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NEW CONGRESS READY TO PASS SCHIP |
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Page 1 of 2  Plus: Boston smoking ban voted postponed due to deluge of public comments!
Los Angeles, November 13 – There’s little doubt that buoyed by Barack Obama’s win in the Presidential election and larger majorities in Congress, Democrats will push through new legislation that could have severe impacts on cigar smokers:
The first is an expansion of the State Children’s Health Insurance Program (SCHIP), which is supposed to pay for expanded health care for children (and a lot of other people according to the new rules) by hiking taxes on tobacco products. Most of the money will come via a 61-cent increase on the Federal tax on cigarettes, from 39 cents per pack to $1. But cigar smokers will be smashed with an increase in the Federal tax rate on cigars and especially an enormous rise in the tax cap from the existing 4.875 cents each to $3 each.
Chris McCalla, the legislative director for the International Premium Cigar and Pipe Retailers Association (IPCPR), sent a note to the trade on Wednesday that sought to reassure the membership that everything that can be done is being done:
Your trade association, CAA [Cigar Association of America], and members of the industry are aware of the new administration's position on making SCHIP a priority in 2009.
The CAA, members of the industry, the IPCPR Executive Board and our lobbyists have been working with key congressional leaders over the last few months to negotiate a tax plan that would provide the monies needed for the SCHIP and yet keep our industry healthy and taxed at a sustainable level.
Due to the delicate nature of any negotiations the details cannot be disclosed at this time. Even though nothing is ever guaranteed in politics, the people we are dealing with are known for [keeping] their word. We are constantly in contact with the key players and we will know before any changes occur to the current SCHIP Bill.
Please feel confident that through the IPCPR and their lobbyists, the economic health of the retailers and our industry has been and will be fought for and protected.
The cigar lobby has already knocked out a provision in an earlier version of the bill that would have required cigar retailers to pay a floor tax on all existing stock as of a certain date to bring all cigars being sold to the same level of taxation.
Whatever language gets into the final version of the bill is what will be passed, since President-elect Obama is sure to sign it into law.
Soon to follow the SCHIP bill will be the bill to require oversight of the tobacco industry by the U.S. Food & Drug Administration. The principal target of this legislation is once again cigarettes and to a lesser extent, smokeless tobacco.
The cigar trade has been much less active in opposing the F.D.A.-control bill since cigars and pipes are not targeted for immediate regulation and any change in that policy would require at least a couple of years to ramp up. Previous F.D.A. directors such as David Kessler, who proposed F.D.A. control over tobacco, have noted that cigars are not marketed to children and are not used by any significant percentage of underage smokers in comparison to cigarettes.
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