Actually here's one of the main reasons it was shot down:
From the R.T.D.A. ( Retail Tobacco Dealers of America )
" As some of you may already know, the United States Senate is currently considering legislation that will excesively Tax all premium tobacco products. The proposed taxes in the current Senate Finance Committe proposal to fund expansion of the State Childrens Health Insuarnce Program (SCHIP) soley through higher tabacco taxes will have a draconian impact on the cigar industry. Indeed, it is the biggest threat to the industry since President Clinton's proposal in the early 1990s to fund universal health care on the back of the tabacco industry.
Under the current proposal, the large cigar tax rate would increase 156.4% ( from 20.719% to 53.13% of the manufacturer's selling price ) and the current tax cap would of around $0.05 per cigar would increase to an astounding 20,413% to $10 per cigar - essentially making the cap irrelevant. All large would effectively be taxed at 53.13% of the manufacturer's selling price. IN ALL OF THE INTERNAL REVENUE CODE, NO OTHER PRODUCT IS SUBJECT TO AN EXCISE TAX THAT APPROACHES THIS LEVEL. "
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Pretty much what the bill would have done is Sunk every small tobacco store in the country...and seeing is how no one would pay for premium Tobacco at that price, there would be no money for the Insurance plan.....and it would create a Black market for the Cigar/ premium Tobacco industry.
