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.
Episode 31
It's in the bag, it's saved and being edited right now. It's a long one so make sure you've got a nice double corona to light up. There's a lot of talk about libations so get ready to do some drinking!!!
Contacts
Here is a link to the contact information for your senators. Please call them and let them know that the SCHIP tax proposal of raising the tax on your cigar by as much as 20,000%, that's right, 20,000%.
CONTACT THEM, IMMEDIATELY
Liquor Questions
For the show we'll be recording this Thursday night we'll be having a guy who works for a liquor distributor and has his own liquor consulting business on the show. Please post any questions you have about scotch, tequila, run or liquor (no beer questions) for him in the comments and we'll try to get to them during the show!
A Message From Lew Rothman (Owner of J.R. Cigars)
Everyone and I mean everyone that even smokes a cigar now and then has to be on alert for messages from all B&M smokeshops AND Internet vendors AND Manufacturers in the next few days regarding the proposed new tax on tobaacco products:
“The Senate Finance Committee has scheduled a markup on Tuesday, July 17 on legislation dealing with the State Children's Health Insurance Program (SCHIP). The measure is expected to be reported out of committee. Funding would be almost totally via higher taxes on tobacco products. The cigarette tax will increase by $.61 to $1 per pack effective after December 31, 2007. Other tobacco products would be taxed as follows: large cigars -- 53.13% of mfr's or importer's sales price but not more than $10.00 per cigar.”
In addition, there will be a floor stocks tax on tobacco products manufactured in the U.S. or imported into the U.S, which are removed before January 1, 2008 and held on that date for sale. The person holding the product on January 1, 2008 is liable for the tax to be paid on or before April 1, 2008.
YES ! You read that right ! $10.00 PER CIGAR, plus whatever your local state tax is. The people in Washington have absolutely no clue about the cigar business. Their sole focus is on cigarettes and we are about to get dragged along with it.
Not only will this put virtually every manufacturer, wholesaler, and retaailer out of business. It will also devastate the economy of Nicaragua, Honduras, The Dominican Republic and have a significant impact on Puerto Rico, Indonesia, Costa Rica, Panama, Brasil, and Peru. (Whereupon, I’m sure the USA will be called upon to provide additional relief funding !).
You and everyone else who has any thoughts about continuing to smoke cigars or grow, sort, manufacture, distribute or retail cigars need to make a concerted phone, mail, and e-mail bombardment of Congress very shortly. Hopefully, someone more adept at interpreting this new tax law will supply the proper language for this protest.
Be ready and be vocal, and be outraged because this tax is definitely outrageous. It is my firm belief that if passed as it stands right now the entire industry will collapse prior to April 1,2008 (appropriately named April Fools Day for the Fools we have running the government right now) because no one will have the finances to pay the tax on their inventory.
