Don’t be fooled, this isn’t just about cigarette smokers no matter what the popular press will tell you. It isn’t “about the children” as the sound bites might indicate. What it is about is the unfair taxation of a small portion of the population to fund a program that affects ALL of the citizens of the US.
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.
So don’t sit by idly and watch your pipe tobaccos get taxed by an increase of 156.4%, write, or better yet, call your local congress person or senator and let them know that this is just plain WRONG!