CRA News Alert - January 11, 2009


“Life, Liberty and the Pursuit of Happiness” | “No Taxation Without Representation”



SCHIP And Cigar Taxes - A Formula For Decline
 

This week, Congress is preparing to consider a bill to expand the State Children's Health Insurance Program (SCHIP) by significantly increasing federal taxes, in part on cigars – possibly up to $3 a cigar. The fallout from the tax increases will include declining sales, employee layoffs, store closings and the potential for rising black market activity. In addition, there will be a severe economic impact on the cigar producing nations of the world, such as Honduras , Nicaragua , and the Dominican Republic . The ripple effect of this tax program has not been thought out in Congress, and you are needed to help oppose it.

Cigar Rights of America stands with numerous pro-business organizations in opposing these tax increases that are being proposed at the worst possible time in our nation's economic history. The very idea of raising taxes on cigars, with so many family owned retailers and small businesses at risk in this economic climate, defies logic.

It is important to understand that many industry organizations support the reauthorization and/or expansion of the SCHIP program which is scheduled to expire on March 31, 2009 . What is being opposed is substantially raising federal taxes in cigars to fund the expansion of SCHIP.

If the tax increases that Congress may consider this week to fund an expanded SCHIP program in 2009 are the same as or similar to the tax rate increases considered in 2007, the economic impact on the entire industry will be disastrous. It could be as much as 50% for the premium hand-made cigar industry, in addition to doubling and tripling the retail cost of your favorite cigar.

 

Contact Your Representative


We urge you to contact your Congressional Representative, the leadership of the House, and the chairman of the House Ways and Means Committee to voice your concerns about the proposed tax increases on cigars.

    Find and Contact Your Representative.

   

   

   


 

Industry estimates project up to 117,000 jobs lost due to the tax increases plus numerous wholesalers and retailers will be forced to close. In this current economy, such severe job losses would be extremely painful not only to workers and their families, but also to the national economy.

There will be a migration of sales to illegal suppliers that will further exacerbate the downturn in sales that will be experienced by law-abiding retailers and worsen the revenue shortfalls to the states and the federal government.

According to a Budget Options report issued by the Congressional Budget Office in February, 2007, increasing the federal excise tax rates will significantly reduce state tax collections and sales tax revenue. This will put additional budgetary pressure on all state governments, negating the very benefit of expanding SCHIP.

Moreover, President-elect Barack Obama needs to keep his campaign promise and not raise taxes, including tobacco taxes, on any American who earns less than $250,000. We should implore Congress to reauthorize SCHIP without imposing disastrously large tax increases on tobacco products.


Calling All CRA Members To Action!

Now, more than ever, we are asking CRA Members and cigar enthusiasts around the nation to band together against these unfair and restrictive tax proposals. Together we can make a difference!

We urge you to contact your Congressional Representative, the leadership of the House, and the chairman of the House Ways and Means Committee to voice your concerns about the proposed tax increases on cigars.

It's easy to take action. Simply visit the official United States House of Representatives website to Find and Contact Your Representative.

After you have written to your Congressional Representative, please consider writing to three other very influential members of congress: