News: Senator Dick Durbin Introduces Cigar Tax Hike Legislation
14 May 2012
Last week Senator Dick Durbin (D-IL) introduced legislation that would increase federal taxes on premium cigars. Senators Frank Lautenberg (D-NJ) and Richard Blumenthal (D-CT) are co-sponsoring the bill.
The goal of the legislation, as stated by the senators, is threefold: to bring all tobacco products in line with the relatively higher taxes that are levied on cigarettes, to discourage the use of tobacco products by minors, and to increase government revenue. “The current loopholes in the taxes on tobacco products encourage the use of products like pipe tobacco, smokeless tobacco, and ‘nicotine candies’ as a cheap source of tobacco, particularly among young people,†Durbin said in a statement. “This bill will stop tobacco manufacturers from gaming the system and protect more children and teens from this dangerous habit.â€
It is also expected to boost government coffers by $1 billion.
Additionally, the senators aim to make it more costly to purchase premium cigars. Durbin’s so-called “Tobacco Tax Equity Act of 2012†would raise the per-cigar tax ceiling on large cigars over 150%, from 40.26 cents to 100.66 cents. It would also establish a per-cigar tax floor at 5.033 cents. This move comes only days after Durbin and Lautenberg publicly encouraged the FDA to regulate cigars and ban “flavored†cigars outright.
Senator Durbin and his cohorts do not have the courage to say that they’d like to regulate and tax cigars out of existence, but that seems to be the outcome they’re shooting for. Cigars are already taxed quite high, especially when you add up the federal, state, and local taxes. And we’ve written before that regulation of cigars by the FDA would be devastating to the industry, which helps provide 85,000 jobs in the U.S. and hundreds of thousands in Latin America. Ingredient disclosure, testing, and marketing restrictions would stifle the development of new cigar blends and eliminate events where cigar makers pass out free samples to cigar shop patrons.
Be sure to take a few moments to effectively contact your senators and urge them to not support the Tobacco Tax Equity Act of 2012.
photo credit: Flickr