PTownshend
big-nosed cigar freak!
- Joined
- Sep 22, 2005
- Messages
- 851
At 2 am this morning, the House Ways & Means Committee approved
H.R. 3162, a bill to expand the State Children's Health Insurance
Program (SCHIP) to be funded by higher tobacco taxes and cuts in the
Medicare Advantage Program. At this time, the full House and Senate are
expected to consider their respective measures next week.
The House bill would increase the tax on large cigars to a new rate of
44.63% with a tax cap of $1 per cigar. There was some talk of trying to
reduce the rate to 33%, but this would result in a revenue loss
projected at $1 billion over 5 years. There was no interest in reducing
the $1 cap. The tax on pipe tobacco would go to $1.26 per lb. Floor
stocks taxes would be assessed on cigarettes only, payable on April 14,
2008.
Under the Senate proposal, large cigars would be taxed at 53.13% of the
manufacturer's sale price (capped at $10 per cigar) and pipe tobacco at
$2.8126 per lb. Floor stocks taxes would be assessed on all tobacco
products from the manufacturer through the retailer level, payable on
April 1, 2008.
Both bills would make the effective date of the tax increases January
1, 2008.
Currently, large cigars are taxed at a higher rate than any other
tobacco product. Indeed, the current tax is higher than any other
product on which the IRS levies a federal excise tax. The new tax
proposals would make this discrepancy even more outrageously
pronounced.
Many of you have already contacted both Chambers of Congress—do it
again! Persistence pays off! We must all continue contacting your
Congressmen or Congresswomen and Senators and urge them that they seek
reductions in the cigar tax increases. We will provide you with
additional information as news becomes available.
H.R. 3162, a bill to expand the State Children's Health Insurance
Program (SCHIP) to be funded by higher tobacco taxes and cuts in the
Medicare Advantage Program. At this time, the full House and Senate are
expected to consider their respective measures next week.
The House bill would increase the tax on large cigars to a new rate of
44.63% with a tax cap of $1 per cigar. There was some talk of trying to
reduce the rate to 33%, but this would result in a revenue loss
projected at $1 billion over 5 years. There was no interest in reducing
the $1 cap. The tax on pipe tobacco would go to $1.26 per lb. Floor
stocks taxes would be assessed on cigarettes only, payable on April 14,
2008.
Under the Senate proposal, large cigars would be taxed at 53.13% of the
manufacturer's sale price (capped at $10 per cigar) and pipe tobacco at
$2.8126 per lb. Floor stocks taxes would be assessed on all tobacco
products from the manufacturer through the retailer level, payable on
April 1, 2008.
Both bills would make the effective date of the tax increases January
1, 2008.
Currently, large cigars are taxed at a higher rate than any other
tobacco product. Indeed, the current tax is higher than any other
product on which the IRS levies a federal excise tax. The new tax
proposals would make this discrepancy even more outrageously
pronounced.
Many of you have already contacted both Chambers of Congress—do it
again! Persistence pays off! We must all continue contacting your
Congressmen or Congresswomen and Senators and urge them that they seek
reductions in the cigar tax increases. We will provide you with
additional information as news becomes available.
