AteUp
07-22-2007, 10:12 PM
http://www.chicagotribune.com/news/nationworld/chi-cigarsjul20,1,2189413.story
Taxing times for cigar buffs
Already chased from most establishments, many devotees are burning mad over a huge proposed tax on their smokes
http://www.chicagotribune.com/media/photo/2007-07/31318910.jpg
Tribune photo by Terrence Antonio James, July 19, 2007
By Tim Jones | Tribune national correspondent
11:25 AM CDT, July 20, 2007
Now is the time for all good men -- and even a few women -- to come to the aid of ... the cigar.
That's the clarion call from outraged defenders of cigardom, where penny-pinching Stogie puffers and money-to-burn aficionados of $75 Graycliffs are in high dudgeon over a proposed whopping boost in the federal cigar tax, to as much as $10 per cigar.
Almost 90 years after Vice President Thomas Marshall declared that "What this nation needs is a good 5-cent cigar," the Senate Finance Committee on Thursday emphatically said the nation needs a big tobacco tax hike -- the biggest portion on cigarettes -- to fund a $35 billion expansion of a health insurance program for poor children.
The mounting furor over the proposed cigar tax boost may prove to be this summer's sound and fury because President Bush has twice threatened to veto the bill if it reaches his desk. Even if that is an empty threat, the measure, which would raise the cigarette excise tax by 61 cents to $1 per pack and remove the ceiling on the 5-cent-per-cigar tax, still has to work its way though both houses of Congress, and changes would not be surprising.
But at a time when states have repeatedly raised taxes on cigarettes, the focus on the cigar tax has put the spotlight on a market that used to be defined by Winston Churchill, truck drivers and corporate fat cats in three-piece suits.
That image began to change in the early 1990s, coinciding with the launch of Cigar Aficionado, a glossy magazine whose cover regularly features the New Age cigar celebrity: Arnold Schwarzenegger, Pierce Brosnan, Antonio Banderas, Demi Moore, Sharon Stone.
"In 1992, the axiom in the tobacco industry said a man smoked his first cigar when he was 40," said Gordon Mott, executive editor of Cigar Aficionado. "In the ensuing cigar boom, a lot of young professionals in their 20s started smoking cigars."
These new smokers, Mott said, "tend to be better-educated and more affluent."
And, with sales dominated by cigars selling for $5 to $15 per smoke, these younger smokers are also able to pay a higher tax. Comedian George Burns once quipped, "If I paid $10 for a cigar, first I'd make love to it, then I'd smoke it."
The issue here is what level of taxation is fair.
"It's time to pick up the phone and to fight for your right to have a cigar at a price you can afford," wrote cigar blogger David Savona earlier this week. "It's bad enough we've been pushed out of nearly every spot in the country to smoke our cigars. ... This latest attack can't be allowed to pass without cigar smokers voicing their outrage."
The approach of the bill's supporters is consistent with years of legislative efforts to discourage smoking by raising the price of smokes and using revenue to pay for health initiatives. Daniel Smith, president of the American Cancer Society's sister advocacy organization, the American Cancer Society Cancer Action Network, hailed the committee's action, calling it a "victory for public health that would both discourage youth and adults from smoking and provide much-needed health care for millions of children."
Money from the tax hikes would go to the State Children's Health Insurance Program, which subsidizes insurance for children and some adults whose income is too high to qualify for Medicaid but too low to pay for private insurance. Some opponents of the tax said Bush will have a difficult time explaining a veto that would deny children health insurance. Others argue the tax approach is misguided.
Rush Limbaugh, the radio talk-show host and cigar smoker, thundered away at the tax during a broadcast this week, asking: "Why should cigar smokers have to do it? What do kids eat? They eat vanilla ice cream, they eat Doritos, they eat Coke and Pepsi and 7-Up and whatever. ... I don't know what they do, but make the parents of these kids, every time they're buying a Snickers, raise the tax on a candy bar five bucks."
At Hubbard State Cigar Shop, a cozy Near North Side tobacco shop with two overstuffed chairs near the front window, hotelier Pradeep Raman, said he agrees with the principle of expanding health coverage for children but feels the proposed tax hike is excessive.
Raman, 30, was smoking a No. 3 Davidoff, which cost almost $19. "This might cost me $29," said Raman, who's been smoking cigars for seven years.
Cigars represent about 2 percent of the tobacco business in the U.S., a drop from a century ago, when nearly half of American smokers chose cigars. Cigar production has always been labor-intensive, which is one reason why cigarettes soon dominated the market. Still, cigar sales have grown in recent years, Mott said.
"Frankly, that was against all expectations," he said.
The proposed tax increase has cast a pall over the industry, Mott said. Mike Perales, an independent cigar representative who deals with Chicago retailers, said if the high tax level is enacted, that will encourage a black market for cigars.
"People will smuggle them in or figure out a way to buy them offshore," Perales said. "They're trying to fix a [health insurance] problem that is much bigger and complicated, and they're trying to do it by taxing what's easiest to tax."
Robust flavor
*U.S. cigar sales rose from 3.9 billion in 2000 to 5.3 billion in 2006.
*Mike Ditka is one of Chicago's most famous cigar smokers. And his restaurant just off Michigan Avenue, Mike Ditka's Chicago, offers a cigar bar with a number of quality cigars.
*Last year, the Cohiba Behike was introduced, described as the world's most expensive cigar. Price for a case of 40: $18,000.
*Cigars improve with age if stored properly (in a humidor at 70 degrees and 70 percent humidity).
Taxing times for cigar buffs
Already chased from most establishments, many devotees are burning mad over a huge proposed tax on their smokes
http://www.chicagotribune.com/media/photo/2007-07/31318910.jpg
Tribune photo by Terrence Antonio James, July 19, 2007
By Tim Jones | Tribune national correspondent
11:25 AM CDT, July 20, 2007
Now is the time for all good men -- and even a few women -- to come to the aid of ... the cigar.
That's the clarion call from outraged defenders of cigardom, where penny-pinching Stogie puffers and money-to-burn aficionados of $75 Graycliffs are in high dudgeon over a proposed whopping boost in the federal cigar tax, to as much as $10 per cigar.
Almost 90 years after Vice President Thomas Marshall declared that "What this nation needs is a good 5-cent cigar," the Senate Finance Committee on Thursday emphatically said the nation needs a big tobacco tax hike -- the biggest portion on cigarettes -- to fund a $35 billion expansion of a health insurance program for poor children.
The mounting furor over the proposed cigar tax boost may prove to be this summer's sound and fury because President Bush has twice threatened to veto the bill if it reaches his desk. Even if that is an empty threat, the measure, which would raise the cigarette excise tax by 61 cents to $1 per pack and remove the ceiling on the 5-cent-per-cigar tax, still has to work its way though both houses of Congress, and changes would not be surprising.
But at a time when states have repeatedly raised taxes on cigarettes, the focus on the cigar tax has put the spotlight on a market that used to be defined by Winston Churchill, truck drivers and corporate fat cats in three-piece suits.
That image began to change in the early 1990s, coinciding with the launch of Cigar Aficionado, a glossy magazine whose cover regularly features the New Age cigar celebrity: Arnold Schwarzenegger, Pierce Brosnan, Antonio Banderas, Demi Moore, Sharon Stone.
"In 1992, the axiom in the tobacco industry said a man smoked his first cigar when he was 40," said Gordon Mott, executive editor of Cigar Aficionado. "In the ensuing cigar boom, a lot of young professionals in their 20s started smoking cigars."
These new smokers, Mott said, "tend to be better-educated and more affluent."
And, with sales dominated by cigars selling for $5 to $15 per smoke, these younger smokers are also able to pay a higher tax. Comedian George Burns once quipped, "If I paid $10 for a cigar, first I'd make love to it, then I'd smoke it."
The issue here is what level of taxation is fair.
"It's time to pick up the phone and to fight for your right to have a cigar at a price you can afford," wrote cigar blogger David Savona earlier this week. "It's bad enough we've been pushed out of nearly every spot in the country to smoke our cigars. ... This latest attack can't be allowed to pass without cigar smokers voicing their outrage."
The approach of the bill's supporters is consistent with years of legislative efforts to discourage smoking by raising the price of smokes and using revenue to pay for health initiatives. Daniel Smith, president of the American Cancer Society's sister advocacy organization, the American Cancer Society Cancer Action Network, hailed the committee's action, calling it a "victory for public health that would both discourage youth and adults from smoking and provide much-needed health care for millions of children."
Money from the tax hikes would go to the State Children's Health Insurance Program, which subsidizes insurance for children and some adults whose income is too high to qualify for Medicaid but too low to pay for private insurance. Some opponents of the tax said Bush will have a difficult time explaining a veto that would deny children health insurance. Others argue the tax approach is misguided.
Rush Limbaugh, the radio talk-show host and cigar smoker, thundered away at the tax during a broadcast this week, asking: "Why should cigar smokers have to do it? What do kids eat? They eat vanilla ice cream, they eat Doritos, they eat Coke and Pepsi and 7-Up and whatever. ... I don't know what they do, but make the parents of these kids, every time they're buying a Snickers, raise the tax on a candy bar five bucks."
At Hubbard State Cigar Shop, a cozy Near North Side tobacco shop with two overstuffed chairs near the front window, hotelier Pradeep Raman, said he agrees with the principle of expanding health coverage for children but feels the proposed tax hike is excessive.
Raman, 30, was smoking a No. 3 Davidoff, which cost almost $19. "This might cost me $29," said Raman, who's been smoking cigars for seven years.
Cigars represent about 2 percent of the tobacco business in the U.S., a drop from a century ago, when nearly half of American smokers chose cigars. Cigar production has always been labor-intensive, which is one reason why cigarettes soon dominated the market. Still, cigar sales have grown in recent years, Mott said.
"Frankly, that was against all expectations," he said.
The proposed tax increase has cast a pall over the industry, Mott said. Mike Perales, an independent cigar representative who deals with Chicago retailers, said if the high tax level is enacted, that will encourage a black market for cigars.
"People will smuggle them in or figure out a way to buy them offshore," Perales said. "They're trying to fix a [health insurance] problem that is much bigger and complicated, and they're trying to do it by taxing what's easiest to tax."
Robust flavor
*U.S. cigar sales rose from 3.9 billion in 2000 to 5.3 billion in 2006.
*Mike Ditka is one of Chicago's most famous cigar smokers. And his restaurant just off Michigan Avenue, Mike Ditka's Chicago, offers a cigar bar with a number of quality cigars.
*Last year, the Cohiba Behike was introduced, described as the world's most expensive cigar. Price for a case of 40: $18,000.
*Cigars improve with age if stored properly (in a humidor at 70 degrees and 70 percent humidity).