“GOVERNOR PATTERSON, LET THESE REGISTERS RING!”
Saturday, June 19, 2010 at 11:03AM New York City, 18 June…With those words, Glynn Loope, Executive Director of the CRA, ended his brief, but pointed, remarks at the New York Tobacconists Association Press Conference on Friday, 18 June.
The event was held at De La Concha and was attended by a large number of Tobacconist/Retailers and the press. The Daily News, New York Post, Fox News and others were present from the media. The cigar media also turned out, taking notes and pictures and videos.
The event was occasioned by Governor Patterson’s proposed 90% tax on cigars and other tobacco products. The group maintains that such an onerous tax will cause many, many shops to close; with the attendant loss of jobs.
The present tax is 46%. The tax was raised to the present level about a year ago, from 37%. As with all such ‘sin taxes’, the extra 9% did not yield anywhere near the monies the state anticipated; they never do. Sales inevitably drop off, thereby marginalizing the benefit to the Budget.
Nonetheless, damage is done to the industry, composed of largely small ‘momma poppa’ enterprises. Yet the businesses employ a large number of people and the consequences of shops closing would be significant, particularly in today’s economic situation.
All of these points were made by speakers such as NYTA President, Ron Melendi or De La Concha, Glynn Loope, of CRA and George Brightman of J.Barbera.
Boris Grossman, the owner of Matador, a Long Island shop, made the point that all his savings are invested in the shop – which opened a little more than a year ago. Grossman noted he has a wife, children, a mortgage and he fears the possible loss of his home if this tax is passed.
Representatives of The Gotham Group, the lobbying organization retained by the NYTA, were the opening and closing speakers and laid out the issue very clearly. A 90% tax will cost jobs.
As if to substantiate the claims of shop closings and lost jobs, Uptown Cigars in Kingston, NY was closing this very day, as a result of the damage caused their business by the existing tax level.
Michael Herklots, General Manager of two (2) Davidoff of Geneva shops in Manhattan, made very poignant remarks about what these shops provide to their clients, beyond selling and cigar. “We create and support communities…doctors, lawyers, businessmen all of whom come to our shops to relax and enjoy their cigars. With the new tax; there will be a tremendous fall off in purchases, and visits to the shops as the purchasing goes ‘underground’ as it did during Prohibition. Or, it will be done in other states and NYS will lose all the revenue.”
Onerous taxes, Ron Melendi noted, will force buyers to shop elsewhere – in nearby states and on the internet. The state will not receive the revenue from the new tax level that they anticipate – some $40 Million – and will lose NYS Sales Tax as well. Ultimately, the tax will prove revenue negative; but the damage will have been done.
These taxes, noted George Brightman, are levied on small business, and they prove to be punitive; while the Governor refuses to address the true problem…a bloated government. Cut the operating costs, don’t destroy an industry to sustain it, was the basic message.
It is worth noting that these shops are selling a perfectly legal product and are forced to display a sign, in the shop, that illustrates diseased lungs or rotted teeth (See photo), to deliver the State’s anti-smoking message. In the meantime, on request, the NY Health Department will send you a booklet instructed on “…the proper way to inject Heroin”! (See photo).
This occasion was probably the last public statement by the organization, before the Legislature votes on the budget.
Reader Comments (2)
When will the governor and his constituents realize that higher taxes means loss of business and in turn loss of revenue for that area. If people realized what revenue these businesses generate for their area they would do ALL they could to keep them earning monies and supporting townships. If they go guess who pays? The residents that's who with higher taxes that us citizens have to bear. Now tell me governor how will that help ANYONE?
As always Gary spot on with up to date info. It's always refreshing to hear you speak the truth regarding taxation and fighting for our rights to enjoy the pleasures of life. My resolve to fight these issues continues to be strong and I will not let politicians and others forget the things they do especially when election time rolls around. Enjoy your stay in office people it will be short lived!