U.S. Citizens AGAINST the PACT ACT of 2009 S.1147

On November 19, 2009 the Senate Judiciary Committee approved the PACT ACT of 2009 S. 1147 with unanimous support by the committee. The PACT ACT has already been passed by the House in May of 2009. The next step for this bill is to go to the Full Senate and then onto the President. The PACT ACT of 2009 S. 1147 will Stop all Mail Order Tobacco Businesses. If this bill is passed it will prohibit American citizens from having the freedom of choice in regards to personal purchases, shut down U.S. based online tobacco stores and Native American online tobacco stores and shut down the United States Postal Service from delivering tobacco products with the exception of cigars.

We the U.S. Citizens against PACT ACT 2009 S. 1147 ask our Senators to VOTE NO on this bill, and for President Barack Obama to VETO this bill if this bill is passed based on the following reasons and explanations.

1) This bill will prohibit American citizens from having the freedom of choice in regards to personal purchases of whom they wish to purchase tobacco products from. A huge amount of handicap individuals will no longer be able to purchase tobacco products without mail order. Americans choose to purchase and/or use tobacco products, Americans should have the freedom of choice to choose who they purchase tobacco products from, what brand(s) and kind(s) of tobacco products they purchase, and where they purchase these products from.

2) We find that passing this bill is not the solution to this issue at all. Passage of the PACT Act of 2009, S. 1147, will further hurt an already damaged economy by putting thousands of jobs at risk within the United States of America. Native American Tribes and the legitimate U.S. Companies who retail, and sell cigarettes and other tobacco products at lower prices for the same products a consumer can buy locally at sometimes twice the price are not the criminals here. These companies are simply offering a better price for customers to save money in this highly volatile economy. Passage of the PACT Act of 2009, S. 1147, will not only impact the thousands of jobs within the Native American Tribes and US Companies, but it will also impact thousands of jobs within the US Postal Service. Passage of the PACT Act of 2009, S. 1147, will cause a huge loss of income for the United States Postal Service. The United State postal service operating loss this year 2009 is between $6 billion and $12 billion, debt surpassing $10 billion, and a $1 billion cash shortfall and therefore has come to congress for approval on even more cut backs. This does not account for the hundreds of postal workers that will lose their jobs. Please do not endorse or pass the PACT Act of 2009, S.1147; which will further stress the current USPS financial difficulties.

3) The real numbers: The average Online Tobacco website spends upwards of $150,000.00 per year in shipping charges to the U.S. Postal Service to deliver these products. Is the Federal Government and U.S. Postal Service ready to lose $150,000.00 in revenue for each website that is forced to shut down if this bill passes?  The average amount paid by each U.S. Online Tobacco Compnay is $485,000.00 per year in Federal Cigarette Excise Tax, and $175,000.00 per year in State Cigarette Excise Tax to the State they purchase their supply from. Is the government ready to lose this Tax Revenue? The hardest hit in these categories will be the U.S. Postal Service, which is already in a lot of financial trouble.

4) We feel the reason Politicians have given to support this bill is FALSE. The bill states that this will help reduce or minimize underage sales of tobacco to minors as a key point to support the bill. This is just an excuse to get support for this bill, by throwing our children at it. In regards to age verification we believe that most, if not all U.S. Tobacco sites and Native American tobacco sites require a valid picture ID to be sent by email, fax, or regular mail before products are shipped as well as requiring a signature upon delivery. This is often more age verification than you will see in your local stores. Minors are not trying to buy cartons of cigarettes online. Minors typically do not have $100-$250 to spend on a cigarette order of 3-6 cartons of cigarettes and wait for them to arrive at their parent's house and hope they do not get caught receiving them in the mail. Minors that are looking to obtain cigarettes will do this locally by finding a friend or stranger who is 18 or older to buy a pack for them. They will also try to buy them themselves at stores that may not check for ID. Teenagers and minors typically do not have access to a lot of money to stock up on cigarettes, they buy them 1 pack at a time where ever they can figure our how to do so locally.  It is your common hard working US Citizens that are making Tobacco purchases online to try to save money from the unjust and unequal State Cigarette Excise Tax increases year after year. These people are not criminals, they are your average hard working U.S. Citizens trying to save a buck here or there when then can, and they are certainly not minors. Please stop trying to hide behind our children to support your bill. We will teach our children about the dangers of smoking and making the right choices in their lives.

5) The reason that this bill is being brought forth is because of State Excise Taxes that are put on cigarettes are extremely high and the States' feel they are losing revenue, yet it is the State itself that raised the tax and cause people to search online  for a better price. U.S. Citizens have the right to shop for the best price for a product they choose to purchase.

Examples of why people are shopping online for cigarettes and tobacco are solely because of high cigarette excise taxes imposed in different states.

Several states are continuing to raise excise taxes on cigarettes and other tobacco products in order to increase revenue.  The rates shown do not include the federal cigarette tax of $1.01 a pack. New York City is the most expensive place to buy cigarettes ($4.25). The top 12 states with the highest state tax on cigarettes are: Rhode Island ($3.46), New York ($2.75), New Jersey ($2.70), Hawaii ($2.60), Wisconsin ($2.52), Massachusetts ($2.51), Vermont ($2.24), Washington ($2.025, tied for ninth place are: Alaska ($2.00), Arizona ($2.00), Connecticut ($2.00), District of Columbia ($2.00) Maine ($2.00), Maryland ($2.00), and Michigan ($2.00). Counties and cities may impose an additional tax ranging from 1 cent to $2.00 on a pack of cigarettes. About 82% of what consumers pay for a pack of cigarettes (average cost $5.11 - including statewide sales taxes but not local cigarette or sales taxes) ends up going to the government in taxes and other payments rather than for the cigarettes.

6) We believe it is unlawful and criminal for the State Politicians to charge such high taxes to only a "certain" population of a City, State or Country. Why is it that politicians feel it is ok to be prejudice in issuing taxes only to a certain group of people? Only 20% of Americans smoke. Where is the responsibility of the 80 % of the people who do not smoke to contribute to the State budget as well? Why does that group of 80% get a FREE Ride not to contribute as much to the State budget? Why are the politicians picking on a minority group here? If they passed a Tax Law that said that only African Americans had to pay $25.00 extra a week in taxes just because they were black, would that be ok? No there would be a huge uproar if that was done, and we do not think it would be ok either, but yet it is done to smoker's each an every year with another tax increase. So why is it ok to make US Citizens who have the freedom to smoke if they choose to pay an extra $25.00 - $70.00 a week extra in taxes to support State budgets just because they smoke? That is unjust, unfair and most of all prejudice and we believe should be illegal.

Examples of the price differences in various States:

The average price of 1 carton of Marlboro-Full Flavor King Box by State:

South Carolina = $36.99, Georgia = $37.99, North Carolina = $39.79, California = $44.99, Florida = $48.49, Texas = $51.69, Massachusetts = $68.79, Connecticut = $73.69, RI = $75.49, New York State = $75.99, New York City = $94.99. The prices above exclude the sales tax at the register, which is typically 5%-8% additional depending on the State sales tax for each state.

The same exact product that we can buy in SC for $37 is $95 in NYC or $70 or more in MA, CT, and RI & NY State. This is double the price or more for the same product and it is all stemmed from State imposed Excise Tax.

The price difference above is the reason people shop online for cigarettes and tobacco products. People are not trying to necessarily avoid excise tax; they are simply looking for the best price available for the same product. The reason they shop for a better price is the same as if you were shopping for a TV. If you saw the same TV at Best Buy for $3000, and it was at Sears for $2500, and at Wal-Mart for $1800 where would you buy it? The internet just allows consumers the choice of not having to drive to these other states to make these purchases, just like all online shopping websites do for other products sold over the internet.

7) Why does this bill exclude alcohol, wine, narcotic prescription drugs, and marijuana, which also can be bought online and shipped to your house? The leading cause of death among minors these days is due to over dose of Prescription Drugs and Alcohol use, not tobacco use.

8) Most if not all U.S. Companies pay the Federal and State Excise tax for the cigarettes they sell to the state they are located in right to the wholesale supply company they purchase products from. The only issue here with Federal and State excise taxes not being paid is from International vendors selling into the United States. Why not just ban the imports of any and all tobacco and or drugs and alcohol coming from other countries into the U.S., which can be done at U.S. Customs check points.

The better solution to resolve the issue of so called Illegal Cigarette/Tobacco Sales is really just an Excise Tax issue. Two things need to be done to fix this:

a) Repeal ALL current CITY and STATE Cigarette Excise Taxes. Replace the current City and State Cigarette Excise Tax with a "Cap Based Cigarette Excise Tax Program" not to exceed .65 cents per pack nationwide for every State Agency with a built in Maximum allowable increase of 10% every 4 years there after. This would give the states the revenue they need based on sheer volume instead of the current over priced taxes in most states. This Cap Based Cigarette Excise Tax Program would be geared towards a continual funding of the individual States. The cap based tax program would be in addition to the Federal Cigarette Excise tax that is also paid on cigarettes, that was also just increased from .39 cents per pack to $1.01 per pack to help fund the S-CHIP bill passed in February or 2009 and signed by President Barack Obama as one of the first bill's he put into law.

b) Ban the imports of any and all tobacco and or drugs and alcohol coming from other countries into the U.S., which can be done at U.S. Customs check points.

This solution is a viable way that will allow U.S. Citizens the choice to buy locally and support their State Revenue Departments using the equal tax program or continue to buy online from U.S. companies. This will make the average cost to the consumer nationwide for a carton of cigarettes at approximately $45.00 per carton. This price is an acceptable price for most people, so that consumers most likely would not have to shop for better prices online and support more local businesses and State revenues as well as online retailers if they choose. This would allow the U.S. Online retailers to stay in business and the ability to offer brands not found locally, such as Native American brands and off brands that some stores do not stock and keep these legal business in business and the U.S. Postal Service with the ability to continue to take in revenue from these online retailers, thus increasing State Revenues from Cigarette Sales and keeping businesses and jobs intact nationwide!

We the U.S. Citizens against PACT ACT 2009 S. 1147 would like to thank you for your time and we ask you to VOTE AGAINST the PACT Act of 2009, S. 1147 it will be immensely appreciated.

In addition, we ask that you please encourage your fellow members of the Senate to vote AGAINST passing The PACT Act of 2009, S. 1147 as well.

If the House and Senate were to pass this bill and send it to the President, we would kindly ask President Barack Obama to take our thoughts, our ideas, our rights and our signatures on this petition into consideration and we ask you Mr. President Barack Obama to please VETO this bill, if this bill were to come to your desk for a signature.

Voting AGAINST this bill will be remembered by the undersigned U.S. Citizens AGAINST the PACT ACT 2009 S.1147 when it is election time in November 2010.

Sincerely,