacobgrier.com/blog/archives/5997.html#comments</comments>
		<pubDate>Mon, 08 Apr 2013 18:10:06 +0000</pubDate>
		<dc:creator>Jacob Grier</dc:creator>
				<category><![CDATA[Economics]]></category>
		<category><![CDATA[Nanny State]]></category>
		<category><![CDATA[Regulation]]></category>
		<category><![CDATA[taxes]]></category>
		<category><![CDATA[tobacco]]></category>

		<guid isPermaLink="false">http://www.jacobgrier.com/blog/?p=5997</guid>
		<description><![CDATA[According to Bloomberg, President Obama will be proposing new tobacco taxes to fund pre-kindergarten programs: Obama’s 2014 budget proposal, to be released April 10, would finance a pre-kindergarten program for 4-year-olds with higher taxes on cigarettes and other tobacco products. The president outlined the program in his annual State of the Union speech to Congress. [...]]]></description>
			<content:encoded><![CDATA[<p>According to Bloomberg, President Obama will be <a href="http://www.bloomberg.com/news/2013-04-05/obama-tobacco-tax-for-pre-kindergarten-draws-opposition.html">proposing new tobacco taxes to fund pre-kindergarten programs</a>:</p>
<blockquote><p>Obama’s 2014 budget proposal, to be released April 10, would finance a pre-kindergarten program for 4-year-olds with higher taxes on cigarettes and other tobacco products. The president outlined the program in his annual State of the Union speech to Congress. He’s seeking to increase spending in areas such as education while Republican lawmakers are pushing for additional budget cuts as a way to reduce the federal deficit.</p>
<p>White House spokesman Jay Carney declined to elaborate on the proposed tobacco-tax increase. “Wait for specifics,” he told reporters at a briefing yesterday.</p></blockquote>
<p>Never mind for now that cigarette smokers already suffered a more than doubling of the federal tax in Obama&#8217;s first year in office. The &#8220;other tobacco products&#8221; part of this proposal is reason to worry for those who enjoy pipes and cigars.</p>
<p>The 2009 tobacco tax increases to fund the Children&#8217;s Health Insurance Program <a href="http://www.jacobgrier.com/blog/archives/5797.html">created some significant disparities among similar products</a>. Pipe tobacco was taxed at a far lower rate than roll-your-own (RYO). Large cigars sometimes get much more favorable treatment than small cigars. As a result, producers and consumers shifted to pipe tobacco instead of RYO and added just enough weight to small cigars to qualify as large. The distorting effects of these taxes were immediate and striking:</p>
<p><a href="http://www.jacobgrier.com/blog/wp-content/uploads/2012/12/CHIPRA.jpg"><img src="http://www.jacobgrier.com/blog/wp-content/uploads/2012/12/CHIPRA.jpg" alt="" title="CHIPRA" width="500" height="262" class="aligncenter size-full wp-image-5798" /></a></p>
<p>These changes are almost entirely a matter of legal classification. Actual consumption patterns haven&#8217;t changed in the way the chart suggests. Neither pipes nor premium cigars have enjoyed an explosion of new consumers as a result of these taxes.</p>
<p>Nonetheless, the government wants to fix this disparity. A report from the General Accounting Office, the source of the chart above (<a href="http://www.gao.gov/assets/600/590192.pdf">PDF</a>), estimates that in the first two years of new taxes these substitution effects may have cost the treasury up to $1.1 billion.</p>
<p>One way to fix the disparity would be to lower taxes on RYO and small cigars, but that&#8217;s not going to happen. So don&#8217;t be at all surprised if the proposal from the Obama Administration includes tax hikes on pipe tobacco and large cigars, imposing substantial new costs on consumers and retailers.</p>
<p>For more, read Michael Siegel&#8217;s <a href="http://tobaccoanalysis.blogspot.com/2013/04/president-obama-proposes-tying-pre.html">take on the tax proposal</a>. And for a longer explanation of how smoking bans, higher taxes, and FDA regulation threaten the premium cigar industry, see my <a href="http://www.theatlantic.com/health/archive/2012/12/the-case-against-a-smoke-free-america/266220/#">December article in <em>The Atlantic</em></a>.</p>
<p><strong>Update 4/10/13:</strong> Via <a href="http://www.facebook.com/IPCPR/posts/506146159433656?">International Premium Cigar and Pipe Retailers on Facebook</a>, this is apparently the language in the budget proposal:</p>
<blockquote><p>Increase tobacco taxes and index for inflation</p>
<p>Under current law, cigarettes are taxed at a rate of $50.33 per 1,000 cigarettes. This is equivalent to just under $1.01 per pack, or approximately $22.88 per pound of tobacco. Taxes on other tobacco products range from $0.5033 per pound for chewing tobacco to $24.78 per pound of roll your-own tobacco. </p>
<p>The Administration proposes to increase the tax on cigarettes to $97.65 per 1,000 cigarettes, or about $1.95 per pack, increase all other tobacco taxes by about the same proportion, and index the taxes for inflation after 2014. The Administration also proposes to clarify that roll-your-own tobacco includes any processed tobacco that is removed for delivery to anyone other than a manufacturer of tobacco products or exporter. The rate increases would be effective for articles held for sale or removed after December 31, 2013.</p></blockquote>
<p>As predicted, all loose tobacco would be treated equally, resulting in a huge tax increase for pipe smokers. Details on cigars are lacking, but it looks they would be hit too.</p>
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