This is no joke, my friends. Today in Washington, our leaders are possibly (and probably unknowingly) sowing the seeds of our industry's demise.
In an effort to fund SCHIP (State Children's Health Insurance Program) almost solely from tobacco taxes, the Senators are proposing dramatic increases and new ceilings on all tobacco taxes including a 53.13% tax on cigars with a new cap of $10 (from a previous cap of $.05)!
Realizing that state taxes are on top of federal taxes, by adding the proposed federal tax to the wholesale price of a cigar, with a $10 cap (gee, thanks), the Senate is potentially pricing most of our products out of the reach of most consumers. This tax will suddenly make a reasonably priced $6 cigar jump to over $9 -- even before the state tax!!! To boot, the proposal includes a FLOOR TAX to go into effect January 1 of 2008 on all existing stock! Talk about a big nut to crack come April 1, 2008 - the day we'd have to pay up!
Still, this proposal is just that, a proposal, and I have confidence in basic common sense. We have time to spread the word and to recruit our customer-base to influence our Senators. EVERYONE, and I mean EVERYONE, must write a letter and be heard. We cannot depend on others for the protection of our livelihood
- we must take a role and be counted.
