Cigar Association of America, Inc.

The national trade organization of cigar manufacturers, importers and distributors as well as major suppliers to the industry.
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Cigars and Taxes

Question: 

Why shouldn’t cigars be taxed like cigarettes?

Answer: 

Cigars are a product for adults and the tax system shouldn’t be used by any level of government as a way to punish adult consumers for the choices we make. No industry, including the cigar industry, should be singled out for taxing for political reasons. And it seems clear that the rhetoric supposedly justifying the targeting of cigars is largely based on innuendo and anecdote.

First, cigars are not cigarettes. According to the National Institutes of Health, “Most cigarette smokers smoke every day. In contrast, as many as three-quarters of cigar smokers smoke only occasionally, and some may smoke only a few cigars a year.”

Proponents of raising taxes on cigars claim that equal tax treatment to cigarettes is justified as a way to discourage youth smoking by driving up the price. But according to the 2006 National Survey on Drug Use and Health, the incidence of current usage of cigars by underage youth declined significantly between 2004-2006.

Then there’s the law: The sale of tobacco products of any kind to minors is against the law. If the law isn’t being enforced or the penalties are too lenient to deter this already illegal activity, that should be the policy focus, rather than targeting an entire industry and its adult customers.

A second approach by those pushing higher taxes on cigars focuses on little cigars and the claim that little cigars are the same as cigarettes and deserve the same tax treatment. But little cigars are fundamentally different from cigarettes. The two products contain different tobaccos, have different smoking characteristics and appeal to different market segments. While there is no confusion between the two different products among consumers, there’s no question that our industry must constantly work to keep policymakers informed and aware of these differences.

One thing is certain, those who want to impose unfair taxes on the cigar industry and consumers begin their arguments with assumptions they want the public to believe rather than question; first that the existing youth possession and sales laws aren’t enforced or working, and second, that the rights of adult consumers of cigars don’t matter. These assumptions need to be challenged constantly in the debate over tax policy.