This proposed tax seems sure to lead to an increase in lung disease in the future.
Nov. 12 (Bloomberg) – In a scramble for revenue to fund President Joe Biden’s ‘Build Back Better’ plan, House Budget Chairman John Yarmuth (D-KY) has added a nicotine tax to an ever-changing proposal, according to a news release. The proposed tax would not raise the price of traditional cigarettes already taxed at the federal level. Still, it would impose a massive new tax on vaping and other smoking alternatives.
For example, under the proposal, a 6mg (nicotine)/30ml bottle of e-liquid would be taxed at a rate of $5.01. And it taxes a typical pack of e-liquid cartridges at a rate of $4.59. The federal tax on cigarettes is $1.01 per pack. Thus, The vape pen would be taxed more than regular cigarettes, especially in states that already impose high vape taxes.
Michael Pesko of Georgia State University, one of the leading US economists analyzing the impact of vape taxes, estimates that the new tax on nicotine substitutes will result in an additional 2.7 million adult smokers, an additional 530,000 youth smokers, and 29,000 prenatal smokers per day.
Because vape pens are an alternative to combustible cigarettes, not a supplement, and millions of American ex-smokers have already used these products to quit traditional cigarettes.
“I think it makes sense to raise taxes on the most deadly form of tobacco,” Unfortunately, this bill doesn’t do that,” Pesko said. Instead, it raises taxes on a safer form of tobacco, so by pushing people to use the more harmful combustible tobacco, the net effect of the tax on public health could be damaging.”
The Cochrane Review, the gold standard in evidence-based medicine, recently concluded that e-cigarettes might be more effective than traditional nicotine replacement therapies in helping smokers to quit. What they found: We have some confidence that nicotine e-cigarettes help more people quit smoking than nicotine replacement therapy or nicotine-free e-cigarettes.
From a public health perspective, rather than encouraging traditional smokers to switch to nicotine replacement that could improve their health, this proposed tax, if implemented, seems sure to lead to an increase in the incidence of lung disease in the future.
In addition to its devastating impact on public health, the tax would violate President Biden’s campaign promise not to raise taxes on those earning less than $400,000 per year. According to a recent Gallup poll, Americans with annual household incomes below $40,000 are more likely to smoke e-cigarettes than those in higher-income groups. Americans without a college degree are twice as likely to smoke e-cigarettes as college graduates.
These groups will pay for this tax increase.
With more than 15 million adult e-cigarette users in the United States today, many of whom attribute their ability to quit or reduce their smoking of traditional cigarettes to their use of e-cigarettes. It is puzzling that House Democrats would consider targeting a significant tax increase that could drive many of them back to smoking and worsen public health.
The proposed tax increase is not worth the 2.75 million more Americans who smoke and would not generate the large sums of money needed to pay for the $2 trillion proposals. As Ulrik Boesen of the Tax Foundation points out, a similar tax proposal in 2019 is estimated to raise less than $10 billion over ten years.
“The nicotine tax proposal in the Rebuild Better Act ignores sensible consumption tax policy design and in doing so risks jeopardizing public health. Lawmakers should reconsider this approach to nicotine taxation,” concluded Bosson. Boson concluded.
It is difficult to understand why the proposed nicotine tax was included in the spending plan when it would negatively impact public health, hurt low- and middle-income Americans, and go against a key campaign promise.
Senator Joe Manchin’s (D, West Virginia) opposition to the tax may be enough to ensure that it never becomes law. I agreed with Senator Manchin when he said earlier this week, “A tax on nicotine? That makes no sense to me.”