Quote:
Originally Posted by bigb
If I understand the above correctly, then the 32.05% increase over the current tax means that the current tax rate is ~40% of the manufacturer's price? So, to take your example, on a cigar costing $80, the current tax is ~$32, while the tax under the new code will be ~$40?
Just trying to clarify what the numbers mean 
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OK... to clarify, this tax affects all tobacco and tobacco related products. Here is a list of these products, along with their current and revised tax costs:
- Product Current Rates Through March 31, 2009 / Rate April, 1 2009
- Cigarettes 39¢ per pack / $1.0066 per pack
- Large Cigars 20.719% of mfgr. price; cap of 4.875¢/cigar / 52.75% of mfgr.
price; cap of $40.26 /cigar
- Little Cigars 4¢ per pack / $1.0066 per pack
- Pipe Tobacco $1.0969 per pound / $2.8311 per pound
- Chewing Tobacco 19.5¢ per pound / 50.33¢ per pound
- Snuff 58.5¢ per pound / $1.51 per pound
- RYO; Cigar Wrappers $1.0969 per pound / $24.78 per pound
- Cigarette Paper 1.22¢ per 50 papers / 3.15¢ per 50 papers
- Cigarette Tubes 2.44¢ per 50 tubes / 6.30¢ per 50 tubes
source: NATO - Nat'l. Assn. of Tobacco Outlets
Another concern of mine is that this tax will not be fully utilized for it's stated purpose, similar to the gains the Gov't. got from the Tobacco lawsuits. Some of that money went into building schools, roads and so on. A neat little trick the Gov't. uses is that if the revenues are not fully budgeted for a specific purpose, the 'unused' portion is then returned to the Gen'l. Fund. State Lotteries are prime examples. In my state, the wording on the Lottery Bill was that the proceeds were to be spent on Education and the Elderly. Last year, the state took in $250M in Lottery revenues, but only budgeted $60M each for Education and Elderly, $120M total. They then added the remaining $130M to the Gen't Fund to spend on all the pet projects they couldn't fund with taxes and other revenues.
Woodrow Wilson's VP, Thomas Marshall was immortalizrd by coining the phrase: "What this country needs is a really good five-cent cigar." I bet he never imagined that cigar taxes would rise to $40 per cigar! Just another Liberal Socialist idea gone wrong because the Fat Cats will still enjoy their cigars, they'll just pay the tax. But the little guy will be forced to give it up.