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The people speak: Don’t devastate cigar industry with SCHIP

Regarding the expanded SCHIP program that President Bush recently vetoed, it should be noted that part of the funding for that growing program would come from a sure-to-decline revenue source when a proposed 5,900 percent increase in the federal tax on hand-crafted cigars devastates that industry.

Today, there are 20,000 people employed in some 3,500 neighborhood cigar stores whose principal revenues come from the sale of hand-crafted cigars. For the most part, these stores are small, family-owned businesses that cannot afford any decline in sales which this proposed tax increase would surely precipitate.

The bill would impose up to a $3 import tax on each hand-made cigar, which would translate into a $6 to $8 increase cost per cigar to the consumer. Such a massive increase will lead to horrific sales declines, which ultimately will lead to business failures and lost employment, not only in the United States but also in the countries where most of these cigars are hand rolled. An estimated 250,000 jobs with some of our most important Central American trading partners are also at stake.

Hand-rolled cigars are different from other tobacco products in that they are more a hobby than a habit. They are used by adults to celebrate socially significant occasions. Under the proposed legislation, such cigars would be virtually unaffordable to many, if not most, consumers.

Although our association is supportive of making health care available to individuals eligible to receive care under the SCHIP program, devastating an entire industry in the process hardly seems like the way to accomplish this program’s lofty goals.

Source: Muskogee Daily Phoenix