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Stogie Commentary: Go SCHIP Yourself!

29 Jan 2008

A reader recently sent us a response he got from his senator, Barbara A. Mikulski of Maryland. He had written to express his concern and disappointment over the proposed approximate 20,000 percent tax increase on cigars.

Here is part of the response he received from Senator Mikulski:

cigar tax“I understand your concerns with the tax provisions in the recent version of the children’s health reauthorization legislation, which included a tax increase on large cigars to up to $10 per cigar. I agree that this would have placed an unfair burden on you or your business.

After reading your letter, I took action. I worked with my colleagues, in a bipartisan manner, and fought to drop the ceiling on large cigars from $10 to $3 per cigar. Though still an increase, I wanted you to know that I shared your concerns and acted accordingly.

You should know that I am extremely concerned for the over 12 million children without health insurance. I firmly believe that all children should have access to high quality, affordable health care and health insurance coverage.”

There are so many things wrong with this response, it is hard to know where to begin. First, Senator Mikulski (or, rather, her staff member who responds to constituent letters) includes a giant non sequitur by noting that she wants 12 million children to have health insurance through SCHIP.

Why do the massive costs of SCHIP have to be paid for by taxing an already heavily discriminated group like smokers? Or why it is a good idea to make health insurance funding dependent on people smoking? She never says. Nor does the Senator address the devastating effects that such a tax would have on the families of cigar factory workers in Central America.

But the biggest problem I have with this condescending letter is that it claims that she has addressed the “issue” by dropping the cap on the taxes from $10 to $3 – meaning that the tax increase will now be just 5,900 percent.

What she doesn’t mention is that her proposed tax rate lowers taxes for only the most expensive cigars, leaving taxes exactly the same for all cigars that usually retail for under approximately $8 – the vast majority of all cigars sold.

In short, this reply is the same political double-speak you’d expect from DC politicos: unresponsive and lacking in substance. An apt comparison would be telling someone that pleading not to be shot will result in only two bullets instead of six. Oh, thanks!

Just another reason why the cigar industry needs to get its act together and start doing a better job of fighting these unjust cigar taxes.

Patrick S

photo credit: Stogie Guys

6 Responses to “Stogie Commentary: Go SCHIP Yourself!”

  1. John Tuesday, January 29, 2008 at 6:06 am #

    Heaven help us all if a Dem. wins the White House. We'll all be taking overseas vacations just to smoke a few good stogies because you won't be able to here anymore.

  2. Eric D. Tuesday, January 29, 2008 at 6:54 am #

    Thanks for sharing that! I also got a response from Mikulski, but it was much more canned that that one. It went into the "its for the children" rant. What I want to know is this: if they believe children's health care is so important why would they rely on tobacco users to pay for such a crucial service. They also say on the other side of their mouth that this will help people quit smoking. Well then if they quit smoking there will be no money for children's health care! They don't realize the idiocy of their logic. If all the smokers were to quit, then what would they tax next? Beer, wine, coffee, candy? If they could put a tax on our thoughts they would do it. I agree with the above poster- God help us all…

  3. GeorgeH Tuesday, January 29, 2008 at 6:59 am #

    You are correct that the cigar industry MUST get its act together and come-up with a plan. I'm afraid that the next round of debate on SCHIP will have the cigar tax "floor" at $3 and bargain upwards from there rather than downwards. The pols will say "Hey, I did you a favor – at least it isn't $10 per cigar."

  4. Marshall Tuesday, January 29, 2008 at 9:16 am #

    Who could be against the SCHIP bill? After all, it was written in accordance with what is now the true American spirit: "Find a way for someone else to pay your expenses!" This country has been transformed from a land where you reap what you sow, to one where we all pay something for nothing so that we may all get something for nothing. That is the true nature of this bill, yet another tax-and-spend scheme, using the poor little children as political shields. What descent human could oppose a measure to assure their health?"

    Everyone just loves Santa Clause, except for those from whom he must steal in order to be able to give away so much, The SCHIP expansion bill is another instance of our government's attempts to remove financial responsibility from a broad class of people, and instead burden those who are powerless to refuse. Rather than have everyone, or at least those who have chosen to raise children, pay for their health care, Congress is still attempting to single out a minority which they believe will not be able to defend itself, those who manufacture, sell and consume tobacco.

    The unfair and illogical use of tobacco taxes to finance programs which are being touted as essential to such a large class of people, when coupled with attempts to actually discourage tobacco's consumption, is one of the poorest strategies this writer has ever encountered. Here is an example of a business depending for its survival on increased sales of a product, and spending an enormous advertising budget to convince customers they simply cannot live without it. When everyone involved ignores the manufacturer's repeated announcements that it intends to curtail or discontinue production of the product, for which there is no substitute, there can be nothing but disappointment. The customer, who hadn't even considered shopping elsewhere, is left with nothing but empty promises, and real frustration upon finding out that those who would have provided something are no longer in business, because the competition's claims were too good to be true.

    Congress would not even dare to consider financing a measure benefiting children with taxes on such things as baby food, diapers, children's clothing, juvenile furniture or toys. Even more outlandish would be the mere thought of doing away with dependents' tax exemptions to fund their health care and education. Never in a million years could we count on something that fair happening in the land of the free and the home of the brave!

  5. timothy fitzgerald Tuesday, January 29, 2008 at 5:42 pm #

    you hit it right on the head again with your opinion.i agree with you that the industry must get its act together. let me add wake the hell up fast and do something fast.

  6. Scott Friday, February 1, 2008 at 2:42 am #

    I'm going to take a contrarian view with this. If I were a cigar manufacturer or one of the tobacco giants, I would offer this compromise – willingly accept a reasonable tax on the product in exchange for a loosening of the draconian laws restricting its use. In other words, call Washington's bluff.

    First, it gives us – cigar smokers, manufacturers, growers, etc – the high moral ground. We can say that when it comes to children's health, we're open to compromise. Second, the economic argument is sound – God knows my fiancee and I smoked a lot more cigars when we had more places to smoke them (and while we're at it, we had awfully large bartabs too). Lastly, it's good PR. Let's be honest – this argument looks like rich cigar smokers vs. poor kids. There's NO WAY anyone is going to have sympathy for this side of the discussion, no matter how valid our arguments against the tax are. By offering something in exchange for something (which Washington will never go for) it makes the politicians look intractable and obstructionist. We can say "hey,we love kids and we want to help…but it was DC's way or the highway..Plus, the more cigars we smoke – the more kids get care".

    Just sayin…