SCHIP Leads to Closure of Cigar Factory

I was on Twitter last night (@Travis_Lindsay) and I saw this Tweet from @taxfoundation about a cigar manufacturer closing down due to a new tax, SCHIP. Here is the important part of their post:

    Tampa will lose part of its cigar heritage in August when Hav-A-Tampa shuts its factory near Seffner and lays off about 495 employees, closing a factory that has been operating since 1902.[…]
    However, the company attributed much of its trouble to the State Children’s Health Insurance Program, or SCHIP, a federal program that provides health insurance to low-income children. It is funded, in part, by a new federal tax on cigars and cigarettes. McKenzie couldn’t say how much sales of Hav-A-Tampa cigars had fallen off, but the numbers have dropped significantly, he said.
    Previously, federal excise taxes on cigars were limited to no more than a nickel, said Norman Sharp, president of the Cigar Association of America trade group. The tax increase, which took effect April 1, raises the maximum tax on cigars to about 40 cents, Sharp said.

Hav-A-Tampa cigars aren’t premium cigars so I personally won’t be affected by this closure but, still, 500 employees is 500 employees and there were people who did smoke these wood-tipped cigars. It’s too bad that SCHIP has caused this company to close. I just wonder how this will affect the “jobs saved or created” metric and what other small scale cigar companies will eventually close because the taxes are too injurious.

Published by Travis Lindsay

I am a guy who smokes cigars.

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