Monday, August 6, 2007

Bad time to pick up a new vice?

Ten years ago, I couldn't explain what a single-malt Scotch was, let alone name a favorite. But I can now.

Cigars, though, I'm still learning about. I've added a cigar blog to my list of occasional reads, and for father's day this year, my daughters gave me a beautiful Don Salvatore Cuban Wheel humidor that I'm working on stocking with some good smokes as I discover them. That is, if I can afford to. A recent post over at Mountain Philosopher has me a little concerned:

The State Children’s Health Insurance Program (SCHIP) Bill, co-sponsored by Senators Hatch and Kennedy, and which passed the Senate last week by a veto-proof majority but which has yet to pass the House, would extend health insurance to millions of uninsured American children. The bulk of the program's costs would be financed by an additional 61 cent tax on a pack of cigarettes. Doesn't sound unreasonable to me.

The bill also calls for HUGE increases on premium cigars which yours truly does relish upon occasion. How much of an increase? The current stoogie federal tax is a 5 cents. The House version of the bill calls for about a one dollar tax. Again, I can live with that 2000% increase.

But the Senate version goes crazy, setting up to a TEN DOLLAR TAX per stick! The formula calls for an approximately 53% tax on the wholesale cost. I typically smoke four to seven dollar cigars. A seven dollar cigar runs about $3.50 wholesale, making it $5.25 before markup, and about ten bucks to me if the retailer is going to maintain his margin and stay in business. The fifteen dollar sticks, and believe me, these are more popular than you might think, will start to go for 24 bucks.

I now understand why the humidor came with a little flyer urging me to visit the Legislative Action Center of the Retail Tobacco Dealers of America and get involved.