It’s no mathematical error: The federal government has proposed raising taxes on premium cigars, the kind Newman’s family has been rolling for decades in Ybor City, by as much as 20,000 percent.
As part of an increase in tobacco taxes designed to pay for children’s health insurance, the nickel-per-cigar tax that has ruled the industry could rise to as much as $10 per cigar.
“I’m not sure in the history of man, since our forefathers founded the country in 1776, that there’s ever been a tax increase of 20,000 percent,” said Newman, who runs the Tampa business founded by grandfather Julius Caesar Newman. “They had the Boston Tea Party for less than this.”
Here’s the source of the controversy: The Democrat controlled Congress has sought an extra $35-billion to $50-billion for the state children’s health insurance program. The program distributes payments to the states to help buy coverage for kids not poor enough for Medicaid.
A U.S. Senate version of the bill under consideration today in the Finance Committee sets the maximum tax per cigar at $10.
The Bush administration may inadvertently come to the industry’s aid. The president has vowed to veto the bill, not over the cigar provision but over objections to expanding federally financed health care for the non-indigent.