Really Stocking Up?

[rottenzombie]

I will be stocking up but not because of the tax increase,I'm doing it just to have a ready supply of my favorite sticks around ageing

[tuneman07]

Originally Posted by CCCigar

Honestly, I don't know the real numbers involved so this is purely for example.

Manufacturer sells ciger to retailer for $1.00. The new tax makes the cigar $1.53. Now the cigar has to be loaded on a truck, driven to the shipping yard, put in a container, put on a boat, taken off a boat, loaded on a truck, shipped to the retailer, taken off the truck and out of the container with a foklift, brought into a warehouse and stored. None of these people work for free and boats and trucks and all of that are expensive so let's say all of that supply chain adds $1.00 value to each cigar. The cigar has cost the retailer $2.53. The retailer has lots of other expenses above and beyond procurement and warehousing like advertising, employee payroll and insurance, equipment and office supplies, market position on future inventory, his new car etc. Lets say he puts a 50% markup on the cigar to cover all of that. He would then sell the cigar to you at $3.80 a piece or $75.90 a box.

Now, lets remove the tax at the manufacturers stage. The cigar hits the warehouse at $2.00 a stick. He marks it up 50% to $3.00. You pay 53% tax on tat resulting in a $4.59 cigar or $91.80 a box.

That's the difference I am trying to point out.

so...... do they add the tax before or after? After reading this thread I am a lot less worried either way however. I mean 7.50 instead of 5 is not that huge of an increase. Heck before Cbid I used to pay 12 bucks for a rocky patel vintage.

[kenstogie]

Originally Posted by tippytwo

Actually, it is as simple as adding 53%. The price increase will obviously trickle down through the process, but to the consumer it will still be 53%. Wholesale and retail prices have nothing to do w/it since it's all based on a percent tax increase. Also, shipping prices will be the same. Nothing changes except the price of the cigars. If anything, demand goes down while supply stays the same and the prices of cigars drop due to simple economics. That's if you want to go deeper into the theory of it.

Maybe I'm not understanding what you are trying to say.

-T2

To get into the theory of it all,,,
Do you think an "Inflationary Spiral" will kick in?? and also...
/
cigars aren't like cigarettes but isn't there an In-elastic demand for tobacco products?

[tippytwo]

Originally Posted by tuneman07

so...... do they add the tax before or after? After reading this thread I am a lot less worried either way however. I mean 7.50 instead of 5 is not that huge of an increase. Heck before Cbid I used to pay 12 bucks for a rocky patel vintage.

I recently became aware that this is an excise tax. The bill states that it is an excise tax. http://en.wikipedia.org/wiki/Excise_..._United_States

The tax is charged to the cigar manufactures. It's the same thing as an automobile gas guzzler or luxury tax. So this excise tax basically adds an additional 53% price increase onto the cigar before it even gets to any of the stores. That means I got my math mixed up again lol.

53% price increase of $5 would be $7.65. Not including any markups, that cigar then makes it to the cigar retailer at $7.65 because the manufacturer had to pay that $2.65 in excise taxes. So when you go into the store to buy the cigar you will get charged your state sales tax, which let's say is 6%. You're TOTAL price would then be $8.10 out the door. So we're basically getting taxed twice. This 53% excise tax is kind of a "hidden" tax to the consumer. It will never show up on our receipts other than noticing our cigars are much more expensive.

lol, I'm learning more about taxes and politics than I want to researching this stuff.

-T2

Originally Posted by kenstogie

To get into the theory of it all,,,
Do you think an "Inflationary Spiral" will kick in?? and also...
/
cigars aren't like cigarettes but isn't there an In-elastic demand for tobacco products?

lol, no I don't want to get into the theory anymore lol I hated economics in school.

[CCCigar]

Originally Posted by tippytwo

The tax is charged to the cigar manufactures. It's the same thing as an automobile gas guzzler or luxury tax. So this excise tax basically adds an additional 53% price increase onto the cigar before it even gets to any of the stores.

[CCCigar]

Originally Posted by tuneman07

so...... do they add the tax before or after? After reading this thread I am a lot less worried either way however. I mean 7.50 instead of 5 is not that huge of an increase. Heck before Cbid I used to pay 12 bucks for a rocky patel vintage.

The tax goes in before so the effect is not 53% increase over retail. Without knowing exactly hom much retailers or imorters are paying we will not be able to foresee the actual increase. If the tax does go into effect it will be easy enough to figure out the net result of course.

[kenstogie]

Originally Posted by tippytwo

lol, no I don't want to get into the theory anymore lol I hated economics in school.

Funny I liked it or it was easy for me. Was a tutor for the school and I swear I never used the position to my advantage to help my fellow female classmates I digress, I hope the damn thing just doesn't make, there are far more deserving bills that never make it.

[Sawyer]

Even without the tax law, I am constantly running out of room.

[screwbag]

hey any excuse to buy more smokes is okay by me!!!

I doubt we need to...but I love buying em!!