SCHIP Update

[Cigahs]

Here's the actual bill... in all its glory.

http://frwebgate.access.gpo.gov/cgi-bin/ge...=f:h2ih.txt.pdf

Reading the whole thing will make your head spin. If you want the nitty gritty on how it affects cigar pricing, go to section 701 on page #271.

This is a change in the import tax. It used to be 20.719% of the import price with a cap of $48.75 per thousand (approx 5 cents a cigar) and has been changed to 52.4% with a cap of 40 cents a cigar ($400 per thousand!!). In short, we (industry importers), can expect an increase of 35 cents per cigar when it arrives at port.

Truthfully, it may not affect the premium cigar business too drastically but the bundle and little cigar (Mac Ascots, Agio, and just about anything in a small pack or tin) businesses will be devastated after April 1st.

Once again, if it's cheap cigars or tins you want, buy them now and buy plenty.

I'll also add that this bill has not been passed by the house yet. They're voting on it tomorrow and is expected to pass quickly with little or no change. I hear the senate may take longer.

Humberto

 

[VicAnderson]

I just read this via Dallas Morning News. What concerns me is, ok .40c this year, not terrible. How about tax increases next year, and the year after that e.t.c

 

[Cigahs]

I just read this via Dallas Morning News. What concerns me is, ok .40c this year, not terrible. How about tax increases next year, and the year after that e.t.c

We'll

that

when we

to it.

 

[Chemyst]

Let's see if I understand this correctly...

On a $3.50 msrp cigar it's a 10% tax increase

On a $7.00 msrp cigar, it's a 5% tax increase

On a $10.50 msrp cigar, it's a 2.5% tax increase

and on my usual $21 msrp smokes, it's only a 1.25% increase.

Love those regressive tax increases!

What's next?... Beer and wine, pizza?
Hmmm... 35 cents PER CAN on Beer? I can hear the screams
already! 35 cents PER SLICE of pizza? 35 cents PER OUNCE of
WINE?

Chemyst

 

[Cigahs]

Let's see if I understand this correctly...

On a $3.50 msrp cigar it's a 10% tax increase

On a $7.00 msrp cigar, it's a 5% tax increase

On a $10.50 msrp cigar, it's a 2.5% tax increase

and on my usual $21 msrp smokes, it's only a 1.25% increase.

Love those regressive tax increases!

What's next?... Beer and wine, pizza?
Hmmm... 35 cents PER CAN on Beer? I can hear the screams
already! 35 cents PER SLICE of pizza? 35 cents PER OUNCE of
WINE?

Chemyst

Nope...

That 35 cent increase will be when it arrives in the country. Importers will likely bury that in their wholesale price and increase the MSRP by doubling their new cost.

Example using your $3.50 number above.

At port
Old Cost = $1.75
Old MSRP = $3.50 Keystone (Usually)

New Cost = $2.10
New MSRP = $4.20

Increase of 20%, NOT 10%

 

[PhatCat]

It's the whole principle of it that makes me sick. We're letting our freedoms be taken away from us one small piece at a time.

What's next?!

 

[Seanholio]

It's the whole principle of it that makes me sick. We're letting our freedoms be taken away from us one small piece at a time.

What's next?!

Next they confiscate all of our retirement-specific accounts, put them in a pool, and guarantee a rate of 3% for the good of all.