SCHIP Bill to Increase Cigar Tax 20,000% in March ‘09?

Since the time of ancient Rome, the Ides of March still resonates today as a day of infamy, due to the murder of Julius Caesar in 44 B.C. But, what will happen in March 2009 will be the death of the cigar industry. That is, if the SCHIP Bill passes in Congress.

The bill calls for an increase in tobacco taxes to fund an expansion of the State Children’s Health Insurance Program (SCHIP). The revenue raised was to provide insurance coverage for kids and some adults who weren’t poor enough to qualify for Medicaid, but still lacked insurance.

It is a noble and righteous cause to undertake. But, to raise the cigar tax an astonishing 20,413 percent per cigar, from about five cents to up to $10 per cigar is downright pillaging. The current tax rate on cigars is slightly under 5-cents per stick. So, you do the math: from 5-cents to $10 per cigar.

Are we really back in the times of ancient Rome?

On the surface, most Americans would think “there’s no way the government would do such a thing.” But, I would strongly suggest you to think again. The government robs and loots you everyday.

If the government wants to raise 30 billion to fund this program, add it to the list of corruptly-run financial institutions and auto industry who are so desperately begging for a bailout. Get this money from the TARP fund.

Twice SCHIP legislation, which included a 53 percent ad valorem cigar tax and a $3 per stick cap, was passed by Congress, vetoed by President Bush, and sustained by the House for lack of sufficient votes to override, but the margin was small – only 12 votes the second time. And if you forgot, the Democrats are running the show now with President-elect Barack Obama coming into town. And you know how the Democrats love to tax, tax, tax.

Word on the street is that the cigar industry got together with the IPCPR (International Premium Cigar & Pipe Retailers Association) and the CAA (Cigar Association of America) submitting two different proposals to the Ways & Means Committee. One was a 12¢ flat tax on each cigar, regardless of value; the other, a 53.313 percent ad valorem tax and 12.5¢ per stick cap. Either of these proposals sounds fair to me.

What scares me is the fact that they initially wanted to raise the tax a whopping $10 per stick. I have no idea which way the government will ultimately decide. That is why the people should make a stand now and contact your local Congressman and Senators. Tell them what you really think. Before it really is too late.