Fortunately, a House committee shot down this hefty tax but did, however, recommend a 29% tax hike instead
Last month a Utah Congressman, Rep. Paul Ray (R) proposed an astronomical 86.5% tax on vaping products as a means of combating teen use while simultaneously creating revenue. Luckily, a House committee immediately muted that tax, but instead of standing by e-cigarettes as a valuable smoking cessation tool, they instead chose to support a more practical, but still harsh, 29% tax on vaping products sold across the state. The 29% tax matches what’s currently imposed on tobacco products in the state. However, critics claim it’s counterproductive to treat vaping and smoking as essentially the same. Citing the already abysmal public perception numbers for the real benefits of vaping.
The major reason given by Rep. Ray for his proposed 86.5% tax was “we have an epidemic among our youth, and it’s called electronic cigarettes.” This is an all too common claim by politicians and health officials trying to pass legislation that hurts the vaping industry. Even though evidence has shown the overwhelming majority of teens who vape had already previously been smokers, these concerns still somehow outweigh the genuine benefits vaping offers adults who struggle with smoking every day. Unfortunately, this isn’t the first time a state has proposed or passed massive vaping taxes.
Taxes Across The Country
Back in late 2016, Pennsylvania passed a tax on all vaping products sold in the state. They did this as a means of generating much-needed revenue, as well as heeding similar calls over the safety of children. But as a result of the legislation, over 100 vape shops have closed, accounting for a full quarter of all shops in Pennsylvania. While this tax has generated over 13 million for the state so far, the value will only continue to drop precipitously as more vapers get their supplies online, leading to more stores closing their doors for good.
A similar, but more drastic tax has been proposed to help solve the immense budgetary problems in Connecticut. The embattled Governor, Dannel Malloy, who is already not seeking reelection this year, offered a 75% tax to help close the gap in their budget. While it’s currently still being discussed by legislators if passed the tax will undoubtedly lead to an even worse decline in the vaping industry than witnessed in Pennsylvania. In fact, many in the vaping community believe that such a tax would nearly eliminate the brick and mortar stores in the state altogether. Then consider that Rep. Ray of Utah’s tax was a full 11.5% higher than that. Clearly, such a drastic tariff will have serious consequences.
One of the most significant concerns that vapers have is which businesses would be affected most. Even with the revised 29% figure, the Utah tax would still likely lead to many independently owned vape shops having to close. Making this worse is the recent push by Big Tobacco companies into the vaping sector, as they begin to see the writing on the wall for smoking. Philip Morris International has even been openly discussing their plans to stop selling traditional cigarettes altogether eventually. With this blatant play for market share, states should be doing more to support the small businesses that helped rejuvenate the economy, not handing distinct advantages to the large corporations with mountains of cash to weather the storm.
That’s not even to mention the fact that these kind of taxes are inherently flawed, as they’re so high that they directly lead to a decrease in the number of taxable sales each successive year. This exact sentiment was expressed by Connecticut House Speaker in his challenge of their proposed tax, “If you make a product that is just not affordable locally or they can get it substantially cheaper on the internet, that’s what will happen… We can’t find ourselves in another situation where we banked on revenues coming into the state of Connecticut that evaporated and finding ourselves in another deficit six, eight months from now.’’
At the end of the day, the passing of taxes like these is a public health concern. Simply because of how much safer vaping is than smoking. By making it harder, or less desirable for smokers to make the switch, they’re in essence preventing people who might make the switch from having the opportunity. This is even more apparent when you consider that evidence shows vaping is also the most reliable smoking cessation aid we have at our disposal, even beating out prescription drugs like Chantix.
The results are clear. If you impose ridiculous taxes on vaping products, it leads to a significant decline in the number of independently owned shops, which not only lowers tax revenue but also hurts the number of people attempting the switch to a product proven to be at least 95% safer than smoking. We must stop taxing vaping as harshly, if not worse, than cigarettes if we value increased smoking cessation success.
Do you think taxes like these actively hurt the independent vaping industry? Why do you think it’s so easy for legislators to get vaping taxes passed? How can we help prevent the over taxing of vaping products? Let us know in the comments.