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Obama Budget 2014 Tobacco Tax Increase?

(18 posts)
  • Started 1 year ago by samcoffeeman
  • Latest reply from peckinpahhombre
  1. samcoffeeman

    samcoffeeman

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    So I did some research in the actual budget on whitehouse.gov. I cannot find any mention of a tax increase on large cigars, small cigars, RYO or pipe tobacco. I viewed the 294 page entire document and hit 'find' and typed 'tobacco.' There are 6 instances of the word tobacco in the budget. Here:

    The investments in early childhood education
    and development on the mandatory side of the
    Budget are fully financed by raising the Federal
    tax on cigarettes from $1.01 to $1.95 per pack. In
    addition to financing important investments in
    early learning, the proposed tobacco tax increase
    would have substantial public health benefits,
    particularly for young Americans. Researchers
    have found that raising taxes on cigarettes significantly reduces consumption, with especially
    large effects on youth smoking.

    The Budget pays for new early childhood investments by
    increasing the tobacco tax, which will also save
    thousands of lives. In addition, the Budget pays
    for new tax cuts by closing tax loopholes and rebalancing the tax code so it does not unfairly benefit the wealthiest Americans.

    Tobacco is mentioned in conjunction with federal employeee health care and then 3 times in the actual budget breakdown charts.

    If any of you who have stated that the tax will increase on all tobacco products, please give your sources. I believe this idea of a blanket tobacco tax increase is more conjecture than fact.

    Here is another mention of the proposed cigarette tax:

    Providing a year of free, public preschool education for 4-year-old children is an important
    investment in our future. It will give all our kids the best start in life, helping them perform better in
    elementary school and ultimately helping them, and the country, be better prepared for the demands
    of the global economy. Not only that, it could save hard-working families thousands of dollars each
    year in child care costs. This is an investment we need to make, and it is fully paid for in this Budget
    by imposing a new tax on every pack of cigarettes sold
    .

    We hold these truths to be self-evident, that all men are created equal,
    that they are endowed by their creator with certain unalienable Rights,
    that among these are Life, Liberty and the pursuit of Happiness
    Posted 1 year ago #
  2. numbersix

    numbersix

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    If any of you who have stated that the tax will increase on all tobacco products, please give your sources. I believe this idea of a blanket tobacco tax increase is more conjecture than fact.

    "Be seeing you"


    Posted 1 year ago #
  3. samcoffeeman

    samcoffeeman

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    Is it a faux pas to bump my own post? I would just like to re-iterate that I have re-read the article mentioned in the other post. The writer's sources are a facebook page and bloomberg. I cannot find the quoted section on bloomberg.com. However, if you read the direct quote from the budget, it is clear that the pre-school funding is funded solely by the proposed cigarette tax hike.

    Posted 1 year ago #
  4. sparroa

    simenon

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    I don't know whether the claims made are true, but I can guarantee you that all tobacco will be taxed equally whether it happens in 2014 or 2020 - it is just a matter of time.

    Posted 1 year ago #
  5. samcoffeeman

    samcoffeeman

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    Finally someone got back to me with an actual source, and it is true. From the whitehouse.gov website: federal receipts

    Increase tobacco taxes and index for inflation.—
    under current law, cigarettes are taxed at a rate of $50.33
    per 1,000 cigarettes. this is equivalent to just under $1.01
    per pack, or approximately $22.88 per pound of tobacco.
    taxes on other tobacco products range from $0.5033 per
    pound for chewing tobacco to $24.78 per pound of rollyour-own tobacco. the Administration proposes to increase the tax on cigarettes to $97.65 per 1,000 cigarettes,
    or about $1.95 per pack, increase all other tobacco taxes
    by about the same proportion, and index the taxes for inflation after 2014. the Administration also proposes to
    clarify that roll-your-own tobacco includes any processed
    tobacco that is removed for delivery to anyone other than
    a manufacturer of tobacco products or exporter. the rate
    increases would be effective for articles held for sale or
    removed after december 31, 2013.

    So yes, feelf ree to go in full panic and buy your tobacco BEFORE 12/31/2013.

    Posted 1 year ago #
  6. lumberjakpipester

    lumberjakpipester

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    So yes, feelf ree to go in full panic and buy your tobacco BEFORE 12/31/2013.
    Already started my friend!

    Posted 1 year ago #
  7. andrew369

    andrew369

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    Damn sure is horrible to see tobacco being hit so badly in the US now too. I live in Ireland but import from 4noggins since it is just insanely expensive to buy tobacco here, about $27 for a 50g tin. Anyone with a head for maths have an idea how much prices will actually go up by as a result of this?

    Posted 1 year ago #
  8. numbersix

    numbersix

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    Thanks for the update Sam.

    Anyone with a head for maths have an idea how much prices will actually go up by as a result of this?

    +1

    Posted 1 year ago #
  9. peckinpahhombre

    peckinpahhombre

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    A google search tells me that the current federal tax on pipe tobacco is currently $2.83 per pound (or a bit less than 18 cents per ounce).

    The above excerpt seems to be saying two things: (1) pipe tobacco will be taxed the same as RYO tobacco since pipe tobacco sold to end customers is "processed
    tobacco that is removed for delivery to anyone other than a manufacturer of tobacco products or exporter" , AND (2) the current tax on RYO tobacco of $24.78 per pound will increase by the same proportion as the increase on cigarette tobacco (ie by a factor of 1.94 times).

    If this is right, then the tax on RYO tobacco (which I take it from the above will now include pipe tobacco) will increase to $48.08 per pound, or $3.00 per ounce.

    Posted 1 year ago #
  10. peckinpahhombre

    peckinpahhombre

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    Am I reading that right? If so that is a >1600% increase in the current tax on pipe tobacco. Seems a little staggering to be true.

    Posted 1 year ago #
  11. misterrogers

    misterrogers

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    If this is right, then the tax on RYO tobacco (which I take it from the above will now include pipe tobacco) will increase to $48.08 per pound, or $3.00 per ounce.

    What's clear is, the politicians in Washington are smoking something out of a pipe, but it ain't no baccy.

    Now, I've noticed a tendency for this forum to get rather silly.
    Posted 1 year ago #
  12. peckinpahhombre

    peckinpahhombre

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    Further, if the Marketplace Fairness Act now in congress is passed, and if that legislation extends to state tobacco taxes and not just state sales taxes, we could easily see those living in the high-tax tobacco states paying about the same as we pay in Canada.

    http://finance.yahoo.com/blogs/daily-ticker/tax-free-internet-shopping-era-may-over-170449285.html

    Tobaccolypse is upon us, my brothers.

    Posted 1 year ago #
  13. andrew369

    andrew369

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    Posted 1 year ago #
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    Hopefully, most of y'all, who didn't see this earlier, now see the handwriting on the wall about the tripling of pipe tobacco by 2014 that folks like Harris and me have been espousing since last fall here.

    BTW, virginias cellar best.

    Posted 1 year ago #
  15. peckinpahhombre

    peckinpahhombre

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    Posted 1 year ago #
  16. rondyr

    rondyr

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    Time to spend every dollar of every paycheck this year on stocking up on tobacco.

    Rent? Electric? Clothes for the kid? Nah, tobacco is more important

    Still though... STOCK UP.

    I'm so awesome, I make myself jealous of myself.
    Posted 1 year ago #
  17. briarfriar

    briarfriar

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    From The Atlantic magazine:

    "Press coverage of tobacco taxes focuses on cigarettes, but other kinds of tobacco are affected too. One goal of the new proposal is to fix a disparity created by President Obama's first tobacco tax increase. Prior to 2009, pipe tobacco and roll-your-own tobacco were both taxed at $1.10 per pound. CHIPRA increased that to $2.83 per pound for pipe tobacco and a whopping $24.78 per pound for roll-your-own. Consumers, unsurprisingly, began substituting the former for the latter."

    Posted 1 year ago #
  18. peckinpahhombre

    peckinpahhombre

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    Thanks briar friar. So we are looking at a federal tax hike from 18 cents per ounce to 3.00$ per ounce. Ugh.

    Posted 1 year ago #

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