Published on April 4th, 2016 | by Jimmy Hafrey
Vape product taxation is on the rise in the United States, and the poor are paying for it.
As WPTZ reported earlier this week, the Vermont House of Representatives voted to impose a tax on vaping products. The 92 percent state tax on vaping kits and e-juices would see the price of vape juices rise from $20 to $40 per 30ml bottle, effectively making vaping a luxury hobby instead of a better alternative to smoking.
While the tax has not passed Vermont’s Senate, it is thought that legislators will vote in favor of the proposal, citing try to discourage young vapers as the primary reason. A new youth risk survey showed that one-third of Vermont high school students that were polled used vaping products with 15 percent of those students identifying as regular vape users. And the survey also concluded that vaping is more popular among young students than cigarettes.
But who does the new taxation laws, which are being considered in Vermont and Maryland, actually help? Vape shops and companies are generally built and operated as small businesses, providing jobs to local residents. With the extreme jump in taxation, vape shops could close, adding to the unemployment issues that many of these same states are currently wrestling with.
As The Baltimore Sun has reported, there is another drawback to the taxation proposals — if people cannot afford to vape, they will simply return to smoking traditional cigarettes. And since most vapers are former smokers with lower to middle-class backgrounds, the shift in price could drive them back to cigarettes, which would as a result of the taxation become the cheaper alternative.
So taxing vaping products have economic consequences that affect people from the lower classes and small businesses as well as contributing to the unemployment rate. That’s bad enough, but is that all the taxation affects?
Unfortunately, the consequences of taxing vape products get worse, and it directly affects you, the vaping public. When items, like vape products, are taxed at the state level, the money that is collected from the sale of those products goes to funding state services, like education and medical care. While state taxes to help bolster state services is great in theory, it is only great in practice when it works.
CPSnet reported this week that the 30 percent wholesale tax on vaping products that Maryland put into place was unsuccessful. Montgomery County in the state of Maryland imposed the tax last May, predicting a tax revenue windfall as a result of the tax in the range of $1.5 to $2.5 million. This revenue was to go to the county’s educational system.
However, the tax fell short — by 80 percent. Reports show that since the end of February of this year, the tax has collected $175,000. The difference, you can be sure, will be paid for by the state’s residents, many of whom are living paycheck to paycheck and can’t afford to have their taxes raised.
Many experts in the vaping community, including American Vaping Association President George Conley, point to the lack of information and ignorance on the part of state legislators. In a statement released for publication, Conley said that the Montgomery County Commission failed to properly study the vaping market in their area, leading to a gross overestimation of the tax that could be collected on vaping products.
So what does this mean for you? It means that as vape products become more expensive, both through stringent regulations and taxation, vape shops could close and vapers could be left with no alternative to smoking. It means that overestimations in the tax revenue, as in Montgomery County, could potentially put residents at risk for higher taxes overall to make up for the discrepancy in state revenue.
But most of all, it means that people from lower-class backgrounds will not be able to successfully quit smoking, which is the primary reason people turn to vaping. It is the elimination of an alternative to the dangers effects of smoking, leaving cigarettes free and clear to make a comeback.