For local cigar enthusiasts Watch City Cigar at 853 Main St. is where they get their fix.
Customers visiting the store for a quick purchase or a mid-day puff, yesterday had different reactions to the new federal tax hike on tobacco products that would raise the price of some cigars by 40 cents.
Today the federal tax increase takes effect, affecting everything from pouches of roll-your-own tobacco to high-end cigars.
The major cigarette makers raised prices a couple of weeks ago, partly to offset any drop in profits once the per-pack tax climbs from 39 cents to $1.01, according to the Associated Press.
While cigarettes garner the lion's share of attention, local and national players in the cigar industry are also bemoaning a tax boost, which places a federal levy of up to 40 cents on super-sized stogies.
The previous federal tax cap for large cigars was just under 5 cents.
Don Nazzaro, a Southborough resident, spent yesterday afternoon smoking a cigar in one of Watch City Cigar's leather chairs.
"They are going to put small business person out of business," he said. "They are going to tax them out of business and that applies to the individual smoker as well."
John Franzago, a Cape Cod resident who works in Waltham, said he smokes one cigar a day and is not opposed to the tax hike.
"To be honest, a 40 cent tax increase on a cigar wouldn't effect the amount or frequency I smoke cigars," he said. "As a smoker, I should have more of an (opposition to the hike), but if there's a cause to a problem, there should be a solution too. I think it's a good motivation for people to quit."
John O'Brien, a resident of New York City, also spent the afternoon at Watch City Cigar. O'Brien said he often travels to Waltham to care for a family member and frequents the shop.
"In New York we've had, over the years, a smoking law enacted by Mayor (Michael) Bloomberg. Basically if you are smoking you had to go to a cigarette store or a club," he said. "What's happening is the taxes have constantly gone up over the years."
O'Brien, a cigar smoker for the past 30 years, said he's a member of an organization called Cigar Rights of America.
"What Cigar Rights of America is, is we assert the rights of cigar smokers and try to limit the idea that government can keep taxing you, so cigar smokers can stand up for their rights," he said. "We enjoy a fine cigar and we have the right to enjoy a fine cigar. We'd also like to limit the taxation when purchasing a single stick."
Glynn Loope, executive director of Cigar Rights of America, worries this tax is just the initial salvo in what could turn into a ever-growing congressional cash cow.
"I think this was Round 1," said Loope.
Some local employees that make some of their living selling tobacco products look at the price boost as another blow to their sales.
As of yesterday, Nil Patel an employee of both Watch City Cigar and an adjacent business J & J Variety, said people are complaining about the hike, but they are still buying the same brands and same amount of tobacco products.
"It's getting too difficult. People they come here and they say (the prices are) too much," he said. "People tell me (I'm not) going to smoke anymore."
Kurt Hainey, a manager at Gordon's Fine Wines & Liquors on Main Street, which sells tobacco products, said he's very upset about the federal tax increase.
"It's going to hurt us. Basically all of our customers who smoke are middle-class and are not going to be able to afford this," he said. "We're going to lose business."
Norman Sharp, president of Cigar Association of America, thinks the new fee could be devastating to the industry. He did not rule out large cigars sales declining from 25 to 30 percent because of the tax bump.
The boost has drawn praise from health officials, who say the more expensive it is to light up the better.
Congress passed the measure with the intention of using the funding to expand the financial umbrella of the State Children's Health Insurance Program - commonly referred to as S-CHIP. Essentially, it means more children will qualify for the program.
Eric Lindblom, research director for Campaign for Tobacco-Free Kids, says the boost is great for both the fiscal and public health of the nation.
Lindblom says tobacco products such as cigars for years were "grossly under-taxed when compared to cigarettes."
This tax bump for cigars is the first since the Clinton administration. Then it was a two-phased increase that pales in comparison.
In 1999, there was a 3-cent tax cap. In 2000 it rose to just above 4 cents. And on Jan. 1, 2002, it increased again to just under 5 cents.
Cigars, said Lindblom, have harmful health ramifications like cigarettes. He also said they have "sweet and youth-friendly flavors," and can be addictive. Anything that deters tobacco use of any kind, he said, is a positive.
"This is an absolutely wonderful thing," said Lindblom.
All told, the tax could raise $33 billion for the expansion of health insurance in the next four-plus years.
Wednesday, April 01, 2009
Source: Daily News Tribune