2009 SCHIP Bill Introduced In Congress
ACTION ALERT: 2009 SCHIP Bill Introduced In Congress
Tobacco Manufacturers, Wholesalers, Retailers, Their Employees & Customers Must Call Their U.S. Senators and President-Elect Obama!
Today, the 2009 legislation to expand the State Children’s Health Insurance Program (SCHIP) was released by the U.S. House of Representatives. The proposed tax increases on tobacco products have changed somewhat as shown in the chart below. Several changes to the tax increases include a $.40 cap per large cigar and the roll-your-own tobacco tax increasing from $1.0969 per pound to $24.62 per pound! The 2007 version of the SCHIP bill had roll-your-own tobacco being taxed at a new rate of $8.9286 per pound.
|
Product |
Current Tax Rates |
SCHIP Tax Rates |
|
Cigarettes |
39¢ per pack |
$1.00 per pack |
|
Large Cigars |
20.719% of manufacturer’s price; cap of 4.875¢/cigar |
52.4% of manufacturer’s price; cap of $.40/cigar |
|
Little Cigars |
4¢ per pack |
Phase in of $1.00/pack: $.25/pack on 1/1/2009: $.50/pack on 1/1/2011: $.75/pack on 1/1/2013; and $1.00/pack on 1/1/2015. |
|
Pipe Tobacco |
$1.0969 per pound |
$2.8126 per pound |
|
Chewing Tobacco |
19.5¢ per pound |
50¢ per pound |
|
Snuff |
58.5¢ per pound |
$1.50 per pound |
|
RYO; Cigar Wrappers |
$1.0969 per pound |
$24.62 per pound |
|
Cigarette Paper |
1.22¢ per 50 papers |
3.13¢ per 50 papers |
|
Cigarette Tubes |
2.44¢ per 50 tubes |
6.26¢ per 50 tubes |
If passed, the bill becomes effective April 1, 2009 and assesses a floor stocks tax on all manufacturers, wholesalers and retailers for the tobacco products (except large cigars) in inventory on April 1, 2009 with the floor stocks payable by August 1, 2009.
Action Needed: Call U.S. Senators & President-Elect Obama!
Every tobacco manufacturer, wholesaler, retailer, their employees and customers need to call their two U.S. Senators from their state and urge them to oppose the tax increases to fund SCHIP. A list of U.S. Senators by state accompanies this bulletin. Leave a message with each senator’s staff that the SCHIP tax increases will result in large sales declines, employees being laid off and bankrupt retailers and wholesalers due to the floor stocks tax.
Nationwide, up to 117,000 American industry jobs will be lost.
Call President-Elect Obama’s Transition Office at 202-540-3000
When calling, listen to the message and Press 2 to speak to a live person. Tell the staff person that President-Elect Obama needs to be a man of his word and keep his campaign promise not to raise taxes on any American making under $250,000 a year and that this includes not raising cigarette and tobacco taxes to fund SCHIP. Do not allow the staff person to refer to you President-Elect Obama’s website to e-mail your message. Tell the staff person that the SCHIP bill will raise taxes on 43 million Americans who buy tobacco products and President-Elect Obama needs to find a different way to fund the SCHIP program.
Consequences For Retailers Would Be Significant
If Congress passes the bill to expand the State Children’s Health Insurance Program (SCHIP) by significantly increasing the federal cigarette and tobacco taxes, the fallout from this expansion of government subsidized health care will likely include major cigarette and tobacco sales reductions, large increases in the number of store robberies because the value of tobacco products would be so high, a floor stocks tax on cigarette and tobacco inventory adding up to an estimated $5,000 per store, employee layoffs and even store closings.
The SCHIP program is a top priority for Democrats and may result in the single largest tax increase on one industry’s products in the history of the country. With President-Elect Obama a supporter of SCHIP, the possibility of a tobacco tax increase to fund the expansion looms large even though Obama made campaign promises not to increase taxes on any one who earns less than $250,000. The 2007 SCHIP bills proposed the following increases in the federal tobacco excise tax rates:
The Time to Act is NOW!!!
NATO’s legislative staff members are sending out to association members customer alert sheets to place on store counters and personalized letters addressed to each retailer and wholesaler’s particular U.S. Senators and Representatives. NATO members need to call their Congressional representatives, urge their employees and customers to do the same and fax the personalized letters to Washington, DC. All the names, phone and fax numbers of the particular Congressional representatives are being provided. NATO members need only dial the phone and fax the letters. Your voice and the voice of your customers need to be heard.
Turbulent Time for Tobacco Requires Grassroots Efforts
No one can say with 100% certainty how the SCHIP legislation will finally be resolved by Congress in 2009. What can be said is that the SCHIP bill is just the beginning of what will be a turbulent year for the tobacco industry. With some in Congress supporting federal cigarette and tobacco tax increases to expand SCHIP and more than 30 states with large budget deficits some of which will also propose higher tobacco taxes as well, NATO wants to remind its members that they must continue to contact their elected officials to be heard on tobacco issues. Maintaining that dialogue and urging customers to make phone calls continues to be an important part of opposing unfair tobacco legislation.
February 26th, 2009 at 9:39 am
Sounds like a “shoot yourself in the foot” tax plan. I see it as an extreme tax on the poor. The people who can’t afford to buy factory made smokes. I’m thinking that the children of these poor people will have to do without shoes and food because daddy needs a pound of tobacco.
It certainly won’t stop under age kids from smoking. They’ll just steal more money from parents and relatives to get their smokes. It may even make smoking more cool to kids just because of the high cost. Adults may cut down or even quit smoking, but I think it will end up with a loss of tax revenue and more child smokers. Maybe that’s what they want? That’s it! Get the kids hooked for future tax benefits.;)
March 12th, 2009 at 8:52 am
We definitely need to look at the bigger picture here, which you stated quite nicely. Although this may sound like a good idea, increasing taxes on tobacco products to provide funding to children’s health care, there are many other factors to be considered. My concern is whether the money will be applied and accounted for properly.
March 31st, 2009 at 2:48 pm
Ok so does this mean we have to take yet another step back and resort to grow-your-own next? The reason I started the roll-your-own, wasn’t for the price, but for the flavor. I enjoyed trying various blends to get the flavor that I enjoyed the most. Dont get me wrong, I dont have MUCH of a problem with child health care, but who really knows how of tax REALLY goes to child health care. How about the middle America who is living from paycheck to paycheck, who cant afford medical insurance, or cant afford medical insurance based on what is needed. I’m in that boat, and in a month, I’ll no longer have a job either.
I guess the thing is I really dont see who this is really helping, not the smokers thats for sure, I know at least that much. Am I helping someone that cant afford to have children in the first place? It seems its all take take take, then give to someone else whom apparently needs it more than you.
“I know lets tax the hell outta tobacco, and say its for “kids”", fine then what will it be next? fat people?, why not? they already have to pay more for health insurance already since they are “at risk.” Just the same way smokers have to pay more for health insurance. So if your obese and a smoker, be lucky you get insurance I guess. God forbid you have a pre-existing condition. Sorry ranting about insurance not about how a raise in tobacco tax, really helps anyone. Well my 2 cents, it doesnt help anyone. If people want to smoke they will, if people want to drink, they will. You see how well prohibition worked.
Honestly I dont know where I’m going with this, I dont think I ever did, just ranting mostly, and I do feel a little better, good enough to go outside and have a smoke(as long as I’m not 15 feet from the door).
April 1st, 2009 at 6:47 am
Well the math sure doesn’t add up at my local smoke shop the 1lb bags went from $15.50 to $51.50. They started charging that price on 03/31 thats a $36.00 increase. Needeless to say I walked right back out the door.
April 4th, 2009 at 1:39 am
This is what the American people chose when by voting the Democrats into complete power. Anyone who believed they wouldn’t raise taxes is a fool.
April 6th, 2009 at 9:04 pm
Looks like I’ll be quitting. It’s not that I can’t afford it, it’s a statement and matter of principle. The net result will be thousands more losing their jobs, bank loan defaults, mortgage defaults and a larger burden on the states that are strapped now with more unemployment benefits, food stamps the works. These morons think that it’s only the smokers that will pay, I’ve got news for them, we’ll all pay. It doesn’t bother the pols if you’ve paid any attention to all of them that don’t bother to pay taxes until they get caught. When this doesn’t work they will move on to something else, who knows, beer at $25/six pack?
April 6th, 2009 at 10:27 pm
If they had any sense of fair play they would impose a one dollar tax on SEX. 90% of the men would overpay just to bitch and complain about the amount that they had to pay in every year and since each Representative represents about 150,000 people you know for every day they are in session that at least one half of them are going to get screwed over so that is $75,000 each. Then they should make them all wear uniforms with sponsorship decals shown so we would know who is paying them off. Just like a NASCAR driver wears on his uniform!
One Big Ass Mistake America!
April 7th, 2009 at 3:54 pm
So, when all the folks that can no longer afford to smoke stop buying and supporting this fund just as happened in Colorado - who and where are they going to go for this cash cow? They saw a dramatic decrease in the taxes being collected in this state and are now concerned the program is going to suffer and be unable to sustain what was started. Without funding - children that had been enrolled in the program are once again without coverage and families are facing expenses they cannot afford to pay.
Secondly, isn’t this in some form or other taxing based on discrimination? We are singling out one specific group of people to place a tax on. Seems to me there should be some constitutional questioning going on here. Why not include in the “sin tax” the same increase for alcohol, fast food, and any other form of activity that would be considered bad for you so you’re spreading the burden to everyone instead of just in most cases the poorest of people.
April 14th, 2009 at 5:04 pm
I think this whole SCHIP thing was a quick throw-together to get more money out of an over taxed under paid american middle class. I don’t believe it was thought out and if it was then our political leaders really need to go back to school, because the first thing brought to mind when I heard about this great plan was “how do they expect to provide health insurance to a whole country on the backs of (what is it now?) 20% of the nation”? It is a joke and our government is treating smokers as if tobacco has gone to our head or decreased our mental capabilities. I am disappointed in this tax and the reasons for it are that although it is a nationwide tax big cities, where the tax is always higher, because of all the other taxes (city tax, county tax, state tax, and whatever other tax they could throw in) will get taxed to death and crime will go up. Then there are the small tobacco shops that will have to close down because their business will slow down and/or they just can’t, in good conscience, sell a product at the price this tax is forcing them to charge. I believe as many do that this tax has singled the smoker out and that’s bad because nonsmokers are allowing it. They are not looking at the bigger picture. No one wants to fight against it because it’s for the children, and smoking is no good anyway, but if you allow this tax without a fight you might as well let them tax anything that they can put a pretty picture on. What would you do? How could you not vote for helping kids by taxing the hell out of dirty stinking tobacco users.
April 15th, 2009 at 8:00 am
I started myo last year after a co-worker told me about it.Wow what a savings,not only that,I liked it better than store bought.And now our the lier in the WH stuck it in deep to the people who he said he going help the middle class. I’ll bet he doesent care how much he pays for a pack,oh thats right we pay his salary.We are the first to feel the effects of a democratal led government.VOTE EM OUT!!!!!!!!!!!!!
April 15th, 2009 at 8:36 pm
I cannot remember the legilators asking us if we wanted or needed this tax. Last time I checked, those people in Washington are supposed to be working for us, not the other way around. We need to send them a clear message when they run for office. Repeal this unjust tax or look for a new job come election day! It’s issues like this that really emphasize the need of all Americans to get involved and make your voices heard!
April 17th, 2009 at 9:14 pm
Wow! I’ve read these posting and you guys are great! Kudos to ATTT.com for this site. Debi’s input shows particularly creative thinking. She makes a great point that attaching a “pretty picture” (i.e. SCHIP/”what about the children??”) is a nasty taxation trick. Exactly like the huge surcharge on legal lotteries. While they claim (here in Jersey) that it goes to old people, in fact the procedes are funneled directly into the state general treasury. Another guy made the point that we are being used to fund parents who irresponsibly sired children they can’t afford. And let’s face it–was such a child EVER denied needed medical attention? Without SCHIP will they be denied treatment? We’ve always paid for them in some form. Remember the $250K!!
May 5th, 2009 at 2:27 pm
Who’s representatives are they, the windfall profit tax era of the 1970’s forbid such increases, period. We have yet to receive any services from the previous increase just over-employment in staff, and fewer doctors who would be better served arranging monthly payment plans for services. Sounds like another pocket lining paper ponzi for no government services render except for criminals and terrorist.