20,000 Percent Tax Increase???

[mgoofy24]

As stated earlier, and seems to have gotten lost in this thread, is that this bill will never pass. With the veto-gate system that we have set up in our lawmaking bodies, this bill will certainly never get anywhere. It fails, what my legislation/statutory interpretation professor liked to call, the "laugh test."

Seriously, the main push of this bill is to increase the tax on cigarettes. 39 cents to $1 a pack (or that's how my tired mind read the article). This is what the proposer of the bill wanted to come out of this, the cigar tax is along for the ride and will most likely be cut out, or cut significantly down before this ever sees a vote.

What caught my eye the most in this article is that our president wants to veto this bill, not because of the tax on cigarettes, not because of the tax on cigars, but because he doesn't want to federally fund health care to children who are non-indigent........ Yay us. I feel so proud to be part of this country sometimes...... sigh.

 

[BarryR]

For those of you who are unhappy about how much we pay in taxes, you may want to consider how much of it goes to defense spending. So, for example, we can start wars on flimsy evidence and then spend 500 billion dollars over 4 or 5 years. When the cold war ended, we enjoyed somewhat of a peace dividend as limited cuts were made to defense spending. Now, some of those votes are being used against those legislators. A great way to cut our taxes would be to stop spending enormous amounts of money on the military.

 

[Rustylee]

Welcome to the world of the Democratically controlled Congress. This is actually a good thing. It shows the sheeple what it will be like when they control the Congress and the White House.

Now if the Republicans would only grow some of those hangy down things and learn to lead...


Rusty <><

 

[BarryR]

Welcome to the world of the Democratically controlled Congress. This is actually a good thing. It shows the sheeple what it will be like when they control the Congress and the White House.

I have my qualms with the Democrats as well, but the 'sheeple' have seen what happened with Rebuplican control of Congress and the White House, and it ain't impressive.

 

[zachster]

What caught my eye the most in this article is that our president wants to veto this bill, not because of the tax on cigarettes, not because of the tax on cigars, but because he doesn't want to federally fund health care to children who are non-indigent........ Yay us. I feel so proud to be part of this country sometimes...... sigh.

Well, to be fair, he opposes the expansion of the program from its current $5Billion to over $35Billion; that's a pretty big jump that makes SCHIP go from an aid program to states to help fund some health care supplements to a fully funded entitlement, with all the potential for becoming another government boondoggle that actually helps big pharmaceutical companies more than anyone.

 

[ouch]

For those of you who are unhappy about how much we pay in taxes, you may want to consider how much of it goes to defense spending. So, for example, we can start wars on flimsy evidence and then spend 500 billion dollars over 4 or 5 years. When the cold war ended, we enjoyed somewhat of a peace dividend as limited cuts were made to defense spending. Now, some of those votes are being used against those legislators. A great way to cut our taxes would be to stop spending enormous amounts of money on the military.

I agree. We should stop spending any money on the military. After all, who would want to do us any harm?

 

[BarryR]

I agree. We should stop spending any money on the military. After all, who would want to do us any harm?

I'm not suggesting that we should have anything less than the best equipped army in the world, but rather that we could do so spending less than we are, and that we squandered a fortune on the invasion of Iraq which (IMHO) has made us less safe.

Eisenhower himself (not a bleeding heart dove) warned of the power of the Military-Industrial complex. Granted people want to hurt us, but the largest army in the world didn't stop 11 terrorists from flying jets into the WTC, did it? The terrorists want to 'hurt' Europeans too, but they manage to spend far less than us on defense. (I know, you're going to say that's because were there to protect them, but no one appointed us as cops of the world and they, for the most part, have very capable armies as well).

 

[ouch]

we squandered a fortune on the invasion of Iraq

No argument there.

 

[Lynchmeister]

For those of you who are unhappy about how much we pay in taxes, you may want to consider how much of it goes to defense spending. So, for example, we can start wars on flimsy evidence and then spend 500 billion dollars over 4 or 5 years. When the cold war ended, we enjoyed somewhat of a peace dividend as limited cuts were made to defense spending. Now, some of those votes are being used against those legislators. A great way to cut our taxes would be to stop spending enormous amounts of money on the military.

+1 and a shame for too many reasons to list.

 

[scorpion]

I'm still trying to get my mind to process this article.

Insanity?

I'm not for the increase, but you've misunderstood the proposal. Go to the senate's website to read the proposal for yourself - not the biased takes from the wingnuts. I think the pertinent passages are on the second page. My buddy runs a cigar shop and asked me to look at it for him. Certainly it is not good for the industry and taxes could double on many products, but taxes on cigars are most certainly NOT going up 20,000 percent or anywhere near it.

Here's the proposal...

http://finance.senate.gov/sitepages/leg/LEG 2007/Leg 110 071307 JCT.pdf

They are talking about taxing cigars at 50% instead of 20% - too much to be sure, but certainly not anywhere near a 20,0000 increase. Anyway, read it for yourself and tune out the biased noise.

 

[zachster]

Certainly it is not good for the industry and taxes could double on many products, but taxes on cigars are most certainly NOT going up 20,000 percent or anywhere near it.

Here's the proposal...

http://finance.senate.gov/sitepages/leg/LEG 2007/Leg 110 071307 JCT.pdf

They are talking about taxing cigars at 50% instead of 20% - too much to be sure, but certainly not anywhere near a 20,0000 increase. Anyway, read it for yourself and tune out the biased noise.

From the propsal:

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;

At present, all cigars are subject to a nickel-per-cigar federal tax. With some cigars possibly taxed at $10 per cigar, as per the proposal, that would be a 20,000 percent increase in tax for those cigars.

 

[scorpion]

Zachster -

Not to put too fine a point on it, but you're wrong. My link states the current system and the proposed new one...

20.719 percent of importer's sales price with a cap is what they charge on Large cigars (large cigars are those weighing more than three pounds per 1000) - these are the ones we commonly think of as 'cigars'. Their taxes would go up, but not even in the same hemisphere as 20,000 percent. In fact the proposal calls for just over 50&#37; (instead of 20.719 percent) on large cigars - a big increase to be sure... more than double even. Why exaggerate?

The biggest increase is for 'small cigars' that have the same weight distinction per thousand as cigarettes. Most of us call these cigarillos or something similar and they generally sold in pack just like cigarettes. If you look at the proposal closely, they are trying here to duplicate exactly the tax for cigarettes - $50 per thousand, or, $1 per pack. This is where the sky is falling crowd got their math from I suppose.

It's intellectually dishonest and willfully ignorant to take the math from ONE part of the proposal and apply it to a different part, i.e., large cigars - what most of us are worried about I assume - when it doesn't apply at all - it's not even anywhere close. The tax would a bit more than double - certainly it's several orders of magnitude off from 20,0000%.

I'm not for this tax, but I don't think it serves anyone well to exaggerate. It's counterproductive to the cause in the long run. The truth is your $10 honduran cigar that used to cost you $12... would now cost you around $15 or so. That stinks, but it ain't 20,000 %.

 

[slcsteve]

I smoke the occasional cigar or three and find it difficult to generate any sympathy for those of us that can afford expensive cigars. If you can shell out $12 than you probably handle $15. If not, smoke cheaper cigars or quit altogether. If you don't smoke em' you won't pay the tax. There sure are more important issues to be concerned about - at least for me.

 

[mgoofy24]

I smoke the occasional cigar or three and find it difficult to generate any sympathy for those of us that can afford expensive cigars. If you can shell out $12 than you probably handle $15. If not, smoke cheaper cigars or quit altogether. If you don't smoke em' you won't pay the tax. There sure are more important issues to be concerned about - at least for me.

/agreed...except I don't smoke 'em

 

[scorpion]

Just to clarify. There is some validity to the issue. Taxes would go up. And they would go up markedly for the 'small' cigar market, but as I understand it, that's a smaller part of the market and it was a segment that was taxed at a level far below its cousins cigarettes and large cigars. Still the increase overall would stink for cigar smokers.

 

[Shablabar]

Ron Paul, please get in and dismantle this garbage brick by brick!!!

I'm sorry... but I just can't take seriously anyone who wants to dismantle the Fed and go back to a gold standard. Getting rid of a central bank and expecting inflation, interest rates, and unemployment to stay under control is tantamount to taking forty dogs in heat off their leashes and expecting them to walk in an orderly file down the sidewalk. Libertarians appear to be too busy dreaming up the love-children of Ayn Rand and Milton Friedman to realise just how important many modern government programs and agencies are. Some times I think that Liberalism won its battles so thoroughly in the mid-twentieth century that many people have forgotten that those battles happened in the first place. While I agree that the government plays an overly large role in North American economies, and I would support scaling back many programs and reining in public spending, crazy ideas like knocking down Medicare, the Fed, and the FDA will never fly in my books.

 

[JonEdangerousli]

Zachster -

Not to put too fine a point on it, but you're wrong. My link states the current system and the proposed new one...

20.719 percent of importer's sales price with a cap is what they charge on Large cigars (large cigars are those weighing more than three pounds per 1000) - these are the ones we commonly think of as 'cigars'. Their taxes would go up, but not even in the same hemisphere as 20,000 percent. In fact the proposal calls for just over 50&#37; (instead of 20.719 percent) on large cigars - a big increase to be sure... more than double even. Why exaggerate?

The biggest increase is for 'small cigars' that have the same weight distinction per thousand as cigarettes. Most of us call these cigarillos or something similar and they generally sold in pack just like cigarettes. If you look at the proposal closely, they are trying here to duplicate exactly the tax for cigarettes - $50 per thousand, or, $1 per pack. This is where the sky is falling crowd got their math from I suppose.

It's intellectually dishonest and willfully ignorant to take the math from ONE part of the proposal and apply it to a different part, i.e., large cigars - what most of us are worried about I assume - when it doesn't apply at all - it's not even anywhere close. The tax would a bit more than double - certainly it's several orders of magnitude off from 20,0000%.

I'm not for this tax, but I don't think it serves anyone well to exaggerate. It's counterproductive to the cause in the long run. The truth is your $10 honduran cigar that used to cost you $12... would now cost you around $15 or so. That stinks, but it ain't 20,000 %.

I certainly hope your buddy who owns the cigar shop doesn't rely on you for business-critical analysis. From your link:

Cigars weighing more than three pounds per thousand (&#8220;large cigars&#8221 are taxed at the rate equal to 20.719 percent of the manufacturer&#8217;s or importer&#8217;s sales price but not more than $48.75 per thousand;
​

This is the reason that your math teachers made you do word problems. It requires you to reason through the problem. Let's break it down so you can determine where you went wrong:

Cigars weighing more than three pounds per thousand (&#8220;large cigars&#8221 are taxed at the rate equal to 20.719 percent of the manufacturer&#8217;s or importer&#8217;s sales price

​

It appears you stopped here. Unfortunately if you are going to be intellectually honest you can't stop here. I'm a bit confused as to why you stopped here, after all it isn't like they went directly to a new paragraph, or even stopped the sentence. Continuing on:

but not more than $48.75 per thousand; (italics, bold, underlined mine)

​

POP QUIZ: Current law allows for that $10 Honduran cigar to be taxed at:

A) $10 * 0.20719 = $2.0719

B) $48.75 / 1000 = $0.04875

C) $10.00

D) $10 * 0.5313 = $5.313
​

The correct answer is (B). (A) is incorrect since $2.0718 IS MORE THAN $0.04875. (C) is incorrect because it it is the proposed "maximum". (D) is incorrect because this it what the actual proposed tax would be.

It appears that "the sky is falling crowd" understands middle school math.

At first glance I was going to say "I think you owe "the sky is falling crowd" an apology for your " It's intellectually dishonest and willfully ignorant"" comment. But I didn't stop reading your comment right there. You continued with "to take the math from ONE part of the proposal and apply it to a different part". So, since "the sky is falling crowd" didn't piecemeal the math, your accusation and insult do not hold. So no apology for the insult is necessary.

 

[JonEdangerousli]

I smoke the occasional cigar or three and find it difficult to generate any sympathy for those of us that can afford expensive cigars. If you can shell out $12 than you probably handle $15. If not, smoke cheaper cigars or quit altogether. If you don't smoke em' you won't pay the tax. There sure are more important issues to be concerned about - at least for me.

I think you may have inadvertently stumbled upon a very important point.

Do you have children?

 

[JonEdangerousli]

The terrorists want to 'hurt' Europeans too, but they manage to spend far less than us on defense. (I know, you're going to say that's because were there to protect them, but no one appointed us as cops of the world and they, for the most part, have very capable armies as well).

Two points:

1. NATO
2. "Capable armies" vs. "History of the 20th Century"

 

[scorpion]

JonEdangerousli

"I certainly hope your buddy who owns the cigar shop doesn't rely on you for business-critical analysis."

No - he sells large cigars. He relies on me to help him find the source material so he can read it for himself when all the bloggers are trying to tell him his product's taxes are about to go up by 20,000&#37;. Which they most certainly are not going to do - or anywhere near it - which is the entire point. Continue with the hair splitting while ignoring the thread's titular question;

20,000% increase?

Answer: No.

Bad news for cigar smokers and the small business owners who run the shops? Certainly. But that's no reason to spread disinformation. I do appreciate that you read from the source instead of relying on the bloggers - whom I read also. they call out things that warrant a closer look. A valuable service. But they usually have an axe to grind and we should all do our own research - sometimes you discover things aren't necessarily as advertised.