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Old 07-07-2012, 03:49 AM   #1
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Default Rider in Transport Bill taxes all cigarette manufacturers equally

Roll-your-own cigarette operations to be snuffed out - Business - ReviewJournal.com

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But a few paragraphs added to the transportation bill changed the definition of a cigarette manufacturer to cover thousands of roll-your-own operations nationwide. The move, backed by major tobacco companies, is aimed at boosting tax revenues.
Now what does rolling cigarettes have to do with transportation?
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Old 07-07-2012, 05:17 AM   #2
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Now what does rolling cigarettes have to do with transportation?
Absolutely nothing, as is the case with most riders. It's how our politicians get things passed that most likely could not get passed if introduced as a separate bill. What I would like to know is why these business folks are laying down so quick? I'm not an advocate of cigarettes but what happened here is that our government has just attacked and destroyed the livelihood of many people. But I guess the other side of the coin is that now these out-of-work small business owners can really start stimulating the economy by collecting unemployment insurance and food stamps.

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Old 07-07-2012, 06:37 AM   #3
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Would you look at that, another bill gets passed and no one hears about it until it's about passed.
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Old 07-07-2012, 08:16 AM   #4
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Would you look at that, another bill gets passed and no one hears about it until it's about passed.
---- like that irks me to no end.
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Old 07-07-2012, 10:08 AM   #5
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---- like that irks me to no end.
Me too...I don't smoke, but I get pissed off everytime the government gets another edge on control.
Makes me want to start a revolution...miatas and guns at the capital!!!
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Old 07-07-2012, 10:54 AM   #6
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Originally Posted by JasonC SBB View Post
Now what does rolling cigarettes have to do with transportation?
line liners:

Don't worry, obama will go line by line and veto out the pork.

You gotta pass the bill before you know what's in it.

ask yourself this: what does running our goverment have to do with ruining our country?

bro, rollin' ciggies is a way to transport tobacco.
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Old 07-07-2012, 12:50 PM   #7
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Govt: "ATTN, RYO industry: You must pay the same taxes as other cigarette manufacturers."

RYO: "OMG, we are killface."

Govt: "What? Y U no just pay tax?"

RYO: "We no haz money 4 tax."

Govt: "WTF? How you no haz money from selling tobacco?!?"


So, essentially, the bill requires that companies which are presently evading the payment of tax on cigarettes with a clever sleight-of-hand trick must now start paying the same tax as everyone else who sells cigarettes.

These companies are saying "Oh, woe is me. We haven't figured out how to make enough money from selling cigarettes to pay your tax. We will all simply have to go out of business rather than be treated equally."
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Old 07-07-2012, 01:06 PM   #8
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That sounds like a fair analysis, Joe. I'm sure you have more information on the operating expenses of these RYO companies and their profitability than the owners do. No doubt they are shutting their businesses down out of spite, just to show the government who's boss, not because these new taxes make their businesses untenable.
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Old 07-07-2012, 01:31 PM   #9
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There's a vast difference between spite and incompetence. If you can't make enough money from selling tobacco in Vegas to cover your taxes and fees, then you probably need to be in a simpler line of work anyway.
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Old 07-07-2012, 02:36 PM   #10
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So you've compared the tax rates and decided that the regulations originally designed for massive cigarette companies are also appropriate for mom-and-pop RYO shops?
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Old 07-07-2012, 02:47 PM   #11
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a) Are any of these taxes disproportionately more expensive for small businesses?

b) What does this have to do with transportation? These trojan horses are a MAJOR means by which unpopular and damaging legislation gets passed.
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Old 07-07-2012, 03:05 PM   #12
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Originally Posted by Joe Perez View Post
So, essentially, the bill requires that companies which are presently evading the payment of tax on cigarettes with a clever sleight-of-hand trick must now start paying the same tax as everyone else who sells cigarettes.
Joe, how can a company evade a tax to which it was never lawfully subject? That's like saying I'm evading California sales tax whenever I buy something off a person who advertises on Craigslist.

Personally, methinks big tobacco just didn't like the competition and found a way to get rid of it through this legislation.

Ray
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Old 07-07-2012, 03:08 PM   #13
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Originally Posted by Braineack View Post
line liners:

Don't worry, obama will go line by line and veto out the pork.
Last time I checked, Obama doesn't have a line item veto option.

I don't agree with how this was passed, but it makes sense. You can't build a business around a tax loophole and then bitch when the loophole gets eliminated.
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Old 07-07-2012, 03:09 PM   #14
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Originally Posted by RayinNorCal View Post
Joe, how can a company evade a tax to which it was never lawfully subject? That's like saying I'm evading California sales tax whenever I buy something off a person who advertises on Craigslist.
You are.

This thread has potential.
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Old 07-07-2012, 03:20 PM   #15
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I don't agree with how this was passed, but it makes sense. You can't build a business around a tax loophole and then bitch when the loophole gets eliminated.
How was it a "loophole"? The tax code is a million layers of various incentives and disincentives created at different times for different purposes, each layer creating a hundred new layers of unintended incentives and disincentives.

A "loophole" implies that the rest of the tax code is a tightly-woven and coherent document. It is not.
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Old 07-07-2012, 03:35 PM   #16
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Quote:
Originally Posted by mgeoffriau View Post
So you've compared the tax rates and decided that the regulations originally designed for massive cigarette companies are also appropriate for mom-and-pop RYO shops?
Yes.



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Originally Posted by JasonC SBB View Post
b) What does this have to do with transportation?
Absolutely nothing at all.

The concept of affixing "riders" to popular legislation is relatively new (it did not become especially commonplace until the early 1900s) however it has been affirmed as legal, and is now almost completely customary and expected.

The counterforce for this is the line-item veto, which allows the executive to over-rule single riders within larger and more important bills. This use is still fairly common at the state level, although at the federal level it was found unconstitutional in 1998 in the US District Court of DC, and that ruling was affirmed later that year by the Supreme Court (Clinton v. City of New York 524 U.S. 417) You can read the full text of the Supreme Court decision here.


(Jason will now argue that this concept was not thought of by the Founding Fathers, which makes it "wrong" despite being legal and constitutional.)



Quote:
Originally Posted by RayinNorCal View Post
Joe, how can a company evade a tax to which it was never lawfully subject?
Are you familiar with the name Smokey Yunick?


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That's like saying I'm evading California sales tax whenever I buy something off a person who advertises on Craigslist.
You are.

Like most states, the state of California State Board of Equalization requires that its residents pay a Use Tax on purchases made for which normal Sales Tax is not collected. This includes both private transactions and purchases made from out-of-state vendors (eg: mail order).

Enforcement of this law is relatively lax, however it is the law. When you filed your 2011 California income tax, this was line 95 on Form 540. You are permitted to make a single "Estimated Use Tax Liability" payment in lieu of computing the actual tax liability, based on income. For taxpayers with an AGI of between $100,000 and $149,999 for instance, the Use Tax Liability is $88. (see pages 14-15 of "Instructions for Form 540 / 540A)


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Personally, methinks big tobacco just didn't like the competition and found a way to get rid of it through this legislation.
And that may well be true.

An important consideration however, and one which I've not seen raised, is that everyone seems to be taking it on faith that this is, in fact, driving all the little guys out of business. While I'm sure that they'd prefer not to have to pay their fair share (I mean, who wouldn't?) it's probably a tad naive to simple take them at their word when they say "Oh, this is just going to drive us out of business," as though we are totally unfamiliar with the use of hyperbole and drama in business.
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Old 07-07-2012, 03:36 PM   #17
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It's all politics.... But +1 AGREED!
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Old 07-07-2012, 03:50 PM   #18
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The concept of affixing "riders" to popular legislation is relatively new (it did not become especially commonplace until the early 1900s) however it has been affirmed as legal, and is now almost completely customary and expected.

The counterforce for this is the line-item veto, ... at the federal level it was found unconstitutional in 1998 in the US District Court of DC, ...

(Jason will now argue that this concept was not thought of by the Founding Fathers, which makes it "wrong" despite being legal and constitutional.)
I don't put much faith in the Supreme Court (see Dredd Scott, and Patriot Act), and no I don't put the Founders on as high a pedestal as you assume I do.

Here's a better way than the line item veto:
It's called "One subject at a time".

https://secure.downsizedc.org/etp/one-subject/
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My team created the "One Subject at a Time Act" (OSTA) to make you more powerful. Most legislation aims to control you, but OSTA will control Congress instead. It will . . .
Stop Congressional leaders from passing unwanted laws by attaching them to popular, but unrelated, bills.
Require each bill to be about ONLY one subject, and to stand or fall entirely on its own merits.
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..everyone seems to be taking it on faith that this is, in fact, driving all the little guys out of business. While I'm sure that they'd prefer not to have to pay their fair share (I mean, who wouldn't?)
Taxing businesses and corporations merely turns them into tax collectors, collecting taxes on consumers. It is also a tool for those in power to pick winners and losers. I would like to see corporate taxes to go to zero, and if one believed in Minarchy, prefer that the only taxes are a straight sales tax (~15% ish, that's all the gov't gets). The Fed Gov also should only be funded by the States and not by taxes on individuals.
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Old 07-07-2012, 03:54 PM   #19
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Originally Posted by mgeoffriau View Post
How was it a "loophole"? The tax code is a million layers of various incentives and disincentives created at different times for different purposes, each layer creating a hundred new layers of unintended incentives and disincentives.

A "loophole" implies that the rest of the tax code is a tightly-woven and coherent document. It is not.
It's the exploitation of something that doesn't make sense in the tax code. Yes, there are a lot of those occurrences but that doesn't make it wrong to fix it.

It's like an out of state mailorders complaining about a state collecting sales tax by claiming they can't be competitive now. Other businesses are already subject to that sales tax and the government is now making the marketplace fair for everyone, not singling the mailorders out and running them out of business.
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Old 07-07-2012, 06:00 PM   #20
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Green party seems pretty good
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