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Democrats Propose Massive Taxes on Cigars

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UnnamedHouse Democrats’ plans to pass a combined $4.7T budget reconciliation and infrastructure package foundered last week, resulting from a rift between moderate and progressive Democrats. President Joe Biden has committed to working on a compromise this month, which is further complicated by the reluctance of Senators Manchin (D-WV) and Sinema (D-AZ) to consider a spending package that size with numerous policy conditions attached.

Senate budget reconciliation rules constrain how much the bill can add to the deficit, so draftees seek “pay-fors” to lower the net cost. Some of the proposed tax provisions come from Senator Dick Durbin’s (D-IL) Tobacco Tax Equity Act, which the Congressional Joint Committee on Taxation recently estimated would raise $96B through massive increases on tobacco products. The legislation proposes, among other things, a 1,000 percent tax increase on premium cigars. The bill would achieve this by changing the tax basis from a percentage of the import price to a weight-based tax.

For decades, the primary arguments in favor of increased tobacco product taxes have been the public health costs of smoking-related illnesses and deterring youth consumption. Since 2013, the U.S. Food and Drug Administration (FDA) and National Institutes of Health (NIH) have regularly released a joint study called the Population Assessment of Tobacco and Health (PATH) Study, described as “a national longitudinal study of tobacco use and how it affects the health of people in the United States.” The Journal of American Medicine (JAMA) also published an April 2018 article, “Association of Cigarette, Cigar, and Pipe Use With Mortality Risk in the US Population,” using data from the U.S. Census National Longitudinal Mortality Study (NLMS).

The evidence from these studies strongly suggests there is no correlation between the vast preponderance of premium cigar smoking and public health costs and youth consumption.

More HERE

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