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NEWS

Smokers fuming about proposed tax increase on cigars

Scott Hilyard

Lucas Woith doesn’t buy the argument that jacking up federal taxes on premium cigars is going to keep kids away from tobacco products.

"When’s the last time you saw a 16 year old puffing a $15 Cohiba," said Woith, an enthusiastic cigar smoker and the executive producer of the Midwest Cigar Summit, an event to be held next month at Hickory Grove Park in Dunlap. "Increasing the tax on premium cigars won’t do much in terms of stopping children from smoking."

A proposal before Congress has cigar smokers fired up across the United States. One bill in the House and one in the Senate seek to fund a federal program that provides health coverage for sick, uninsured children with a substantial new tax on tobacco products, including cigars.

Cigarette smokers are accustomed to tax increases, but the federal tax on cigars has remained stable at about a nickel a cigar. The Senate proposal would add 61 cents to a pack of cigarettes, but it would also increase the rate from five cents to 53 percent of the wholesale value of the cigar, with a cap of $10 a smoke. The average tax on a premium cigar would be about a dollar. A cigar would have to sell for upwards of $50 to reach the $10 cap.

"The law would put me out of business," said Mary Ann Work, the owner of Smoking Pleasures tobacco shop in the Twin Towers in Downtown Peoria. "I’d lose customers."

She handed out petitions for customers to sign and express to their senators their displeasure about the tax proposal.

"It’s not going to pass I don’t think," Work said. "I think they’re just setting something up for somewhere down the road."

Part of the philosophy behind the proposal is to tax out of the price range of young people a product that can cause health problems. If cigars and cigarettes cost too much, children won’t buy them, try them, get hooked on them and require health care because of them later in life.

In a return letter to Woith’s letter of protest about the tax hike, Sen. Dick Durbin, D-Ill., wrote why he supported the tax hike.

"Because young people have less disposable income and are not likely to be addicted yet, they are even more likely than adults to quit smoking after a tax increase," Durbin wrote.

Cigar lover Perry Johnson of East Peoria sees the current proposal as an example of a larger trend.

"I do not dispute that smoking has negative health ramifications, they are well known. However, it seems that bashing smokers is the politically convenient and popular thing to do at the moment, and that there is little smokers can do to effectively advocate their rights," Johnson said. "I think the fair thing to do would be to find a compromise where both sides could live together peaceably. However many anti-smoking advocates take the uncompromising tone that their position must prevail — period — and offer little fact-based proof to support that position."

If the tax increase becomes law, Johnson said he would probably just spend the extra money and keep on smoking good cigars.

The issue gained some national traction in July when conservative radio talk show host Rush Limbaugh, maybe the most famous cigar smoker in the country, took aim on the tax on his program. He referred to the proposal as a "whopping 20,000 percent increase on the tax on cigars." The figure galvanized the smoking community against what it saw as the blatant unfairness of the proposal — some called worse than what led to the Boston Tea Party protest in 1773 — but even Woith recognized the 20,000 percent figure as fuzzy math.

While it’s true the current nickel tax would rise to a $10 cap — which accounts for the 20,000 percent increase — only the most expensive cigars on the market cost $10 or more.

"There has been a lot of bellyaching going on amongst cigar smokers saying that this $8 cigar I’m smoking will become $18. That’s not true," Woith said. "The new tax is 53 percent of the wholesale price. For a cigar to have the $10 tax on it, it would have to have a wholesale price of roughly $20, meaning it retails for between $40 and $50. Most cigars available in the United States aren’t that expensive,."

Woith said about $1.50 or $2 would be added to the cost of a cigar that costs a consumer $8.

Work thought the tax would do the opposite of what the government intended.

"They’d be shooting themselves in the foot because people would just quit or find cigars some other way," she said. "Then they wouldn’t raise the revenues they were hoping for."

Scott Hilyard can be reached at (309) 686-3244 or shilyard@pjstar.com.