Author Topic: Feeling a might bit ornery...  (Read 9813 times)

RevDisk

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Re: Feeling a might bit ornery...
« Reply #25 on: April 13, 2009, 01:30:23 AM »
Good idea but cigars may soon be a thing of the past, what with the huge tax increase that took effect April 1.  The per-pound tax on bulk roll-your-own terbacky went from $0.07 to $27.  Yes you read that correctly.  From seven cents to twenty seven dollars per pound.  If my math is right that's a 38,471% increase. (would one of you math whizzes please verify my calcs?)  I think small cigars were hit also hit with a pretty stiff increase.


Yea, Canada is already doing brisk business selling to smugglers and black market types.  Expect a boom in tobacco stores near the border.   An 38,500 percent increase in taxes isn't an attempt to raise revenue, it's essentially a ban.  I'd argue it's a direct attempt to turn more citizens into criminals. 

It's hitting small time tobacco stores pretty hard.  Most are closing.  Any gas station can usually beat them on price, and they generally don't sell tons of packs in any event.  They made their money on smoking accessories (pipes, lighters, ash trays, etc), roll your own supplies and machines and unusual brands of tobacco (more or less in that order).  Direct cigar and cigarette sales are typically break even at best. 

Now brick n' mortar tobacco stores will be dead, with the accessory market moving online or to Walmart. 
Plus, a lot of manufacturers of roll your own supplies and machines were domestic.  They'll downsize or go under.   More manufacturing jobs down the toilet.


Some folks did massive bulk purchases of tobacco before the de facto ban.  Built humidifiers and special enclosures to try to make it last longer.   

Maybe I'm just depressed or something, but I see them doing the same to ammo as a means of actually killing the 2A.   Don't ban it outright.  It'd be illegal and too much opposition.  Instead, toss a 38,500 percent tax on reloading supplies and a smaller tax on commercial rounds.  Once reloading is dead, keep up'ing the tax on commercially manufactured ammo until no one can afford it. 

"No one is banning guns!  You can buy ANY gun you want.  Sure, each round costs $10-20, but it's legal and the taxes go to fund a program with a fluffy name that no politician wants to defund."

THAT is how they will kill the 2A.
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Balog

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Re: Feeling a might bit ornery...
« Reply #26 on: April 13, 2009, 01:56:18 AM »
Wow, I hadn't heard about the tax increase. I don't roll (or smoke) cigarettes but that sucks a lot. I wonder if pipe tobacco is hit as well?
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AZRedhawk44

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Re: Feeling a might bit ornery...
« Reply #27 on: April 13, 2009, 10:33:51 AM »
When did this tobacky tax come about and when did it go into effect?

About 2 months ago I went and bought a handful of Monte Cristos at the neighborhood smoke shop and didn't hear anything about this... they were more expensive than I would have liked, but not 385x the regular price...  I think I paid about $7 each for them.
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Viking

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Re: Feeling a might bit ornery...
« Reply #28 on: April 13, 2009, 11:00:25 AM »
Funny, they did that over here bunch of years ago. Need I say that tobacco smuggling became VERY profitable in an instant? And that was only after they raised the taxes so a pack of smokes became like 70 cents more expensive. Hell, with those kinds of taxes, one could make a fortune in smuggling...
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Balog

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Re: Feeling a might bit ornery...
« Reply #29 on: April 13, 2009, 11:52:23 AM »
Hmmm, I do live only a few hours from Canadia.....  :angel:
Quote from: French G.
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If government is the answer, it must have been a really, really, really stupid question.

Brad Johnson

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Re: Feeling a might bit ornery...
« Reply #30 on: April 13, 2009, 12:30:21 PM »
When did this tobacky tax come about and when did it go into effect?

About 2 months ago I went and bought a handful of Monte Cristos at the neighborhood smoke shop and didn't hear anything about this... they were more expensive than I would have liked, but not 385x the regular price...  I think I paid about $7 each for them.

April 1.

I don't know what the tax hike was on cigars.  Someone else will have to fill us in on that. 

Here's the kicker ... the tax is assessed at the manufacturer.  That means the retailer sees the hike as an increase in cost.  They have a profit margin built into their retail price calculations, so any increase in cost ends up being a cost plus margin/markup to the customer.  In other words that $27 tax hike at the manufacturer ends up being a $35-$45 per pound price increase on the shelf.

The net local effect on RYO tobacco was that a 6oz bag - roughly a carton's worth - went from $6 to $22, and a pound bag from $16 to $55.  Some online stores are being a little smarter, upping the price by only the extra tax and charging $18 and $42 for the same products.  But then you have to pay for shipping.

Brad
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Werewolf

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Re: Feeling a might bit ornery...
« Reply #31 on: April 13, 2009, 04:26:29 PM »
Ya know...

It is possible...

That with terbacky taxes going up so very, very much...

That F Troop will concentrate more on the T in ATF than the F and give us gun guys a break for a while...

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Antibubba

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Re: Feeling a might bit ornery...
« Reply #32 on: April 13, 2009, 10:07:47 PM »
I bought a cigar this morning, and it wasn't that expensive.

Any stupidly high ammo tax will be challenged in court.  The Constitution doesn't mention tobacco.
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PTK

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Re: Feeling a might bit ornery...
« Reply #33 on: April 13, 2009, 10:48:51 PM »
Yeah, here in CO people have mostly ignored it and simply bought tobacco off Native Americans for a while now. Good way to go, really...  =D
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Re: Feeling a might bit ornery... (UPDATE 06/23/09 -Brad)
« Reply #34 on: June 23, 2009, 06:08:13 PM »
A quick resurrect on this thread for two reasons...

First I had the wrong numbers for the the tax increase on bulk tobacco.  Previously in this thread I said the hike was from seven cents up to $27 per pound.  The increase actually went from a dollar and seven cents to $24.78.  That's a 2,159 % increase, not 35,000 as a calc'd before.

Second, many of the bulk tobacco mfgs have come out with a new line of flavored pipe tobacco that lacks the heavy flavoring oils, nor is a cavendish.  It's pipe cut so it isn't taxed as a cigarrette tobacco, the flavorings are so mild as to border on non-existant, and the lack of oils means it will stuff accepably using premade tubes and mechanical injectors.  It is fast becoming a fav of the RYO crowd.

Brad
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Waitone

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Re: Feeling a might bit ornery...
« Reply #35 on: June 23, 2009, 07:46:33 PM »
My favorite bundle of 25 went from $26.95 to $34.95.  Two things will happen as the tobacco tax settles.  It will destroy the low end market.  Low cost machine made and low end hand rolled cigars will go away.  The high end will thrive.

Second, alternative channels of distribution will emerge which are not subject to federal tax.  What our elected idiots in congress just can't get through their heads is there is a limit to taxes.  At some point it becomes economically practical to change behavior to avoid taxation.
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MicroBalrog

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Re: Feeling a might bit ornery...
« Reply #36 on: June 23, 2009, 10:57:12 PM »
Quote
At some point it becomes economically practical to change behavior to avoid taxation.

Oh, they understand this perfectly.
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Headless Thompson Gunner

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Re: Feeling a might bit ornery...
« Reply #37 on: June 23, 2009, 11:28:37 PM »

I don't know what the tax hike was on cigars.  Someone else will have to fill us in on that. 

My memory is foggy, but I believe the new tax on cigars is 50% of the import price or wholesale price.  It works out to a buck or 3 per stick, depending upon just how expensive your favorite cigar is.

I hope you stocked up.

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Re: Feeling a might bit ornery...
« Reply #38 on: June 23, 2009, 11:37:11 PM »
Quote
My memory is foggy, but I believe the new tax on cigars is 50% of the import price or wholesale price.  It works out to a buck or 3 per stick, depending upon just how expensive your favorite cigar is.

Sounds about right. I bought my first cigars since the tax hike and a previously $9 cigar was running about $11.
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Regolith

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Re: Feeling a might bit ornery...
« Reply #39 on: June 24, 2009, 03:18:15 AM »
My dad started rolling his own cigarettes a couple of months ago to save money.

He also voted for Obama. I think he's starting to regret it.

I tried to tell him "I told you so" but he isn't one to admit to mistakes easily...

Today he jokingly asked me if I thought he'd turn up any good results if he Googled "black market tobacco."  If he thought of doing it, I can damn near guarantee there will be a lot of people actually doing it.  All the government did with that tax increase was effectively create a black market for tobacco.   Idiots.
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PTK

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Re: Feeling a might bit ornery...
« Reply #40 on: June 24, 2009, 09:55:29 AM »
And here we go. I'm already seeing Djarum Blacks roll in from Canada, selling for $5/pack. That didn't take long at all....
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Balog

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Re: Feeling a might bit ornery...
« Reply #41 on: June 24, 2009, 09:59:14 AM »
You know, I'm not that far from Canada..... How does one market contraband tobacco? :D
Quote from: French G.
I was always pleasant, friendly and within arm's reach of a gun.

Quote from: Standing Wolf
If government is the answer, it must have been a really, really, really stupid question.

RevDisk

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Re: Feeling a might bit ornery...
« Reply #42 on: June 24, 2009, 11:01:07 AM »
You know, I'm not that far from Canada..... How does one market contraband tobacco? :D

The smartest thing is to find a Native American reservation, hit up the tobacco store on the reservation, and then resell to steady customers.  Canada smokes are taxed too, and a lot of them have very visually different packaging.  Stick to the reservations, cheaper and identical packaging.  Internet purchases are ok for individual purchases, but not bulk smuggling.  Too easy to trace via shipping and credit card records.   

Our old friends at the BATFE are gearing up for war against the expected surge in tobacco smuggling. 

Additionally, check your state laws.  Unstamped domestic tobacco might be legal in small amounts.  Some states legally allow you to possess an amount of tobacco products purchased out of the state.  In PA, you are allowed to possess one carton of cigarettes without the PA tax stamp.  It was intended to protect folks if they were traveling from some other state, bought a carton along the way, and were going through or into the state.  A lot of states have these provisions, but not all.
« Last Edit: June 24, 2009, 11:07:48 AM by RevDisk »
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Scout26

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Re: Feeling a might bit ornery...
« Reply #43 on: June 24, 2009, 11:51:42 AM »
Is growing your own illegal ??
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Re: Feeling a might bit ornery...
« Reply #44 on: June 24, 2009, 02:26:45 PM »
JD

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Balog

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Re: Feeling a might bit ornery...
« Reply #45 on: June 24, 2009, 02:29:40 PM »
Legal but generally impractical was my take on the GYO option.
Quote from: French G.
I was always pleasant, friendly and within arm's reach of a gun.

Quote from: Standing Wolf
If government is the answer, it must have been a really, really, really stupid question.

Viking

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Re: Feeling a might bit ornery...
« Reply #46 on: June 24, 2009, 03:36:06 PM »
You know, I'm not that far from Canada..... How does one market contraband tobacco? :D
I'm not sure how economically viable tobacco smuggling is on a relatively small scale, but over here, smuggling alcohol from Germany can be quite profitable. Friend of mine and her BF takes their Volvo, hooks up a trailer, starts late Friday, drives down to southern Sweden, catches the ferry, fills up with the stuff people ordered, heads home. A good run nets them about $600-700 in lovely untaxed profit. They are usually home late Saturday/early Sunday. Lovely gig if you are a college/university student living in a dorm. Wouldn't need any loans/grants...
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