Response I got from Senator Kay Bailey Hutchison (Texas)

[tx_tuff]

Ok I called her office, left a VM with all of the talking points Cigar Diva layed out for us. And this is what I got back.


Dear Mr. Flores III:

Thank you for contacting me regarding tobacco taxes. I welcome your thoughts and comments on this issue.

The federal tax rate on cigarettes remained unchanged at eight cents per pack from 1951 to 1982. Since 1982, the rate has been increased several times, and the current federal tax on cigarettes is 39 cents per pack.

S. Con. Res. 21, the Senate Budget Resolution, authorizes an increase in the federal cigarette tax from 39 cents to $1, a 61 cent increase, to raise money for the State Children’s Health Insurance Program (SCHIP). The increased tax would raise an estimated $7.6 billion per year for this important program. However, I voted against the Senate Budget Resolution, and the Conference Report, because it increases spending to nearly $15 trillion over five years and includes a historic $732 billion tax increase. The Budget Resolution fails to extend vital tax cuts that are driving our growing economy and instead creates the steepest tax hike in history.

An increase in the tobacco tax was recently considered as part of H.R. 976, the Children's Health Insurance Program Reauthorization Act of 2007. SCHIP provides health insurance benefits to children in low income families that cannot afford health insurance, but are ineligible for Medicaid. While I am a strong supporter of the SCHIP program, I also supported three different amendments which would have provided relief from the proposed taxes on tobacco products. S. AMDT. 2554, introduced by Senator Elizabeth Dole (R-NC), sought to amend the Congressional Budget Act of 1974 to provide for a 60-vote point of order against legislation that includes a Federal excise tax rate increase which disproportionately affects taxpayers with earned income of less than 200 percent of the Federal poverty level (such as any tobacco tax). The amendment failed by a vote of 32 - 64. S. AMDT. 2558, introduced by Senator Lindsey Graham (R-SC), sought to sunset the increase in the tax on tobacco products on September 30, 2012. A budget point of order was raised against the amendment, and a motion to waive the point of order failed by a vote of 39 - 60. S. AMDT. 2619 was introduced by Senator Bill Nelson (D-FL) to reduce the cap on the tax on large cigars from $10.00 to $3.00. This amendment passed with my support. The Children's Health Insurance Program Reauthorization Act of 2007 passed the Senate on August 2, 2007 by a 68-31 vote. As this issue moves forward in a conference committee, you can be assured that I will monitor this proposal, taking your thoughts into consideration.

Other legislation proposing tax increases on tobacco products include S. 1799, which was introduced by Senator Blanche Lincoln (D-AR) on July 17, 2007. The bill seeks to apply rate parity to the excise tax on small cigars and small cigarettes by raising the tax from $1.828 cents per thousand to $19.50 per thousand units. Currently, there is a maximum federal tax of 4 cents per small cigar and a maximum federal tax of 5 cents per large cigar (or 20.719% of the sales price, not to exceed $48.75 per 1,000 units). This legislation has been referred to the Senate Finance Committee, on which I do not serve. Should this legislation come before the full Senate, you may be certain I will keep your views in mind.

I appreciate hearing from you and hope you will not hesitate to keep in touch on any issue of concern to you.


Sincerely,
Kay Bailey Hutchison

[JoeyBear]

As read, the proposal for a $3 tax per cigar has passed the proposal phase, but that's as far as it's gotten. Cigarette and "small" cigar tax will remain relatively unchanged, though. I'll reread and see if my understanding changes.

$3 per cigar is gonna suck. This tax will NOT accomplish what Congress is intending. People will stop buying cigars or start ordering them from non-US sellers. I'll stock up way before this gets near the point of passing.

[JohnRider]

I think it is fourth down and long and we're on our own 40 yard line. The kicker is looking like our only hope to tie the game.

[Architeuthis]

I used to trust Kay Bailey when she was in Texas politics... Let's just say my faith in her has diminished slightly...

[bobaganoosh]

If that passes... that would certainly mean the end of my local B&M. I think are barely surviving as it is.

Originally Posted by JoeyBear

As read, the proposal for a $3 tax per cigar has passed the proposal phase, but that's as far as it's gotten. Cigarette and "small" cigar tax will remain relatively unchanged, though. I'll reread and see if my understanding changes.

$3 per cigar is gonna suck. This tax will NOT accomplish what Congress is intending. People will stop buying cigars or start ordering them from non-US sellers. I'll stock up way before this gets near the point of passing.

[JohnRider]

Originally Posted by bobaganoosh

If that passes... that would certainly mean the end of my local B&M. I think are barely surviving as it is.

I'm sure I would be buying a lot more bundles. It would push a lot of cigars that I currently buy out of my reach.

I just heard on the radio that the House passed the new "compromise" bill tonight.

[JoeyBear]

Originally Posted by JohnRider

I'm sure I would be buying a lot more bundles. It would push a lot of cigars that I currently buy out of my reach.

I just heard on the radio that the House passed the new "compromise" bill tonight.

What is the "compromise"?

[JohnRider]

Originally Posted by JoeyBear

What is the "compromise"?

[UPDATE: George Edmonson reports there was one small victory in House negotiations, as the “floor tax” was eliminated. The “floor tax” – also known as the “store killer” for the likeliness that it would bankrupt many B&Ms – was a proposed one-time tax on every cigar a store has in inventory.]

Under the plan, federal cigarette taxes were increased from 31 cents per pack to $1.00. The 256% increase was then applied to other forms of tobacco such as “large cigars.” The federal excise taxes on large cigars – like the ones we review here at StogieGuys.com – go from 20.719% with a cap of 5 cents per cigar to 53.13% of the manufacturer’s price with a cap of $3. For a cigar that retails for $7.50, the new tax would increase the price of a box of 25 cigars by about $100. The tobacco tax increases are set to go into effect January 1, 2008.

http://www.stogieguys.com/2007/09/09...at-stands.html

[Envision]

I know one thing for sure, I would not be buying half of the cigars that I do now, nor would I be buying such good cigars. I am very budgeted in what I can spend weekly to just smoke cigars, and if I had to pay $3 more per stick, that would damn near stop me from smoking them altogether! Where can I go, who can I call, to get my voice heard about this matter?