The following is a press release from the National Association of Tobacco Outlets advising all responsible consumers of tobacco products to make their voices heard on this subject. It is imperative that we all band together and speak out against this unfair taxation of a small segment (less than 10%) of society for a program that has universal concerns. Why put this on our back?

A Call to ACTION on SCHIP Tax Increases!

If Congress passes a bill early in 2009 to expand the State Children’s Health Insurance Program (SCHIP) by significantly increasing the federal cigarette and tobacco taxes, the fallout from this expansion of government subsidized health care will likely include major cigarette and tobacco sales reductions, large increases in the number of store robberies because the value of tobacco products would be so high, a floor stocks tax on cigarette and tobacco inventory adding up to an estimated $5,000 per store, employee layoffs and even store closings.

The SCHIP program is a top priority for Democrats and may result in the single largest tax increase on one industry’s products in the history of the country. With President-Elect Obama a supporter of SCHIP, the possibility of a tobacco tax increase to fund the expansion looms large even though Obama made campaign promises not to increase taxes on any one who earns less than $250,000. The 2007 SCHIP bills proposed the following increases in the federal tobacco excise tax rates:

Tobacco Product	Current Tax Rates	SCHIP Bill Tax Rates	Percentage Tax Increase
Cigarettes	39¢ per pack	$1.00 per pack	156.4%
Large Cigars	20.719% of manufacturer’s price; cap of 4.875¢/cigar	53% of manufacturer’s price; cap of $3.00/cigar	6,000%
Little Cigars	4¢ per pack	$1.00 per pack	2,197%
Pipe Tobacco	$1.0969 per pound	$2.8126 per pound	156.4%
Chewing Tobacco	19.5¢ per pound	50¢ per pound	156.4%
Snuff	58.5¢ per pound	$1.50 per pound	156.4%
RYO Tobacco	$1.0969 per pound	$8.8889 per pound	710.36%

The Time to Act is NOW!!!

NATO’s legislative staff members are sending out to association members customer alert sheets to place on store counters and personalized letters addressed to each retailer and wholesaler’s particular U.S. Senators and Representatives. NATO members need to call their Congressional representatives, urge their employees and customers to do the same and fax the personalized letters to Washington, DC. All the names, phone and fax numbers of the particular Congressional representatives are being provided. NATO members need only dial the phone and fax the letters. Your voice and the voice of your customers need to be heard.

Turbulent Time for Tobacco Requires Grassroots Efforts

No one can say with 100% certainty how the SCHIP legislation will finally be resolved by Congress in 2009. What can be said is that the SCHIP bill is just the beginning of what will be a turbulent year for the tobacco industry. With some in Congress supporting federal cigarette and tobacco tax increases to expand SCHIP and more than 30 states with large budget deficits some of which will also propose higher tobacco taxes as well, NATO wants to remind its members that they must continue to contact their elected officials to be heard on tobacco issues. Maintaining that dialogue and urging customers to make phone calls continues to be an important part of opposing unfair tobacco legislation.

Industry Lobbyists' Consensus Sees Compromise Holding For Next Round of SCHIP Deliberations

November 21, 2008 - As rumors continue circulating about SCHIP in 2009, CAA's and IPCPR's lobbyists, along with several industry consultants, met to share new information and prognostications regarding legislation to renew and expand the State Children's Health Insurance Program (SCHIP).

While tempered with a bit of caution, all parties participating on the conference call remain confident the compromise that was reached and agreed to by Congressional leaders will be incorporated into yet-to-be reintroduced SCHIP legislation.

General consensus among industry lobbyists and consultants holds that despite campaign rhetoric, the reality of governing, particularly in the economic circumstances faced by all segments of the economy, will prove difficult for the new Administration's legislative priorities to be quickly approved. 

With those caveats in mind, there were three consensus views that emerged:
While there are credible scenarios that would delay SCHIP, there was much agreement that SCHIP will likely be an early priority of the new administration.
House leadership has signaled it will likely be among the top three priorities of the Congress/Administration. SCHIP has passed the Congress twice in 2007, so passing the "old" bill with the "compromise" language would be an easy step.
The make-up of the new House and Senate is even more favorable than before and the new President will eagerly sign the bill. Under this scenario, SCHIP would provide a high profile legislative victory and a down payment on the health care agenda.

The International Premium Cigar & Pipe Retailers Association (IPCPR) is a not-for-profit trade association organized as the advocate for the independent retail tobacconist and recognized as the "Voice of Authority and Reason" on premium tobacco related issues. 

Now that there isn’t a Republican in the white house to kill it, Congressional Democrats claim to be making SCHIP a Top Priority. CQ Politcs reported on Friday, November 6th that Democrats in the US Congress plant to move quickly in the New Year to pass a major expansion of the State Children’s Health Insurance Program (SCHIP). House Speaker Nancy Pelosi was interviewed on National Public Radio the day after the election and stated that the expansion of SCHIP “will probably be one of the first bills we would put on President Obama’s desk.”

For those who recall recent events, the US Senate and House both passed a $35 billion dollar SCHIP expansion bill TWICE but it was vetoed both times by President Bush and the legislative branch was unable to swing enough votes to over-ride the veto both times. 

What Does This Mean To You?

Why is this important to pipe and cigar smokers you may ask? Well, because this bill would be funded almost exclusively on the backs (and out of the pocketbooks) of smokers of ALL types.

But that isn’t all, the CQ Politics article points out that the tax increase shown above won’t even cover the cost of the expansion of this program. In fact, the congressional Budget Office issued a report in August of this year which found that a five year expansion of the SCHIP program as envisioned by the House and the Senate will cost close to $45 billion, not the $35 billion they are hoping to raise.

The current SCHIP program is set to expire on March 30, 2009 so they are going to move fast on this. We responsible smokers need to speak out loud and clear that this funding proposal is not only unfair, it is UNSOUND!. Not only will it not fund what they want it to do, thereby continuing to grow our budget deficit even further but it also unfairly targets a small percentage (less than 10%) of the US population to pay for something that they claim is a universal need.

Not only will this hit YOU directly in the wallet in these trying times, but it will likely cause for the closure of many tobacconists around the country that are barely hanging on as it is. This, in turn, will dramatically affect the volume of cigars purchased yearly, decreasing the amount of money raised by this tax increase as demand drops; widening the difference between the funds committed to fund SCHIP and the funds available to pay for it.

And if we look out beyond our own selfish needs, IPCPR and many other organizations predict dire results for the economies of the Dominican Republic, Nicaragua and Honduras as a result of this flawed legislation.

What Can I Do To Help?

Well, we all need to band together and show our elected officials the errors of their thinking in this flawed bill.

Let your US Senator and representative in the House know how the negative impact of this legislation will affect you, affect small businesses in your community and how you feel it will affect our neighbors in cigar producing countries. Make sure that you reference SCHIP in your conversation and how you are rallying your neighbors and fellow business owners to defeat unfair taxation. You should also remind them that as a voting block in their state/district, you WILL remember those that fall prey to the “but it’s for the children” sound-bite mentality behind those supporting this bill.

Helpful Links:

A listing of all the current Senators

How to find your local Representative

Your IMMEDIATE action is the only thing that will keep this proposal from becoming a LAW! Please respond today!

As always, we encourage your responses in the comments section below.

From a press release:

Current SCHIP Program to be Extended to 2009

Veto Override Attempt of Current SCHIP Legislation Unlikely

As you know, the President vetoed the current SCHIP legislation on December 12. The House leadership has scheduled a vote for January 23 to attempt to override that veto. It appears that the House will not be able to muster the 2/3 vote necessary to override the veto.

Late last week there was talk regarding a short term extension of the current SCHIP program through March 31, 2008. However, on December 17, negotiators agreed to extend the current SCHIP program through March 31, 2009 with a small increase in funding necessary for the states to maintain their current enrollment through that date. There will be no increase in tobacco taxes to fund that modest increase.

While it is always possible that Democrats will introduce another SCHIP bill in 2008 to force Republicans to vote on the issue, it now appears likely that the issue will be pushed into 2009.

The International Premium Cigar and Pipe Retailers is a not-for-profit trade association organized as the advocate for the independent retail tobacconist and recognized as the "Voice of Authority and Reason" on premium tobacco related issues.

President Bush Vetoes SCHIP Expansion Bill For The Second Time

President George W. Bush on December 12th vetoed for the second time legislation aimed at expanding the State Children's Health Insurance Program (SCHIP) by $35 billion over five years exclusively funded by increases in the Federal excise tax rates on tobacco products, saying "our nation's goal should be to move children who have no health insurance to private coverage, not to move children who already have private health insurance to government coverage." 

President Bush had vetoed the original SCHIP bill on October 3rd, arguing that the $35 billion expansion is too costly, took the program too far from its original intent to help the poor, and would be a step toward federalizing healthcare. The US House on October 18th sustained the presidential veto in a 273-156 vote. In a bid to win over more Republicans, US House Democrats on October 24th proposed a new version of the SCHIP bill that retained the amount of expansion and funding source, but tightened eligibility rules, generally barring coverage to illegal immigrants, childless adults and children of families with incomes exceeding three times the poverty level. However, the revised measure secured a veto-proof margin only in the Democrat-controlled Senate, while House Republicans held enough of their members together to sustain a presidential veto. With only a few days left in the congressional session, it is not clear if Congress would schedule a veto override vote, which is expected to almost certainly fail (Politico.com 12/12).

Extension Expected to be Approved by Congress

As we are in constant contact with our federal lobbyists who have been closely monitoring this SCHIP issue, popular consensus, both public, from the media, and more private channels within the "Beltway," holds that a veto override vote will fail for there remains the lack of support to muster a two-thirds vote in the House of Representatives to override the president's veto.

At this point, as the current congressional extension (following the first failed veto override vote)  for SCHIP program expires December 14th, there will most likely be another extension to fund the program into 2008. 

As this issue continues becoming more contentious on Capitol Hill, we urge all of you to remain calm, but vigilant. At this time, it is not necessary to contact your Congressmen and urge them to oppose a veto override attempt, as there is not enough support to approve such a legislative attempt.

The current Congressional session adjourns Dec. 22.

News from the IPCPR:

Legislation Proposed Excessive Tax on Cigars
October 18, 2007- Finally, this critical vote failed to pass the House of Representatives in a floor vote today. The final vote was 273-156, short of the necessary two-thirds majority (of present voting members) needed.
We wanted to take this opportunity to thank all of you for your perseverance, tenacity, vigilance, and persistence in contacting your U.S. congressmen and congresswomen, and your senators through
phone calls, emails, faxes, and personal visits to their district and Capital Hill offices. Without your support and direct action we simply would not have made the noise we did in Congress, gaining the attention of influential members that now understand our niche community-industry cannot absorb a massive tax increase and continue to exist.

This is only the first round in what will most likely be a continuing battle for the next several months. As SCHIP expansion and extension of the current program will be sought by congressional democrats. We have already begun communicating and working with congressional leaders and their states, taking the position that if a tax increase in cigars must exist, that a realistic, manageable increase must be a part of the overall proposal. 

A special thank you goes out to the manufacturers within our industry for their efforts throughout the United States and Latin America in mobilizing support against this tax increase. Through their coordinated efforts between the Latin American governments, and their counterparts in the United States, they illustrated and successfully conveyed the ramifications of this tax increase on the Latin American citizens and artisans who rely on the handmade cigar industry for a viable, living income. Key legislators now understand it is more than just a pleasure for consumers, but a way of life for those artisans who produced handmade cigars. Because of the handmade cigar industry, many of these citizens would not have reasonable access to medical and dental care, education, and other social services provided by manufacturers based in these small countries.

Thank you again for your efforts and direct action, for if we are to succeed, we must all hang together, or we will hang separately.

International Premium Cigar & Pipe Retailers Association (IPCPR)
Chris McCalla
Legislative Director  

Looking for bullet points or help to craft a message to your local senator/congressman to UPHOLD the SCHIPs veto.

Going to http://capwiz.com/rtda/issues/alert/?alertid=10386901 and inputting your zip code will not only give you a list of representatives near you, but it will also give you bullet points appropriate to how the legislator had previously voted.

The time to act is now so don't wait. We think you'll find this tool from the IPCPR will assist you in knocking this down. SCHIP supporters are gearing up with a multi-million dollar TV campaign to get the uninformed electorate to pressure legislators who voted against the bill to change their minds and override the veto because "it's for the children".

We know that YOU know you need to contact your representatives about upholding the veto on the expansion of SCHIPs program by putting the tax burden on our backs.

Perhaps you have friends who are having a hard time getting past the "it's for the children"... Send them links to our video playlists to hear the truth about this tax and what it is really about!

http://www.youtube.com/view_play_list?p=A52E341856944523

Share the link and this message far and wide!

ACTION ALERT!

Call and Urge Your U.S. Representative
To Sustain President Bush’s Veto
Of the SCHIP Bill!

On October 3^rd, President Bush Vetoed the SCHIP Bill
With Excessive Cigarette and Tobacco Tax Increases

The Democrat Leadership in the U.S. House has Scheduled
A Vote to Try and Override the Veto on October 18^th

You Need To Call Their U.S. Representative Now and Urge Them to
Sustain the President’s Veto of the SCHIP Bill!

__________________________________

Call Either of the Following Toll-Free Numbers to Be Directly Connected with Your U.S. Representative’s Office:

1-877-857-8074 or 1-866-527-4494

CALLS ARE NEEDED TO ENSURE THAT
THESE UNFAIR TAX INCREASES ARE
NOT ENACTED INTO LAW

ACTION ALERT!

Call and Urge Your U.S. Representative
To Sustain President Bush’s Veto
Of the SCHIP Bill!

On October 3^rd, President Bush Vetoed the SCHIP Bill
With Excessive Cigarette and Tobacco Tax Increases

The Democrat Leadership in the U.S. House has Scheduled
A Vote to Try and Override the Veto on October 18^th

You Need To Call Their U.S. Representative Now and Urge Them to
Sustain the President’s Veto of the SCHIP Bill!

__________________________________

Call Either of the Following Toll-Free Numbers to Be Directly Connected with Your U.S. Representative’s Office:

1-877-857-8074 or 1-866-527-4494

CALLS ARE NEEDED TO ENSURE THAT
THESE UNFAIR TAX INCREASES ARE
NOT ENACTED INTO LAW

President Bush Vetoes SCHIP Legislation

This morning, President Bush vetoed H.R. 976, the bill passed by Congress to reauthorize and expand the State Children’s Health Insurance Program (SCHIP). In a press conference this morning, the President’s Press Secretary stated that the administration will work with Congress to ensure the neediest children are receiving health insurance coverage. In particular, the administration is focusing on children in families that have annual income of less than $41,300 which is 200% of the 2007 poverty level for a family of four. The President has always taken the position that he will expand the SCHIP program by $5 billion without raising taxes which constitutes a 20% increase in current spending on the program.

The leadership of the U.S. House has scheduled a vote to attempt to override the President’s veto for Wednesday, October 17^th. Please recall that the U.S. House voted 265 to 159 in favor of the final SCHIP bill which is 25 votes short of the 290 needed to override a presidential veto.

Call Your Representatives and Urge Them to Sustain the Veto

Don't rest on our laurels. You are strongly urged to call your U.S. Representatives and urge them to vote to sustain the President’s veto. One of the easiest ways to make this call is to dial one of the following two toll-free telephone numbers and you will be directly connected with your U.S. Representative’s office in order to leave your message with a staff person:

1-877-857-8074 or 1-866-527-4494

Representatives that voted against the SCHIP bill will be under a great deal of pressure to vote to override the President’s veto and they need support from you and your customers to sustain the President’s veto!

From the International Premium Cigar & Pipe Retailers Association (IPCPR)

Federal Legislative Update

Compromise Bill Moves Forward for Vote
Cigar Floor Stocks Tax Provision Removed

September 25, 2007-

A compromise bill for the State Children Health Insurance Program (SCHIP) funding was finalized late in the evening on Monday, September 24 with mixed news for the premium cigar and pipe industry. The Floor Stocks Tax provision on cigars that was originally in the legislation has been stricken. THERE IS NO FLOOR STOCKS TAX IN THE LEGISLATION!

However, the tax rate was reduced by only a fraction, from 53.12% to 52.988%, and the tax cap of $3 per cigar remains.

The compromised bill now goes to both the House of Representatives and the Senate for an up-or-down vote (members of Congress must vote either yes or no and no further amendments or changes may be added or made at this time.

Once the bill is most likely approved by both chambers of Congress, the legislation goes to the White House where President Bush remains adamant that he will veto the legislation. Following a presidential veto, Congress will most likely approve an extension of the current SCHIP program that expires September 30, relying on existing government healthcare money to fund the extension-the yet-to-be proposed extension will not rely on any tax increases. This extension will give Congress more time to create a bill that the president may be willing to sign.

Many have been involved in this fight, and we will continue working to protect members of our Association, notably Rocky Patel, Jeff Borysiewicz, a retailer from Corona Cigar, in Florida, David Berkebile, your association former president Lito Gomez of La Flor Dominicana, Marvin Samel of Drew Estate, Robert Levin of Ashton/Holt Distributors, Eric Newman of J.C. Newman, Alejandro Cuenca of Hoya de Nicaragua, and Jorge Padron. Due to the incredible efforts of these people the unfair treatment of the cigar industry was clearly brought to Congress' attention. Full, deserved credit goes to this group.

Though the comprise bill is far from what we need to protect our industry we have laid the groundwork for what may come at a later date regarding SCHIP funding relying on increased cigar taxes. We now have the tools in place to work toward a reasonable compromise on a livable tax.

IPCPR's federal lobbyists, Patton Boggs and Public Strategies-Washington, two premier lobby groups on Capitol Hill, and the Cigar Association of America have also been instrumental in this fight. Additionally, the manufacturing countries' governments are fully engaged through their embassies and continue lobbying their Washington, D.C. counterparts on the ramifications of this draconian tax increase, working toward our shared goals.

Thank you to all of you, our members, and your customers for the countless phone calls, emails, and faxes sent to your Congressmen and Senators. Congress now understands that the premium cigar and pipe industry will not stand idly by as they may have their way with our livelihoods and our industry. When this bill is vetoed, we look forward to working closely with Congress on a new bill that provides necessary healthcare funding for children while not driving an entire industry into extinction.

We will continue to keep you posted as this situation continues its legislative process.

Chris McCalla

Legislative Director

News from International Premium Cigar & Pipe Retailers Association (IPCPR)

International Premium Cigar & Pipe Retailers Association (IPCPR)

Federal Legislative Update

Congress Decides on Framework For Cigar Tax Bill

Senate Version of SCHIP will move forward

In an attempt to get the SCHIP legislation passed before the current program expires September 30, the House Democratic leadership has agreed to accept the Senate version of the legislation for the framework of a compromise bill. The Senate version, H.R. 976, currently proposes to increase the OTP excise tax rate on cigars to 53.12 percent with a $3 cap per individual cigar.

Determined, strategic lobbying continues of key Senate Finance committee members seeking amendments to the proposed legislation before it advances through the process. Of the amendments sought, we are working to have the floor stocks tax provision on cigars removed from the legislation. Additionally, we continue working for a much lower tax rate and cigar tax cap, one that is both reasonable and fiscally-acceptable for all of our retail members.

In addition to our lobbying efforts from our Association position, the Latin American-cigar producing countries also continue to lobby their counterparts in Washington, D.C., at this draconian tax increase will too have catastrophic consequences, specifically on the 3.5 million people, workers and their families, who directly rely on the handmade cigar industry.

The President remains adamant he will veto the Senate bill and it appears that there are not enough votes in the House to over-ride that veto. Following the potential veto, the political game begins as the Democrats face the choice of either keeping the issue alive for political purposes or entering into negotiations with the White House.

Our lobbyists and others heavily-involved in this tax fight view a presidential veto as the most likely end result.  We are leaving no stone unturned in protecting our members against this egregious tax increase and will continue lobbying Congress for these needed amendments.

We urge you to continue contacting the President and members of Congress via IPCPR's Legislative Action Center to oppose this federal cigar tax increase.

Thank you for your continued support.

Chris McCalla

Legislative Director

On July 19, 2007, the U.S. Senate Finance Committee passed legislation on a 17-4 vote to reauthorize and expand the State Children's Health Insurance Program (SCHIP) which includes significant increases in the federal tobacco tax rates. Here is a summary of the proposed tax rates (which include a floor tax for the difference between what has already been paid and what will be due for items that retailers have already purchased):

• Large cigars are taxed at the rate equal to 53.13 percent of the manufacturer’s or importer’s sales price but not more than $10.00 per cigar.
• Small cigars are taxed at the rate of $50.00 per thousand (the same rate applied to cigarettes).Pipe tobacco is taxed at the rate of $2.8126 per pound, and proportionately at that rate on all fractional parts of a pound.
• Snuff is taxed at the rate of $1.50 per pound, and proportionately at that rate on all fractional parts of a pound.
• Chewing tobacco is taxed at the rate of $0.50 per pound, and proportionately at that rate on all fractional parts of a pound.
• Roll-your-own tobacco is taxed at the rate of $8.9286 per pound, and proportionately at that rate on all fractional parts of a pound. The rate for roll-your-own tobacco is intended to approximate the rate for small cigarettes.
• Cigarette papers are taxed at the rate of $0.0313 for each 50 papers or fractional part.
• Cigarette tubes are taxed at the rate of $0.0626 for each 50 tubes or fractional part.
• Small cigarettes are taxed at the rate of $50.00 per thousand ($1.00 per pack).
• Large cigarettes are taxed at the rate of $104.9999 per thousand.

So, let's say the wholesale price on a cigar is $2, the tax on that cigar would be $1.06. For a $5 cigar, you are looking $2.66 in taxes. For a super premium cigar that has a wholesale cost of $20, the tax alone would be capped at $10. So now, a cigar that would have cost the consumer about $40 now will run $60! (assuming keystone pricing by the retailer)

This has GOT to stop!

I know I've blogged about this before but the time is coming close so keep the pressure up! I don't know if I could put it better. The folks over at CigarCyclopedia.com has posted the following to his mailing list:

You must act now!
The Finance Committee of the United States Senate is proposing an expansion of the State Children’s Health Insurance Program (SCHIP) solely through higher tobacco taxes that will have a draconian impact on the cigar industry.
Under the current proposal, the large cigar tax rate would increase 156.4% (from 20.719% to 53.13% of the manufacturer’s selling price) and the current tax cap of around $0.05 per cigar would increase an astounding 20,413% to $10 per cigar. All large cigars would effectively be taxed at 53.13% of the manufacturer’s selling price. In all of the Internal Revenue Code, no other product is subject to an excise tax that approaches this level. The little cigar tax would increase 2,635% – to $1,828 per 1,000 to $50 per 1,000. To compound the injury, a floor stocks tax would be assessed on all products in inventory.
The full Senate is expected to consider the legislation next week, but possibly sooner. We need you to act now and immediately contact your U.S. Senators. A consumer should only contact his own Senators because Senators are most responsive to their own constituents.
Call, fax or e-mail the offices of your own U.S. Senators, give them your name and address and ask that they vote to oppose the punitively high cigar tax increases in the State Children’s Health Insurance Program legislation.
Click here for a contact list of U.S. Senators with telephone numbers and electronic mail addresses. Every call counts, because almost all elected officials will open a new file on a matter if they receive 10 or more contacts of any kind.

Don't wait, act NOW!

Here is a posting from Lew Rothman on the CigarFamily.com website:

Everyone and I mean everyone that even smokes a cigar now and then has to be on alert for messages from all [bricks & mortar] smoke shops AND Internet vendors AND Manufacturers in the next few days regarding the proposed new tax on tobacco products:
“The Senate Finance Committee has scheduled a markup on Tuesday, July 17 on legislation dealing with the State Children's Health Insurance Program (SCHIP). The measure is expected to be reported out of committee. Funding would be almost totally via higher taxes on tobacco products. The cigarette tax will increase by $.61 to $1 per pack effective after December 31, 2007. Other tobacco products would be taxed as follows: large cigars – 53.13% of mfr's or importer's sales price but not more than $10.00 per cigar.”
In addition, there will be a floor stocks tax on tobacco products manufactured in the U.S. or imported into the U.S. which are removed before January 1, 2008 and held on that date for sale. The person holding the product on January 1, 2008 is liable for the tax to be paid on or before April 1, 2008.
YES! You read that right! $10.00 PER CIGAR, plus whatever your local state tax is. The people in Washington have absolutely no clue about the cigar business. Their sole focus is on cigarettes and we are about to get dragged along with it.
Not only will this put virtually every manufacturer, wholesaler, and retailer out of business, it will also devastate the economy of Nicaragua, Honduras, The Dominican Republic and have a significant impact on Puerto Rico, Indonesia, Costa Rica, Panama, Brasil, and Peru. (Whereupon, I’m sure the USA will be called upon to provide additional relief funding!).
You and everyone else who has any thoughts about continuing to smoke cigars or grow, sort, manufacture, distribute or retail cigars need to make a concerted phone, mail, and e-mail bombardment of Congress very shortly. Hopefully, someone more adept at interpreting this new tax law will supply the proper language for this protest.
Be ready and be vocal, and be outraged because this tax is definitely outrageous. It is my firm belief that if passed as it stands right now the entire industry will collapse prior to April 1, 2008 (appropriately named April Fools Day for the Fools we have running the government right now) because no one will have the finances to pay the tax on their inventory.

Well, smokers here in California successfully (but narrowly) avoided an overly onerous tax burden last fall but it appears that this tax has reared it's head at the federal level and we need ALL of you out there to hound your Senators and Representatives at the federal level to knock this one down.

Numbers provided by NATO

Now through end of July EVERYONE who enjoys a cigar, pipe (or heaven forbid cigarettes) needs to be hounding their elected federal officials to oppose this unfair taxation.

In an attempt to expand funding for the State Children's Health Insurance Program (SCHIP) the feds are proposing to increase the federal excise tax on tobacco products. This amounts to an unfair taxation on approximately 10% of the population to bear the burden that should instead be shared across the entire base of taxpayers!

The arguments to point out to your representatives (in our area that would be Senator Dianne Feinstein, Senator Barbara Boxer and Representative John Campbell) are as follows:

•  This tax should be broad-based and not placed on about 10% of the American public, many of whom are at the lower end of the economic spectrum (pipe smokers and RYO consumers are more often than not retirees on fixed incomes and cigarette consumption is higher among lower wage-earners than higher-earning individuals)
• The likelihood of this tax to crush many small businesses is extremely high. Most tobacconists are Mom and Pop businesses that operate on a razor thin margin and a increase in the cost of product will force them to either eat the difference or suffer a reduction in sales. California has seen this in the past that attempts to raise revenue by taxing tobacco forced many small businesses around the state to shutter their operations.
• As borne out by past-experience, the taxes generated by the higher rates will NOT NECESSARILY increase taxes collected. Quite the opposite has happened as consumption of legal tobacco products caused a decrease in collected tax revenues. California voters recognized this last fall and narrowly defeated Proposition 86 which would have accomplished the same thing under the guise of "helping the children."
• As more people attempt to avoid the taxation, a growing black-market will emerge. It is no wonder that ALL of California's law enforcement agencies were against Prop. 86. They recognized that this growing black market demand would not only increase the amount of theft (usually on very large scales) but more importantly that organized crime, always ready to take advantage of these types of situations, will rush in to fill the void with either stolen or illegally imported tobacco products.

Make your voice be heard and stop this insane tax! They figured if they can't snow the voters so now they'll attempt to snow the legislators. In a politicians mind, a sound bite showing them "supporting the children" is going to play much better on TV, radio and print than them standing up to protect a small minority of the population from this unfair burden. It is up to us to SHOW them that we are a force to be reckoned with and listened to!

The Airplane Owners and Pilot's Association (AOPA) believes that user fees would devastate the U.S. economy by impacting general aviation flying for agricultural purposes, medical evacuation, and other missions essential to the country's safety and well-being.

While the airlines may want user fees, it isn't because fees would be good for their passengers. That's why AOPA went public with anti-user fee TV commercials this holiday season.

http://video.google.com/videoplay?docid=1750358911738140236&q=aopa

You can also visit the AOPA's GA Serving America Web site to learn more about why the FAA funding debate is important to everyone.

Please pass along the following link to everyone you know to help fight the upcoming GA User's Fee before it sneaks its way into our lives!

Sorry this isn't about Tobacco Taxes, but this is important that everyone pay attention to this appeal!

Six states had tobacco-related questions on the Election Day ballot and only California and Missouri proved to be rays of hope. The remaining ones either increased taxes on Cigars/Pipes and cigarettes or curtailed smoking in various locations. A summary of the final results from yesterday’s elections are listed below:

Arizona:

Question 201 Passed: Prohibits smoking in most workplaces and increases the cigarette tax by 2 cents a pack. Allows smoking in tobacco stores, veterans and private clubs, designated hotel rooms and outdoor patios of restaurants and bars. Because of it's more restrictive nature, this question was opposed by retailers in Arizona.
Question 203 Passed: Increases the tax on large cigars by $.088/cigar. Raises the tax on smokeless and smoking tobacco by $.09/ounce, increases the tax on little cigars by $.178/pack and raises the cigarette tax (however, the ballot question stated the cigarette tax would increase 8/10th’s of a cent per pack when the amount intended was 80 cents per pack; a determination on the amount of the increase has not been made).
Question 206 Failed: This measure, supported by retailers, would have allowed smoking in more hospitality establishments than Question 201 but it did not pass.

California:

Proposition 86 Defeated: This question would have increased cigar and pipe tobacco taxes to approximately 135% while cigarette taxes would have gone up by $2.60/pack. We are extremely pleased to see this poorly written proposition die an ugly death 

Missouri:

Question 3 Defeated: This question would have increased cigar and pipe tobacco taxes by 20% and cigarette taxes by 80 cents per pack. Another victory! 

Nevada:

Question 4 Defeated: This less restrictive smoking ban question was not passed despite the support of NATO and many others.
Question 5 Passed: This question passed and does not allow smoking in most public places and hospitality establishments; smoking is allowed in casinos and hotel rooms. Imagine no longer being able to smoke in bars and restaurants in Sin City any longer. Looks like they are taking out the Sin... 

Ohio:

Question 4 Defeated: This less restrictive smoking ban question was not passed.
Question 5 Passed: This question passed and does not allow smoking in most public places and hospitality establishments; smoking is allowed in retail tobacco stores, hotel rooms, non-profit private clubs (veterans clubs, etc.) and outdoor patios of restaurants and bars.

South Dakota:

Measure 2 Passed: This question will increase taxes on cigars and pipe tobacco to 35% while cigarette taxes go up by $1.00 per pack to $1.53 per pack. Yet another defeat by those who would follow the historical choice of taxing the small population of smokers to pay for programs that benefit everyone.

We had a great turn out on election day of like-minded folks bent on denying those who'd wish to unfairly tax a small portion of the population for their gain. Undoubtedly without their help to defeat the massive marketing machine pushing this flawed proposition, we would have all been weeping in our cereal this morning. Thanks All!

One thing is for certain. The Tobacco Barn has got some great customers (many who stopped in tonight to watch the news and catch the early poll results) who all got a special election night cigar for their troubles.

This Dominican, aged, hand-rolled Churchill cigar with a natural wrapper carried a specially crafted band just for this purpose by the artist who does all of the private-labels we do for customers.