January 17, 2009
Taxing Smokers to Pay for Children's Health Insurance
A recent strategy many smokers have turned to in order to reduce their cost of smoking is to buy a "roll your own" machine that is dramatically cheaper than buying packs of cigarettes. They are easy to use, and you can control what goes into your cigarette (getting tobacco with no additives or organic tobacco, etc). At least one smoker received the following email from the place they buy tobacco:
Sent: Friday, January 16, 2009 1:23 PM
Subject: Note For Custom Blends Customers - Federal Tax Increases
To All Custom Blends Customers:
House Bill HR2 (S-Chip) has been introduced in the United States House of Representatives, and sadly, once again, tobacco users are in the crosshairs. Now, generally speaking, we have no problem with helping to provide medical coverage for uninsured children - our main issue concerns the funding changes in this bill, because removing "Pay as you Go" knocks a funding hole in this program that the additional taxes on smokers can't fill. And the unfair tax increases for roll your own smokers are heavy - our customers should read on, this will unfortunately affect you. Some Details of this Federal Tax Hike: Effective date April 1, 2009
- - The prepackaged cigarette tax rate goes from $.39 per pack to $1.00 per pack. This is in addition to your respective State taxes.
- - Snuff taxes go from $.585 per pound to $1.50 per pound.
- - The tax on pipe tobacco is raised from $1.0969 per pound to $2.8126 per pound.
- - The tax on Roll Your Own tobacco will increase from $1.0969 per pound to $24.62 per pound (yes, $24.62 per pound.).
Additionally the definition of Roll Your Own has been "expanded" to include cigar wrappers such as "blunt wraps". The tax change to small cigars (such as Deans Flavored cigars in the 20 packs) will be phased in over a five year period.
Rates per year:
2009 & 2010 - $.25 per pack
2011 & 2012 - $.50 per pack
2013 & 2014 - $.75 per pack
2015 and beyond - $1.00 per pack
—————————————–
There is no business that can absorb this kind of punishment and not change prices and methods. This is utterly out of our control, and we're as dismayed as you must be.
Because of this new Legislation (HR2) and additional pending State tax legislation that is directly targeting items such as rolling papers, machines, and filter tubes, we have to fundamentally change our pricing structure: When these new taxes take effect, we can no longer offer free tubes with our tobaccos, or offer the 10% discount on multiple bag purchases.
The in-store customer loyalty program also has to be amended (perhaps cancelled) - we have to wait until all of these new taxes are finalized before we can make rational decisions.
Yet another new tax applies here - it's called the floor tax. This tax applies to any tobacco products that are on the floor of any of our stores just prior to the April 1st tax hikes on tobacco. We will have to have little to no tobacco in our stores by March 31st, so we recommend you order several weeks before the deadline. We have to draw down inventory in time or face an enormous tax burden. We can restock afterwards, but we need to be clear of tobacco on the floor for at least those two days, so please order early in March.
Finally, we strongly encourage you to contact your Senators and Representatives, and let them know how you feel about this unfairly targeted taxation. They should know that if raising taxes is so important, then everyone should share the burden. Tobacco users have long been the punching bag for legislators who lack the will to raise taxes on all citizens, and they need to know we're tired of it. Please be firm, but reasoned if and when you write them - and feel free to utilize the following link:
This is a link to the bill:
I can't tell whether this is a done deal or not, help?
http://thomas.loc.gov/
Type in Bill Number HR2 into the search box
Cigarette Taxes
234 Comments on Taxing Smokers to Pay for Children's Health Insurance »
January 19, 2009
blueshield @ 6:43 am:
I don't know if the government really wants to get the additional fund for the new health insurance plans for 4M children from the tobacco companies by additional tax on the products, or just another strategy to wipe off smoking and smoking-related sickness they want to lessen. The latter will be great, though. In effect, spending on medical attention because of cigarette smoking will lessen.
January 22, 2009
Vic @ 4:59 pm:
The tax is not on tobacco companies… the tax is on smokers who pay the tax (hurting the poor the most I might add).
June 23, 2009
Anthem insurance @ 3:31 am:
That should have been long time ago… although i think smokers are already getting a lot of grieff from everywhere. Adding more tax might help some quit smiking faster.
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Smoking…what a waste.
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Compared to Europe, these taxes are still acceptable.
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That must have been long time ago even if I believe smokers are already getting a lot of pain from everywhere. The tax must not be done on tobacco companies but on those smokers who pay the tax. I think smokers are by now getting a lot of pain from all over the world.
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Harold99 @ 3:51 pm:
We must do everything we can do prevent people from smoking. Of course there will be always some of them that will smoke no matter what but if we will reduce a percent, it will be a great thing. So let's keep trying and everything will be cool. Thanks for the great website by the way.
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