The Cigar Nation

Don't Give Up The Fight!!

STOP A 20,000% Tax Increase on Cigars

The U.S. Senate will shortly vote on a proposal to expand the state children's health insurance program by $35 billion. Funding is to be provided solely through higher tobacco taxes. The tax increases on cigars are particularly punitive, as all large cigars would be subject to a tax of 53.13% of the manufacturer's selling price. This is an increase of 156.4% over the current rate! While the current tax on cigars is capped so that no cigar is taxed more than $0.05 in federal tobacco tax, the proposed legislation would increase the cap by 20,413% (not a typo) to $10 per cigar! The combination of these two factors will result in a dramatic increase in cigar prices in the U.S. and many cigar companies are likely to go out of business.

The Heritage Foundation states in its July 11th editorial:
-A tobacco tax disproportionately burdens low-income Americans, lacks long-term stability, and ultimately results in significant shifting of health care costs onto others.

-With the number of smokers already declining, a tobacco tax would further reduce the number of smokers, thereby eroding the funding source.

-To produce the revenues that Congress needs to fund SCHIP expansion through such a tax would require 22.4 million new smokers by 2017.

-Current plans to fund SCHIP expansions with an increase in the tobacco tax would move more Americans further away from stable, affordable coverage.

We urge you to phone the offices of your own U.S. Senators (see previous post), give them your name and address, and ask that they vote to oppose the punitively high cigar tax increase in the state children's health insurance legislation. Use the link on a previous post to find your senators.

posted by Josh @ 8:41 PM