Cigar shops could go up in smoke
This is madness. A good cigar - one of the finer things in life - could be eliminated from my short list of leisurely after work activities. And not just mine, but every working class stiff out there who enjoys the pleasure of puffing a handmade imported cigar after a hard day of labor.
That's because the federal government, in all its infinite wisdom, decided the best way to raise $35 billion for the State Children's Health Insurance Program was to impose a tax on tobacco.
The original version of the bill threatened a 20,000-percent tax increase - that's no misprint - on cigars, from a nickel to $10 apiece. The final version settled at a ceiling of $3 per cigar, still a 6,000 percent increase.
By the time the tax increase is passed on to the consumer, however, that $3 tax will equate to somewhere between $6 and $8. So, if an aficionado normally pays around $7 for a cigar, double it.
Most cigar smokers I know - it's more a hobby than a habit - would just skip it rather than plunk down $14 for a single smoke.
At that point, it would be forget cigars. Cigars would be out of sight, out of mind and we'd go on with our lives.
But this is where the situation gets sticky. Once the consumers throw in the towel and stop buying cigars, the entire cigar manufacturing industry crumbles to dust.
In the U.S. alone, there are approximately 20,000 people employed in some 3,500 neighborhood cigar stores, whose principal revenues are generated by the sale of hand-crafted cigars.
"It's obscene," said Ron Michelson, owner for six years of Briar Patch Smokeshop in the Arden Fair Mall. "I'm very much concerned about staying in business if the bill passes."
But the impact in the U.S. barely scratches the surface of the devastation this potential bomb could drop on Central and South American countries where most of the cigar tobacco is grown and manufactured.
An estimated 200,000 jobs could be lost in those countries where poverty is already prevalent and there are few alternative professional pursuits.
"If it passes, it's going to hurt everybody," said Aaron Omaryar, owner of Cigarette City in Folsom. "But it's especially going to hurt the cigar manufacturers."
On Oct. 3, President Bush vetoed H.R. 976, the legislation enacted by Congress to fund SCHIP. The legislation returns to the House today for a vote to override the veto. The House needs a 2/3 majority, or 290 of 435 members.
For all cigar smokers, retail cigars shop owners and cigar manufacturers, we can only hope sanity replaces stupidity and the House fails to muster enough votes to override the veto.
But even if that happens, the cigar industry is far from out of the woods.
"Even if the veto stands, we're going to be hit with this again," said Michelson, who fought hard to help defeat state vice tax Prop. 86 last year. "Taxes on tobacco products are an endless battle."
Wednesday, October 17, 2007