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42TOBACCOOUTLETBUSINESSMARCHAPRIL2009tiveAmericanreservations.Anditwillbeaarmorelucrativemarketorthosewillingtobreakthelaworsmuggle.Fortobaccoretailersinparticularthiswillbeadisasterbecauseitwillcutlegalsaleswaydown.x1dAtissueaswellistheactthatthenewtaxeswillalldisproportionatelyonlow-incomeAmericansx14exactlythedemographicthatthecurrentad-ministrationpromisedtoprotectromnewtaxes.PresidentObamarepeatedlypromisedinhiscampaignnottoraisetaxesonanyAmericanwhomakeslessthan250000notesBriantwhoaddsthatSCHIPdoesexactlythat.TeHeritageFoundationhasreport-edthatx1calargeportionotheburdenx1dwillallonpoorandlow-incomeami-liesandtherelativelyyoungpointingoutthatx1caroundhalosmokersareinami-liesearninglessthan200percentotheederalpovertyline.x1dx1cEightypercentothepeoplewhosmokemakelessthan75000ayearx1daddsSingleton.x1cAnd99percentmakelessthan250000.x1dCategoryCompliCationsTeByzantinestructureotheSCHIPundingprovisionsmeansthatwhilethelawwillimpactallareasotobaccotheex1ectwillvarygreatlybycategory.Teroll-your-owncategoryislikelytosu-ermostromthetaxhikesmandatedbySCHIPwhichcallsortaxestoskyrock-etrom1.09perpoundto24.78perpound.Seetablethispageandx1cRYOMYONewFateintheMakingx1dp.54.Cigarettesacategoryaccustomedtobeinghitwithtaxhikeswillseea61-cent-per-packincrease.Butthelawalsomarksthelargestsingletaxhikeorthecigarindustryx14aactthatworriesanumberomanuacturers.x1cItx19smind-bogglingx1dsaysoneprominentcigarmak-er.x1cOurcurrenttaxpaymento48750amonthwillgoto400206amonth.Itx19sanoutrageouslypunitivetax.x1dWhiletheInternationalPremiumCigarPipeRetailersAssociationwasabletosuccessullynegotiateacaponthetaxpercigaro40centsthatx19solittleconsolationtomanuacturersandretail-erswhodothebulkotheirbusinessonsalesoinexpensivecigars.x1cYoux19regoingromacapo4.8centstooneo40.26centspercigarandthatx19sabigjumpx1dsaysNickPerdomoounderoabacaleraPerdomo.x1cTatmeanspeopleTenewederaltaxratesmandatedbySCHIPgointoex1ectonApril12009.Telawalsorequiresthatretailerswholesalersandmanuacturerspayax1cfoorstockstaxx1donthedix1erencebetweenthenew2009taxratesseetablebelowandthecurrenttaxratesonalltobaccoproductsexceptlargecigarsthatareininventoryaso1201a.m.April12009.x1cEachretailerwholesalerandmanuacturerwillreceivea500creditto-wardthefoorstockstaxx1dreportsNAOx19somBriant.x1cHoweverthisisa500creditperretailcompanyorwholesalecompanyandnota500creditperstoreorwarehouse.TefoorstockstaxisdueandpayabletotheU.S.reasuryonorbeoreAug.12009.x1dSCHIPFeelingtheSqueezeProductCurrentRatesTroughMarch312009CigaretteandxfobaccoxfaxRatesEfectiveApril12009Cigarettes39centsperpack1.0066perpackLargeCigars20.719percentomanuacturerx19spricecapo4.875centspercigar52.75percentomanuacturerx19spricecapo40.26centspercigarLittleCigars4centsperpack1.0066perpackPipeobacco1.0969perpound2.8311perpoundChewingobacco19.5centsperpound50.33centsperpoundSnux158.5centsperpound1.51perpoundRYOandCigarWrappers1.0969perpound24.78perpoundCigarettePaper1.22centsper50papers3.15centsper50papersCigaretteubes2.44centsper50tubes6.30centsper50tubes