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Attack Of The Sin Tax: Cigar Store Owner Outraged By Proposed Tax Increase

"CAUTION, you are about to enter the government shakedown zone."

That is the message that pops up when cigar lovers visit the website for Davidus Cigars, a retail chain headquartered in Monrovia with local stores in Frederick and Urbana.

Davidus owner David Castro became concerned this year when he spotted a state bill that would increase the tax on cigars from 15 percent to 90 percent of the manufacturer's price.

"I was outraged," Castro said. "It was like somebody walking into your home and telling you that they were going to confiscate everything that you own."

He set up a web alert and is urging his customers to contact their lawmakers.

HB 951, sponsored by Delegate James Hubbard, D-Prince George's, and Sen. Verna Jones, D-Baltimore City, would increase tobacco, alcohol and payroll taxes to fund a broad effort to increase health insurance coverage.

The plan was proposed by the Maryland Citizens Health Initiative, a coalition of organizations working for quality affordable health care for everyone in the state.

Vincent DeMarco, president of the initiative, said cigar tax increases were in the bill to ensure that teenagers don't start smoking cigarettes cigars when the cigarette tax goes up.

Under the bill, the cigarette tax would increase from $2 a pack to $2.75.

"We want to reduce teen smoking cigarettes, and increased cigarettes taxes is proven as one of the very best ways to do that," DeMarco said.

Increasing the rate on cigars and other non-cigarette tobacco products is expected to generate $28 million, DeMarco said.

The Campaign for Tobacco Free Kids also worked on the plan.

Eric Lindblom, director for policy research at the campaign, said cheap cigarettes are taxed at a much higher rate than cigars.

Nationally, that has driven children to turn to tobacco products other than cigarettes, he said.

A $2-a-pack tax on cheap cigarettes is roughly equal to the proposed 90 percent of the manufacturer price on cigars, he said. His organization estimates the average manufacturer price of a pack of cigarettes is $2.25.

Making the rates comparable serves two purposes, he said.

"One is to get a consistent strong price barrier to all tobacco products, and also it's a matter of tax equity and making sure the state isn't losing money because of unequal tax rates," Lindblom said.

Castro thinks the 90 percent rate could put him out of business.

His company has grown from a small business with one employee to six stores employing 30 people. The stores specialize in premium cigars selling for $2 to $30 each, and offer in-store lounges where customers can relax and socialize while smoking cigarettes.

In addition to the state tobacco tax, cigars are also subject to a recently raised 40 cent federal excise tax and the state's 6 percent sales tax.

"What business can sustain that?" Castro asked. "What about the local grocery store, ice cream, tanning salons? It makes absolutely no sense, it's an outrage."

Lindblom calls the complaints of retailers "Chicken Little crying wolf."

"We hear that on everything," Lindblom said. "You hear it when we pass smoke-free laws, any kind of tobacco tax increase. I've never seen it happen."

Several Frederick lawmakers said that they would not support an increase to the cigar tax.

Delegate Galen Clagett, D-Frederick, said the legislature would not approve any new taxes this year, especially with local businesses facing a recession.

The bill will be heard by the House Health and Government Operations Committee, of which Frederick County Delegate Rick Weldon is a member.

Weldon, who is unaffiliated, said he thinks the state should rely on a stable revenue source to subsidize health coverage, not vice taxes dependent on consumption.

"So what do we do when we extend health insurance to people and then fewer people are drinking and smoking cigarettes?" he asked. "Then do we not provide the health care?"

Castro is glad to hear those sentiments. He said his cigars are hand-rolled, 100 percent tobacco and are enjoyed by adults from all walks of life.

"I get the sense that a lot of smart representatives in Annapolis have already told us it's ridiculous, it's nonsense," Castro said. "The days of going after businesses that are considered sin taxes are over."

Other cigarettes news and tobacco market events you can find at links bellow:

   • Cigarettes Online News

   • Discount Cigarettes & Tobacco News

   • Discount Cigarettes Tobacco News





The term cigarettes, as normally employed, refers to a tobacco cigarette, but can be utilized like devices holding in other herbaceous plants, such as eugenia caryophyllatums. A cigarette is differentiated from a cigar by its modest sizing, utilization of treated leafage, and paper wrap, which is usually white hot, though other coloring materials are sometimes usable. Cigars are mostly compiled totally of whole-leaf tobacco plant.

Rates of cheap smokes changes widely, and have altered substantially over the course of human history since cigarettes were 1st wide used in the mid-19th century. While rates of smoke have over time leveled off or turned down in the highly developed world, they continue to up-rise in evolving states. Nicotine, the main psychotropic chemical substance in baccy and therefore cigarettes, has been shown to be psychologically habit forming, although it does not generate a physiologic addiction.

Cheap cigarettes usage by pregnant women has also been shown to stimulate birth defects, including mental and physical disabilities.