S-CHIP Required Reading

[macpappy]

I don't understand his logic in the 70% increase he is predicting.

I don't think/believe the government is going to place a tax increase on most manufacturers since they are not U.S. companies so their cost of business shouldn't go up. The same should be true on US companies, I haven't seen anything to suggest that their cost of business will go up because of SCHIP. The local B&M are going to be the ones hit first because they will have to pay the increase on everything they order. So, if you take a box of 20 cigars that normally has a wholesale price of say $80. Add to that the 40 cents per stick SCHIP tax increase ($8.00) and the wholesale cost goes up from $80 to $88 per box. I would hope that the B&M would do the right thing and only increase the retail price by the amount of the tax increase also. This would take a $5.00 cigar and raise the price to $5.40 per stick.

Now I am not sure how the wholesaler is affective by the tax increase since he is buy directly from the manufacturer. Will the wholesale be required to pay a tax on the price of the cigars from the manufacturer? My foggy understanding was that the tax would be based on what the wholesaler sold the cigars to the retailer for.

I've talked to my local B&M owner and he said that is what he plans to do when forced to. He figures if he increases the price more than he absolutely has to that he will lose business.