27 July, 2007

More on the Tobacco Taxes...

According to Market Watch, the House is considering a smaller increase in the possible tobacco tax. They are looking at increasing the tax rate on large cigars to almost 45% of the manufacturer's price, and cap the tax at $1 per stick. The possiblity of an increase, even as minimal as $1, will have far reaching effects. Within the United States, Florida would be hit the hardest. Cigar Manufacturers Association of Tampa estimates that 80% of all cigars sold in the U.S. are produced in Florida or imported there. The countries that produce our favorite smokes would also feel the effect of this tax. The Dominican Republic, which imported an estimated 540 million large cigars, would be hit the hardest.

Closer home, many of the 2,500 specialist tobacco shops in the U.S. would feel the pain. Mostly consisting of mom-and-pop type operations, small tobacconists would see their already minimal margins go down the tube. Even the smaller tax increase now being considered would be difficult to take on. Lew Rothman, president of 800-Jr Cigar Inc., said substantial tax hikes could disrupt sales enough to put a lot of the smaller tobacconists with few resources out of business. "It's sort of a a retirement type job," said Rothman, "these people are not peopel with tremendous business sense. I think we could survive, a lot of people would not." Mr. Rothman is correct. Think about it, as a cigar smoker what's your ideal buying situation? Would you rather have the cold and sterile experience of ordering all your cigars online? Or is it nice to have the option to go down to your local tobacconists, BS with the guys sitting in the lounge for awhile, browse the walk-in humidor (possibly coming across a brand new smoke or getting a great recommendation), and a finally making a purchase which supports the local economy?

To me, this is an easy decision. As many of you, I work in front of a computer all week. Yes, it is nice and convenient to order online, but there are not many experiences that beat walking into a local tobacconists, smelling the cigars and pipes, and actually holding a really nice smoke in my hands before buying. Is it just me, or is that one of life's great experiences?

If you want to help, check out
RTDA's online petition and email program to shut this down.

Thanks and have a great weekend all,

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