Higher Cigar Taxes Now Official
Thursday February 5, 2009
It's now official, the federal excise tax on cigars in the U.S. is going up on April 1, 2009. Yesterday, President Obama signed the proposed expansion of the State Children's Health Insurance Program into law. The U.S. House accepted the Senate's version of the plan, which increases the tax rate on large cigars to 52.75%, with a cap of 40.26 cents per cigar. In essence, this means that any cigar with a price of more than 76 cents will be taxed 40.26 cents (any cigar under 77 cents will be taxed at the rate of 52.75%). Higher taxes are not good news, but in this case, 40 cents per cigar is better news than the $10 per cigar and $3 per cigar caps previously proposed. Is it time to celebrate? You decide (comments welcome, below).
Comments
I find it hard to celebrate ANYTHING Obama has done
I pay plenty of taxes as it is. Now I have to fund something that I will NEVER be entitled to use. I’m all for helping the less fortunate but where is all the money I pay for taxes going now? How about pulling this “Economic Stimulus” plan & use that money for the needy instead of handing it over to incompetant overpaid execs who will squander it without helping the rank & file of this nation.
Obama’s tax increases have just begun. Impeach him>
So the government wants to wipe tobacco out of exsistence and ban it everywhere , yet they piggy-back a program for kids by taxing product they are trying to eradicate. Sounds like the government will need to start PROMOTING smoking to make sure these programs are funded ! Smart, and Government, a contradiction in terms !
Obama didn’t create this mess Bush did, he is trying to dig us out give him a chance before you slam him. I’m not for higher taxes but at least it’s not going to a company he has stock in like the last administration.
Taxation without Representation and this is only the beginning.
pelosis/obama’s schipp program for undocumented residents of the u.s.a.will now be funded by the tax paying,cigar smoking citizens of the u.s.a. smoke-em for those that don’t pay taxes. just not right is it?
Once the States became dependent on lotteries and, in a few cases, casinos, they started promoting gambling. How long before our State governments will put up billboards asking us to buy a few packs or boxes “for the kids”?
Haven’t the Socialists figured out that higher taxes, whatever they are, ultimately end in reduced revenue for everyone including the government? I don’t need a cigar. Raise the tax and I end up buying less. How does that help any program? The U.S. government’s job is to protect our pursuit of happiness. Who’s happy to pay more taxes? Even the Obama tax-dodging team should understand that, huh Daschel?
mom & pop cigar stores are just about all that china has not touched….
….thank you washington for helping another family enterprise by taxing us out of busines as my cigar customers will smoke less than ever….
SO what is difference in the pre SCHIP tax and POST obama SCHIP Tax? How much more is it going to cost to buy a box of 20 cigars? I am in Michigan.
Cigars will cost about 35 cents per cigar more. A box of 25 cigars will cost about $8.75 more. However, it remains to be seen how much of the tax that each manufacturer will pass on to consumers. Also, each state has its own tax rate, so the actual increase can be more in some states than in others.
After looking at my paperwork this year and realizing I paid more than $36k in taxes for 2008, I can’t begin to say enough about getting the government to stop taxing everything we do.
This is just going to make it more tempting to bring cigars into the country illegally from other nations. It makes me miss our beloved cigar-smoking presidents from the past.
I agree everyone will start buying from other countrys when they pass this tax just like most already do that smoke cigarettes.
Raising taxes on cigars will reduce demand, increase job losses in Central America where most cigars are made, thus leading to an increase in illegal migration to the U.S. with more children of illegals getting free health care and other services at taxpayer expense, resulting in even further taxes down the road. Call it spiraling idiocy.
Obama’s an idiot – and so is Ken!
The Liberal (Socialist) Gov’t in Canada virtually wiped out cigar business’ with excessive taxes. A $5.00 cigar in the US costs about $24.00 in Canada. The sad thing is that the South Americans who make an honest living making cigars will be hurt. I guess they will have to produce more illegal drugs to make a living as their are far more drug users in the US and Canada then cigar smokers!
I’m always buying my cigars from Spain, very good prices and quality, although they don’t ship cubans
Hank..pretty soon you’ll be able to import Cubans yourself. Once the Kenyan guy makes nice with the Castro boys, there will be plenty of great Cuban smokes for him to tax.
Taxing hard working (tax paying) Americans is nothing to celebrate. However, neither is lung cancer. By the way, Wayne Edward… To impeach doesn’t mean to kick out of office. It simply means to bring to federal trial. In this case the federal government has no privity to indict Obama. Go back to high school and learn your American History!
is it per-cigar for boxes? or do you pay a combined tax for all of them?
Federal Excise Tax is now 40-cents per cigar. The tax on a box of 25 cigars is $10.00.
So the tax is applied to the manufacturer, then once again to the retailer? Does this make sense?
The federal excise tax is only applied to the manufacturer. Unless the manufacturer absorbs the tax without passing it on to the retailer, then the retailer’s markup is applied to his now higher wholesale price, as are state and local taxes. This is called the multiplier effect, where a 35-cent increase in the manufacturer’s price can end up costing the consumer about $1 more per cigar at the retail level.