A Modest 20,000 Percent Tax Increase

By July 18, 2007Health Care

From the St. Petersburg Times:

Eric Newman punches the numbers on his calculator and gapes at the results one more time.

It’s no mathematical error: The federal government has proposed raising taxes on premium cigars, the kind Newman’s family has been rolling for decades in Ybor City, by as much as 20,000 percent.

As part of an increase in tobacco taxes designed to pay for children’s health insurance, the nickel-per-cigar tax that has ruled the industry could rise to as much as $10 per cigar.

Cigar smoking is legal. Many people gain pleasure from smoking cigars. The effects of non-inhaled cigar smoke are less damaging to one’s health than cigarette smoke. So is there any reasonable justification for this industry-destroying revenue grab? (And wasn’t the tobacco settlement supposed to settle these revenue and price issues once and for all?)

Come to think of it, confiscatory excise taxes on an entirely discretionary consumer good, imposed by a ravenous and unresponsive distant government — has historical resonance, doesn’t it? Certainly it would for the 1,000 people employed in the Tampa-area cigar industry.

(Hat tip: SayAnythingBlog).

Leave a Reply