SCHIP will not ruin cigars
By Owen Morris in Leftovers
Monday, Feb. 9 2009 @ 11:35AM
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Back then cigars were rare treats, but for the last couple of years they sat in a sweet spot. Web sites were selling good stogies starting at a buck a piece, and the smoking taxes that affected cigarettes largely left cigars alone.
Now that's changed. On February 5, President Barack Obama finally signed into law the State Children's Health Insurance Program, or SCHIP, which gives 8 million kids health care coverage (good thing!) while raising taxes on cigars. (Not so good thing.)
For a while, SCHIP had the cigar industry in a tizzy.
When the cigar tax was first proposed, it would allow the government to add a $10 tax to each cigar. Not each box but each individual cigar. While that seemed outrageous, there appeared to be little that cigar manufacturers could do about it. As the president of the Cigar Association of America said, "How do you oppose a sin tax Congress has rigged to help sick kids?"
Recognizing how big a black market a $10 tax would create, Congress pared it down to a $3 tax when Bush vetoed the bill. Many people thought this was where the tax would stay in the new version. Anticipating the bill's signing, I bought two boxes of cigars. With 20 cigars each, I figured I had just saved myself well over $100. The only problem being it will take over two years to smoke 40 cigars.
My preparations were pretty much worthless. The final bill Obama signed into law caps cigar taxes at 40 cents per stogie and life goes on for the cigar business. Meanwhile, I'm stuck with two boxes of cigars. But if smoking more cigars means more weekends like this one, I won't mind one bit.
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