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Jewish World Review June 18, 2001 / 28 Sivan, 5761

Debra J. Saunders

Debra J. Saunders
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Consumer Reports

Freedom is a puff of smoke -- MARTY Pulvers feels the way you'd feel if California wanted to tax your livelihood into oblivion.

Pulvers is a tobacconist. His S.F. establishment, Sherlock's Haven, serves as a lunchtime retreat for the cigar and pipe aficionado. John Alvarez often comes for a lunch-time smoke -- Thursday he was working on a $6.25 Carlos Torano. (It's legal to smoke in tobacco shops -- even in California.)

"I come here because of the guys," Alvarez said, pointing toward three fellow puffers. Not all the guys are guys though. Ask Delores Chong, who came to enjoy a cigar.

On Thursday, the state Board of Equalization may vote to increase the tax on cigars and pipe tobacco from an already steep tax of more than 50 percent of the wholesale price to 123 percent, or more, starting July 1. (This is where I should explain that it is the Board of Equalization's job to levy a tax on other tobacco products that is equivalent to the state tax on cigarettes.).

"Tobacconists, such as myself, (owners of) true specialty shops, will be the only business truly impacted," Pulvers noted. "Safeway does not care what the cost of Skoal or Copenhagen is to their customers."

How is it that an unwatched state board could be poised to squeeze the life out of some 500 small businesses with so little notice?

The story starts with California Assembly woman Barbara Matthews, D-Tracy, who proposed changes in the taxation of low-priced chewing tobacco. "I think she believes she was doing a good thing," said Paul Knepprath of the American Lung Association. He feared the bill actually would have boosted sales for what is called -- go figure -- "premium" chewing tobacco. The lung lobby, American Heart Association and tobacco foe Rob "Meathead" Reiner came out against the Matthews changes.

Too late for Pulvers. Once some BOE board members -- most notably Johan Klehs -- started looking at a low-priced entry tobacco product for teens, they went drunk with power and asked staff to calculate rates high enough to reduce consumption by 25 percent, including for adult products.

As GOP Board of Eq (pronounced Eeeek!) member Claude Parrish noted, "I guess election time is coming and others on the board are running for higher offices." Democrat Klehs is expected to run for state controller.

Quipped Parrish: "It's a pretty messy situation. We're going to have to put spittoons in the BOE building."

Klehs said he hasn't made up his mind about the tax proposals, but, "There is no redeeming reason for people to use tobacco."

Pulvers feels the same way about fast food. "It smells bad. It's bad for you. It tastes terrible." But we don't tax McDonald's out of business.

There's a big question as to whether it is even legal for the board to raise the tax, when its mandate is to set an equivalent rate. Reiner so feared legal challenges to the initiatives he backed that he urged members to leave the "surtax calculation process as it is now and as it was clearly intended by Propositions 10 and 99."

GOP board member Dean Andal, who is running for controller, sees himself as "a hugely Libertarian guy." Still, Andal voted for California's public-smoking ban. He hates anything that tempts kids to use tobacco, but noted, "I'm pretty much willing to let adults be on their own. That's what freedom is about."

Cross your fingers some pol doesn't get the bright idea to tax French fries -- which leads to a Board of Eq vote on taxing your livelihood.

Comment JWR contributor Debra J. Saunders's column by clicking here.


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© 2000, Creators Syndicate