You don’t have to be a rocket scientist to know that you cannot put the burden of taxation on one industry and expect that industry to survive. But apparently our President and Congress don’t even have that much of an understanding of basic economics. But once again, they are blowing smoke up our… well, just read the following.
We now have our first business obituary as the direct result of the 700% tax increase placed on the tobacco industry to support the S-CHIP legislation. The iconic 107 year-old Hav-A-Tampa Cigar Company(located in the Tampa neighborhood known as Ybor City) announced it has no other choice but to close its factory leaving its 500 workers unemployed, all due to the 700% tax increase levied with the passage of the S-CHIP legislation.
Now before all you non-smokers smirk and and celebrate, let me paraphrase Martin Niemöller:
“When they came for the tobacco users, I remained silent, because I don’t smoke.”
Once the tobacco industry has been wiped out in this country, what makes you think for a moment Obama and his bunch of grinning idiots won’t go after a hefty tax on soft drinks, candy bars, beer, wine, ice cream and snack foods? After all, these are all “weapons of ass destruction” in the war on obesity are they not?
For the 90% in Congress too stupid (or indifferent) to understand business economics 101, here it is in plain English: If a business has to raise the federal tax on its product by 700%, customers will simply give up the product. In the case of Hav-A-Tampa cigars, these were cigars for the average working man: high quality and, most important, affordable to those on a tight budget. But no more. Most of their customers will simply have to stop smoking cigars.
That’s exactly what’s happening now, and the parent company of Hav-A-Tampa, J.C. Newman, has done the math. They’re finished in Tampa. Not because of the prolonged recession. They made it through 2 World Wars and a depression. But they can’t survive the Obama administration. So they will re-locate their cigar production, out of necessity, to an off-shore location where lower wages will help make up the difference, leaving 500 more skilled workers unemployed in Tampa. Wanna bet that doesn’t show up in Obama’s statistics of jobs created or saved?
Eric M. Newman, president of the J.C. Newman Cigar Co. (which was founded by his grandfather in 1895), and president of the Cigar Manufacturers Association of Tampa sums it up perfectly in a local news article recently (emphasis is mine):
“Soon the factory will be gone. It is a sad day for the city of Tampa and its historic cigar industry, but the greatest tragedy is that this factory closing could have been avoided.
The deep recession has been challenging for Hav-A-Tampa, like all businesses, but the company was coping. The tipping point that pushed Hav-A-Tampa over the edge was the enormous 700 percent tax increase that Congress imposed on the cigar industry two months ago in order to expand health care for needy families.
Cigar-makers supported expanding the State Children’s Health Insurance Program. We believe everyone should have access to quality health care.
What we opposed was Congress’ decision to fund the expansion of this government program by taxing a single industry. Health care should be a shared responsibility.”
Indeed, if this program must be shoved down our throats, the burden should have been shared. However, in the typical fashion demonstrated by Obama and his lack of experience, he singled out ONE industry. Only a fool would believe a single industry could bear the costs related with his wild-eyed Utopian concept. Indeed one can only wonder was this the biggest political miscalculation since Japan attacked Pearl Harbor or was this merely a calculated smoke screen (pun intended) to destroy the tobacco industry once and for all? Mr. Newman avoided asking that question. I ask it on his behalf. Newman continues:
“We pleaded with the leaders of Congress not to tax us out of business. We explained how a 700 percent tax increase would cost jobs and force some cigar companies to close their doors. Sadly, our pleas fell on deaf ears and what we feared has become reality. When will Congress understand that it cannot dramatically raise taxes on businesses without costing jobs?
How ironic it is that many former Hav-A-Tampa employees could soon need assistance from the very government program whose expansion cost them their jobs and health insurance in the first place.
Business is challenging enough these days. By continuing to impose additional tax increases on already burdened businesses, Congress and state legislatures could quickly decimate an entire historic industry. When will our leaders learn?”
Uh, Mr. Newman? Hopefully that lesson will be taught to Congress in the mid-term elections and to the current resident of 1600 Pennsylvania Ave.
Many of us are counting the days.