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SOME SENATORS GET IT

”The effect of such an enormous tax increase would be devastating.”

Los Angeles, July 23 – As cigar smokers across the country continue to contact U.S. Senators about the preposterous proposed increase in cigar taxes (and cigarette taxes) to fund an expansion of children’s health insurance, some Senators get it:

• Reader M.J. from Texas forwarded this response from U.S. Senator John Cornyn (R-Texas):

“Thank you for contacting me regarding funding for the State Children's Health Insurance Program (SCHIP) through increased tobacco taxes. I appreciate having the benefit of your comments on this important matter.

“As you may know, the State Children's Health Insurance Program (SCHIP) was created in 1997 to address the needs of uninsured children in America. It was designed for families who do not qualify for Medicaid, but cannot afford private insurance for their children. Over the past decade, SCHIP and Medicaid together have reduced the number of uninsured low-income children by one-third.

“I fully support initiatives that increase Americans' access to affordable health care. But, I believe Congress should not rely on budgetary gimmicks or tax increases. Instead, Congress should focus on eliminating wasteful government spending. In fact, the Government Accountability Office (GAO), an independent, investigative arm of Congress, has identified billions of dollars in federal expenditures that are vulnerable to waste, fraud, and abuse. The GAO found that more than 10 percent of SCHIP enrollees are actually adults whose participation in SCHIP is diverting funds from the needs of low-income children. Instead of raising taxes, Congress should strengthen SCHIP by considering the President's proposal to terminate or reduce the budgets of over 140 inefficient or ineffective government programs.

“You may be interested to know that I offered an amendment to the Fiscal Year 2008 budget resolution that would have strengthened SCHIP and would have ensured that it first covers low-income children across the country. In addition, my amendment would have allowed states to continue using innovative strategies to cover low-income children; improve and strengthen the oversight of SCHIP; and eliminate waste, fraud, and abuse.

“I appreciate having the opportunity to represent the interests of Texans in the United States Senate, and you may be certain that I will keep your views in mind as my congressional colleagues and I consider healthcare funding during the 110th Congress. Thank you for taking the time to contact me.”

Before you sent Cornyn any campaign contributions, however, also note that he is in favor of having the U.S. Food and Drug Administration take regulatory control of tobacco products.

• Mississippi Senator Trent Lott (R-Mississippi) – a cigar smoker himself – got the attention of the Wall Street Journal with his comment published last Friday that sarcastically ripped the Finance Committee:

“I think we ought to just shoot people that presume to smoke cigars in our presence and be done with it.”

And members of the cigar community are making their voice heard in the media: • Drew Newman of the J.C. Newman Cigar Co. answered the Washington Post editorial in favor of the cigarette tax funding for the SCHIP program with:

“[The editorial] neglected to note that the tax on manufacturing or importing cigars would increase as much as 20,412 percent, from just under 5 cents to a maximum of $10 per cigar. The effect of such an enormous tax increase would be devastating.

“For example, a typical handmade cigar that is imported for $9 currently carries a tax of $0.04875. If this increase is imposed, the federal tax on this same cigar will be $4.6017 – an increase of 9,339 percent!

“Unlike the cigarette industry, which is controlled by huge conglomerates, the cigar industry is dominated by small, family-owned companies that have been in the business for generations. My great grandfather founded our company in 1895, and our tobacco growers, suppliers, competitors and retailers are all small, family-owned businesses.

“Such an enormous, disproportionate tax increase would be grossly unfair and would cripple the premium cigar industry and all of the family-owned small businesses that are part of it.”

• Bill Finck, Jr., the fourth generation in the Finck Cigar Co. of San Antonio, Texas told the San Antonio News-Express of the proposed cigar tax that “[i]f they were to pass it, it would absolutely put us out of business. It’s really going to kill us.

“We would move to another country, but what happens to all my employees,” said Finck. “Eventually, I think it will just be illegal to ship tobacco. There’s a good chance that’ll kill mail order, so that’s why I opened the retail store and will probably open more.” Finck’s store is reported to be the largest in Texas.

The News-Express noted that Finck – who sold about 25 million cigars last year – has 45 employees, some of whom have been with the company for more than 20 years.

Smokers who oppose this tax must contact their Senators and signal their displeasure. Click here for a contact list of U.S. Senators with telephone numbers and electronic mail addresses. A consumer should only contact his own Senators because Senators are most responsive to their own constituents.

A similar bill is making its way through the House of Representatives, but now is the time to stop the measure cold in the Senate.
~ Rich Perelman

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