Cigar retailers dealing with tax increase - The York Daily Record

Cigar retailers dealing with tax increase
By TOM JOYCE

Daily Record/Sunday News
Updated: 04/03/2009 06:51:52 PM EDT

Cigar retailers in Pennsylvania have seen better days.

On Wednesday, the federal tax on cigars jumped about 700 percent. In addition, Gov. Ed Rendell's proposed budget would put a state tax on cigars for the first time.

Yet owners of York County smoke shops said they're not losing any sleep over the new cigar taxes. The reason for that is simple -- things could have been a lot worse for them.

"We ducked a bullet," said Jack Shearer, owner of D.J.'s Westgate Beverage in West Manchester Township, which sells cigars as well as cases of beer.

Which isn't to say that cigar sellers are happy about the new taxes.

"I don't believe in the philosophy of taxing a product that you're trying to eliminate the usage of," said Mark Tucci, owner of Custom Blends in York Township. "It's a double standard that won't work at all."

The new federal tax increases the tax on cigars from 5 cents to about 40 cents on larger cigars, a little less on smaller ones. The revenue will help pay for a health insurance program for low-income children that President Barack Obama signed into law about two months ago.

And that might not be the end of it. Gov. Ed Rendell's proposed state budget would impose a tax of 36 cents for every 10 cigars.

But Shearer said that earlier proposals for the federal tax would have imposed a far higher rate on cigars. Besides, the 700 percent jump is peanuts compared to the 2,200 percent federal tax increase imposed on loose tobacco that people use to roll
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their own cigarettes, which went up from $1.10 to $24.78 per pound.

Shearer said roll-your-own tobacco makes up a small portion of his sales. He believes most cigar smokers approach them as an occasional luxury, not as a regular fix like cigarette smokers, and he doubts the additional tax will discourage his customers. Bottom line, he doesn't anticipate going out of business because of it.

Still, he finds the tobacco taxes galling and a bit absurd, in light of the fact that the government ostensibly wants people to quit using tobacco, yet bases the funding of important programs on their continued purchase of it.

"If everybody quit smoking, where would they get their money for health care?" he said.

Jesus Castanon, one of the owners of Hain's Pipe and Cigar Shop in York, objects to the tax on principle. He doesn't think it's right that one group of retailers should take on such a high proportion of the cost for social programs.

"They want to put the load of health services for kids on only a small section of society," he said.

But Susan Roberts, policy manager for the Pennsylvania division of the American Cancer Society, argues that it makes sense to have tobacco sellers contribute to health care. Each year, she said, disease related to smoking creates $5.1 billion in health care costs.

Though cigarettes generate most of that, she said that cigars are unhealthy too.

"Any tobacco product is a health threat," Roberts said.

Who smokes cigars?

--- Cigar smokers in the past have been mainly males between the ages of 35 and 64 with higher education and income.

--- Most new cigar users today are teenagers and young adult males (ages 18 to 24) who smoke once in a while (less than daily). According to the Substance Abuse and Mental Health Service Administration's 2006 survey, about 12 percent of Americans age 18 to 25 had smoked a cigar within the last month, compared to the average of 6 percent from all ages.

--- A Centers for Disease Control and Prevention survey reported that as of 2006, about 4 percent of teens in middle school (grades 6-8) had smoked a cigar in the past month.

--- A 2007 CDC survey that looked only at high school students found that 8 percent of girls and 19 percent of boys had smoked a cigar in the past month. In boys, the numbers doubled between 9th and 12th grade, with 13 percent of 9th grade boys and 26 percent of 12th grade boys saying they had smoked a cigar in the past month.

Source: www.cancer.org

20th century's most notable cigar smokers:

1. Winston Churchill

2. John F. Kennedy

3. Fidel Castro

4. George Burns

5. Mark Twain

6. Milton Berle

7. Bill Cosby

8. Red Auerbach

9. Jack Nicholson

10. Babe Ruth

Source: cigaraficionado.com

Alice Jones: High rollers and the fate of fat cigars

Alice Jones: High rollers and the fate of fat cigars - Commentators, Opinion - The Independent

Havana Notebook

Monday, 6 April 2009

So the credit crunch has reached even the shores of Fidel Castro's crumbling Communist outpost. It seems that in the depths of a recession there are far fewer fat cats celebrating a clinched deal by chewing on a fat Montecristo No. 2. Setting fire to a bundle of dried leaves at around a pound a puff is a luxury to live without in straitened times.

For the last three weeks the schoolroom on the first floor of the elegant 19th-century Partagas cigar factory in central Havana has lain empty. Chairs are piled up on top of the rows of wooden desks where up to 300 trainee torcedores (rollers) are normally taught the intricate art of cigar-making.

The factory is no longer recruiting and has further sacked 15 per cent of its staff, thanks to a spectacular fall in demand. Those remaining are no longer allowed to produce over their quotas to earn a little extra. Once they have reached their target – for the highest rollers, up to 120 deftly hand-made cigars a day – they are sent home.

There is light on the horizon, though. Last week, the US federal government announced a tax hike on tobacco which, combined with a new bill relaxing the rules on allowing Americans into Cuba, should see the industry warm up again. And if all else fails, perhaps the Cuban tourist board can look into developing Guantanamo Bay (on the island's south-eastern tip) as a potential holiday hot-spot. According to Miss Universe, it's a "lo-o-o-t of fun" this time of year.

Art from the heart

The talk of the town this week was a performance by the Cuban artist Tania Bruguera, below, who erected a modest podium and microphone in the heart of the old town and invited passing habaneros to speak out on a subject of their choice. Two actors in army fatigues stood guard, placing a white dove on the shoulders of volunteers in a satirical nod to Castro's 1959 speech during which a bird serendipitously alighted on the leader. The crowd looked on, aghast and exhilarated. The government branded those involved as "dissidents". Too late: Havana had tasted free speech and it was electrifying to watch.

Fast lane to capitalism

It's a cliché to praise Cubans for their resourcefulness but the story of Rosa is one to savour. This diminutive, middle-aged lady spent a decade saving up to refit her ancient 1970s Lada with a turbo engine. Duly souped-up, Rosa took herself down to the Havana freeway for an illegal night race. The assembled boy-racers took one look at her and her rust-heap and raised the stakes. She won, repeated the hustle several more times and is now the proud owner of a new kitchen. What would Castro say?

CIGARS: Omar Ortez Originals Review

In comparison to the older generation of cigar smokers, I am a fairly new brother of the leaf; however, in the short time that I have been smoking (2001), I have developed a palate that I can be pretty proud of. I can proudly say that the Omar Ortez Originals Nicaraguan Puro (Filler, Binder, and Wrapper) is one of the few cigars that appeals to both the older generation of puffers that prefer a more constant stronger smoke as well as the newer generation that is more apt to recognize and appreciate a cigar’s complexity. This medium to full bodied stick has a great light and burn and uncut, has a wonderful aroma. Once lit, this stick is very strong and spicy but then burns into a creamy, rich, woody bouquet that, in the words of my friend and fellow brother of the leaf Luke Sitka put it, “it has a oaky finish that makes me think of oak barrel whiskey.” Luke is absolutely right in that this cigar has a smoky oak finish that lingers on the palate very nicely. There isn’t much spice for about the first third of the cigar, but this changes as this complex smoke begins to open up more towards the middle giving the smoker the opportunity to experience some changes such as spice and sandalwood. Omar Ortez Originals come in rough edged, unfinished boxes of 60 in three sizes: Belicoso, Toro, and Torpedo. At about a $3.00 price point, you can’t go wrong. Great tasting, great satisfaction, Great price: what more can you ask for?

CIGARS: Review

I finally had the chance to fire up the Don Carlos 30th Anniversary edition cigar by Arturo Fuente the other night. It was a very good smoke, however, I did find that it was over rated. I would pay no more than 20 bucks for this stick, not the hefty 50 bucks that this stick boasts. I had the robusto size which, in comparison to this cigars cousin the Fuente Fuente Opus X, this stick burned unbelievabley fast. In comparison to the Opus X, this cigar burned at least 30 minutes shorter. Granted the little Power Ranger Opus X robusto burns longer than most, but for 50 bucks, I hope to get a similar experience. I was unimpressed with the burn in that it was inconsistent and threatened to canoe at some points. This may have been due to their slight dryness; I noticed that the wrapper was a little on the dry side. It was a complex smoke in that it started very strong and really tingled the palate and woke up the sinuses. It changed from almost over overbearingly strong and then mellowed out very nicely for the duration of the stick. I gathered strong spice, good amounts of ceder and wood, and some very pleasant sporadic notes of coffee grounds, hazelnut and almonds. Overall a pleasant smoke, but a little on the pricey side.