Wednesday, April 1, 2009

Cigar Examiner: Sin Tax


Cigar Examiner: Sin Tax
Well unless you have been living under a rock for the last year plus, you are fully aware of the economic meltdown that has been effecting the global economy. And for those who have been living under a rock, you're about to find out too because your rock is being repossessed.
Well when the coffers are empty and people are mad, the politician faces a bit of a query: We need money but no one can afford to give it and if we raise taxes I probably won't get re-elected. So the first place politicians will always go to in a jam is the Sin Tax. Sin taxes are taxes typically added to liquor and cigarettes. Politicians love sin taxes because they generate an enormous amount of revenue and are usually easily accepted by the general public.
Starting April 1st of this year, "Large cigars will be taxed at 40 cents" a cigar versus the current 5 cent tax. That is a 700% tax increase on a single product. Can you imagine if the government tried to increase the tax on gasoline, cars, bread or any other product out there by 700% in one shot, people would start forming lynch mobs.
Cigarette smokers will also be getting hit thanks to the Schip Bill, with a raise of an additional 68 cents per pack. The funds from this tax will help increase the funds of the State Children's Health Insurance Program (SCHIP) allowing it to expand coverage to 4.1 million more kids and extend the program through 2013. Sounds like a good cause right?
Except, why are smokers paying for it? More specifically cigar smokers. Why not tax diapers, or baby food, or any of the other hundreds of children's products out there on the market. I have two kids both under the age of 2 years, and I would have no problem sharing the burden of a needed tax increase on certain products related to where the tax is going to be put to use.
If you want to make the argument that second hand smoke is infecting the children, and that big bad tobacco with it's cigarettes that it sells to children should be punished, fine. I don't buy the argument but at least I can accept it. But even then, that has nothing to do with cigars. Children do not buy premium cigars. Let me repeat that - CHILDREN DO NOT BUY PREMIUM CIGARS. They might sneak some Swisher Sweets or Black and Milds from a gas station from time to to time, but they do not go into premium cigar shops and purchase premium cigars.
Don't forget that a box of 25 cigars is going to cost you an additional $8.75 starting April 1st.

Smoking Bans Around the World
Smoking Bans in the US