THE NEW YORK TIMES. MONDAY, APRIL 11, 1960. A KOREAN BONUS Rockefeller Adviser Also By DOUGLAS DALES Lieut. Gov. Malcolm Wilson expressed the hope yesterday that the Legislature and the voters would authorize a bonus for veterans of the Korean conflict. He also declared that he would like to see the Legislature grant relief from the "harmful" effects of the state's 15 per cent tax on tobacco and cigars. He said he would be in the "vanguard" of those favoring an income-tax cut if such action appeared possible next year. The Lieutenant Governor, one of Governor Rockefeller's closest advisers, is the first top administration official to come out in favor of a Korean War bonus. His views were expressed as guest on the WRCA-TV "Direct Line" program, in which ques tions are telephoned to the studio by viewers. I ISAP TAKES WERE EASILY EVADED BY COMMUTERS, VACATIONERS, VISITORS Teranids of daily commuters not only stopped buying cigars in New York" teen tegen bringing them in for their friends, from tax-free New Jersey and tonmeewisut. Cgans were "imported" into New York as a "convenience to customers. tord premously been brought korozalily They The Demo Free Press reported that "Srote Revenue Depo-men offices Domi many persons buy sigots in Chip and indiano and bring them not to wiichigan.. * See Following pages for detailed documentation State Levy on Cigars Brings Continued From Page 1 ment of Taxation and Finance on the fifteenth of each month for purchases made in the previous month. However, the boot leg merchants, who are in a minority, just do not file, Tax Revenues Down The illegal traffic has made great inroads into the expected New York tax retenues, according to trade sources. They expect that revenues from the state cigar tax in the fiscal year ending March 31 will amount approximately $3,000,000, considerably less than the $5,000,000 or more predict ed when the tax went into ef to Another declared, "We'ret Ssics Were Up 10% counting on the Christmas business to keep us out of the red." Until the imposition of variAnother result is that the tax the last half of this year naous state taxes on cigars inį has led many smokers to switch tional cigar sales were running to cheaper brands of cigars. A about 10 per cent ahead of last 10 cent cigar is now 12 cents. year. Some 8.400.000.000 cigars & 25-cent cigar now sells for were consumed in 1958. 29, and a box of cigars that retailed for $10 has risen to tuted $11.50. 'Retrogression by Taxation* On July 1, Vermont insti a 20 per cent tax on cigars and Washington State a 25 per cent tax. Also in July, One retailer in the Times tax to 20 per cent of the whole Minnesota increased its cigar Square area said: "I'm selling more 5-cent ct- increased its tax brackets on sale price and South Carolina gars now than ever before. My the smoke by 60 per cent. Texas customers who used to smoke! the 15-cent brands have switched and Alabama also have state to the 10-cent ones and many taxes on cigars. of my old quarter-brand buyers Clarence M. Weiner, econ now insist on 20-cent smokes. omist of the Cigar Manufac It's retrogression by taxation. turers Association of America. Inc., said the sharp decline in cigar sales actually began in bers in recent weeks and spot- The cheaper cigars are go- with the imposition of new and July, 1959. He said it coincided checked their inventories and ing over big. But business as a tax records. whole is so damn bad we don't sharply increased state taxes even post the various changes fect. These sources say that state tax investigators have visited Another large retailer comvarious cigar retailers and job-mented: on cigars. in prices any more because of Mr. Weiner said that cigar Some of the large cigar re He said However, it was pointed out that the task was practically an impossible one because of the thousands of cigar merchants in the state and the limited number of investigators tailers in the garment center that the 8 per cent decline in available. They added that most have been especially hard hit. the third quarter had canceled of the state's checking must be The district is the world's larg- more than half the gains of the concentrated on such high tax-est user of fine cigars. One dress preceding six months. producing items as gasoline, cig- manufacturing company, which arettes and race-track betting. used to purchase thousands of The thousands of merchants expensive cigars for the conhandling cigars in this state venience of its customers from However, he said, volume was so strong during the first half of this year that sales in 1959 will still exceed last year's have also been hurt in another a Seventh Avenue dealer, now, figure and amount to about New Some jobbers and retailers in 6,800,000,000 units. This would be the highest volume since 1924, when 7,002.582,000 cigars were consumed. War II, cigar sales hovered be In the decade following World tween 5,500,000,000 and 6,000,000,000 a year. In 1957, con000,000 units. The record year sumption moved to 6,100 for the industry was in 1920. when 8,500,000,000 went up in smoke. Sales have been rising in way by the cigar tax. The vol- buys its cigars in New Jersey. ume of their total business, The cigar manufacturers have which normally includes ciga- fared better than the retailers rettes, candy, smoking tobacco and jobbers. Their sales are esand other sundries, has declined. timated to be down anywhere For example, it is estimated from 20 to 40 per cent in New that thousands of commuters York State. But their volume from New Jersey and Connecti- has risen enough in New Jercut working in New York now sey, Connecticut and Pennsylbuy daily cigars and sundries vania to erase their New York. in their home states that they losses. formerly purchased in York. A survey just completed by have increased their purchases recent years because of many the National Association of To- more than 50 per cent in recent factors. The industry is spendbacco Distributors of 221 retail stores in New York months. ing nearly four times more this showed that stores' cigar sales The sales of one cigar manu- year for advertising than it since July 1 were off 34.9 per facturer for northern New Jerdid five years ago. Its fivepacks have raised volume cent in the state and 36.3 per sey are up during the first ten greatly, and it is directing cent in New York City. months of this year by 22.1 per more of its advertising to the Harden E. Goldstein, associ- cent over the same period last image of masculinity" that ate director of the association, year. In contrast, his sales for smoking a cigar is said to give. said the survey also disclosed New York State rose only 1.8 that cigar sales for wholesalers percent during the same period. in New York State had declined The fact that the manufac38 per cent and 41 per cent in turer was able to show a slight New York City since the tax profit at all for New York re went into effect. sulted from the heavy sales State One large jobber in New York made during the first six City said last week, "Our cigar months of this year-before the and sundry volume has dropped tax went into effect. so much since the tax that we had to lay off a few of our salesmen." Reprinted from The New York Times, Sunday, November 29, 1959. |