Nebraska Tobacco Tax Increase Proposal Harmful, Says Cigar Shop Association

Lincoln, Nebraska  March 31, 2011 – A 225 percent increase in Nebraska excise taxes on certain tobacco products would be harmful to businesses throughout the state, according to the International Premium Cigar & Pipe Retailers Association.

Legislative Bill 436 calls for higher cigarette and smokeless tobacco tax increases and an increase in the excise tax on other tobacco products including all cigars. The bill would raise taxes from 20 percent to 65 percent of the wholesale price.

“Tax increases of this magnitude backfire in this or any other economy. They never produce what they are expected to produce and they always lead to damaged businesses, lost jobs and lower tax revenues overall,” said Christ McCalla, legislative director of the IPCPR.

In addition, higher taxes on tobacco products inevitably lead to lost revenues to the state’s cigar stores because customers either purchase less or they migrate to the Internet and purchase their products online where they are not taxed, McCalla pointed out. He also cited that higher prices lead to contraband product, brought in illegally and sold without generating state tax revenues.

“Nobody wins when that happens,” he said.

Earlier this year, the results of a poll of 500 Nebraskans were touted by anti-smoking forces as justification for tobacco tax increases statewide. At that time, the IPCPR branded the poll as ‘phony.’

The poll was paid for by the Robert Wood Johnson Foundation, an $8.4 billion organization that gets its funds from Johnson & Johnson which makes the leading brand of anti-smoking medication.    

“The conclusions drawn from the poll results are phony for many reasons,” said Chris McCalla, legislative director of the IPCPR. “First of all, the poll’s funding source has a vested interest in forcing people to give up the pleasure of smoking which will result from higher tobacco taxes,” said Chris McCalla, legislative director of the IPCPR.  “Second, they are saying that 365 people should dictate higher taxes on those tobacco products by the citizens of Nebraska. Ridiculous!”

The IPCPR is an association of independent cigar store owners and manufacturers, most of whom are small, mom-and-pop tobacconists who primarily sell premium cigars, pipes and tobacco.

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3 comments ↓

#1 OTP Kid on 05.23.11 at 11:57 AM

The CAA has done a masterful job of protecting cigars under the auspices of premium handrolled cigars, but let’s face the facts: this is a smokescreen to sell machine made cigars as cigarette replacement products, clear and simple. Take a look at the volume of machine made cigars and there’s no denying it. These candy flavored products appeal to youth and they are escaping all the rules and their volume grows every day, why else did Altria, Commonwealth and eventually RJR get into this category? The politicians may be slwo, but they are figuring it out. Pretty soon, the free ride will be over.

#2 Vapor Vixen on 05.26.11 at 12:58 PM

I agree with your thoughts OTP Kid! Love your candid and direct comments. The day is coming and it may be sooner than many expect.

#3 Murlisea on 06.15.11 at 2:48 AM

Pretty soon, the free ride will be over. We will be waiting on it!

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