Labeling and design changes let industries evade targeted regulations

Evidence

Language can also be used to circumvent regulations. For example, pipe tobacco and cigars are taxed at a much lower rate than cigarettes. In circumventive ingenuity, to avoid the higher tax some tobacco companies relabeled tobacco used to roll one’s own cigarettes as pipe tobacco (Rabin, 2012). By altering the size of a cigarette product and relabeling it, the industry was able to get around additional taxes and regulations. Cigarettes in the form of small cigars are also taxed at a lower rate. Additionally, the U.S. Food and Drug Administration had banned fruit flavors in cigarettes, which had been added to lure youngsters to smoking, but the ban does not cover pipe tobacco or cigars. Linguistic and design maneuvers enabled companies to evade both cigarette taxes and flavor bans. Regulators usually find themselves playing catch-up because, for every solution they come up with, those being regulated will find a loophole. — Albert Bandura, Moral Disengagement, 1653 (#exemplifies, via linked claim)

Volcker’s second requirement is a key feature of an effective regulatory system: personal accountability for unlawful corporate practices. It shifts the major responsibility for adherence to the law from regulators to the officials managing the firms. Volcker also wanted vigilant regulators: “And I’d have strong regulators. If the banks didn’t comply with the spirit of the bill, they’d go after them.” The former senator Ted Kaufman, now a professor at Duke University School of Law, describes how adding exemptions to the rule opened a Pandora’s box of rules covering 300 pages: “Here’s the key word in rules: ‘exemption.’ … [A]s soon as you see that, it’s pronounced ‘loophole’” (Stewart, 2011). — Albert Bandura, Moral Disengagement, 1536 (#complicates, via linked claim)

Categorization

• XREF: connects to: Euphemistic labeling lets industries obscure the harm they do — Albert Bandura, Moral Disengagement: How People Do Harm…, 839; Categorization and renaming alone let regulated industries evade taxes and bans — Albert Bandura, Moral Disengagement: How People Do Harm…, 1653; Industry-favoring regulatory rollbacks are disguised with benign-sounding titles — Albert Bandura, Moral Disengagement: How People Do Harm…, 1590 (+2 more)

Broader Connections

• Categorization and renaming alone let regulated industries evade taxes and bans #exemplifies (0.92) — Albert Bandura, Moral Disengagement, 1653
• Regulatory exemptions function as exploitable loopholes undermining enforcement #complicates (0.72) — Albert Bandura, Moral Disengagement, 1536