New Report on Tax and Vaping
The American Tax Foundation releases a comprehensive report on the taxing of vaping in the States.
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by Dave Cross
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Four states, a district and three jurisdictions had enacted tax law on vaping at the time of the report. It notes that a further 23 states were considering placing a duty on electronic cigarettes and liquids as, despite being much smaller than the tobacco market, there are rich pickings to be made – especially as ecigs stand to eclipse tobacco according to a number of predictions.
The study reports that even though Public Health England, among others, have stated electronic cigarettes are at least 95% safer than the traditional alternative, public health is often cited as one of the justifications for imposing a surcharge on sales. It goes into an excellent detail in its coverage of the key research supporting the case for ecigs as part of a harm reduction strategy. This includes a “study out of Italy,” an industry now all but destroyed by punitive tax, “followed 300 smokers who were not intending to quit over a 12-month period as they switched to using e-cigarettes. By the end of the study, 8.7 percent of the participants ended up quitting smoking entirely, and 10.3 percent had reduced how much they smoked.”
The table below demonstrates how taxation varies from acceptable to wildly draconian:
The second figure illustrates the creeping nature of taxation, and indicates its inevitability for European vapers:
The pressure on legislators, so they would claim, is to ensure the health and well-being of their constituents, but the indication is clear that it is nothing more than a quick money-grab. “Kansas and Louisiana,” the report articulates, “were prompted to impose vapour taxes to help close budget shortfalls; Kansas faced a deficit of nearly $600 million, while Louisiana stared down a $1.6 billion shortfall.”
It goes on to argue that taxes based on the value of the product (ad valorem) impact most on the lower-income vapers looking to escape from smoking. It claims that such measures act as a disincentive for smokers looking to make the switch. The report also states that the aim of taxation should be neutrality, not favouring any one business or decision over another. This means that all consumable products should receive the same rate of taxation rather than the punitive sin tax on certain items like electronic cigarettes.
“Electronic cigarettes, with their lower risk profile, are likely to have less external [medical treatment] costs associated with their use. Further, to the extent that smoking cessation is a stipulated goal of tobacco taxation, exposing vapour products, which many see as a promising cessation method, to such hefty tax rates as traditional tobacco would be counterproductive.”
The document is worth reading in its entirety for anybody with an interest in taking the debate to his or her local MP.
Photo Credit:
Tables from the Tax Foundation
Dave Cross
Journalist at POTVDave is a freelance writer; with articles on music, motorbikes, football, pop-science, vaping and tobacco harm reduction in Sounds, Melody Maker, UBG, AWoL, Bike, When Saturday Comes, Vape News Magazine, and syndicated across the Johnston Press group. He was published in an anthology of “Greatest Football Writing”, but still believes this was a mistake. Dave contributes sketches to comedy shows and used to co-host a radio sketch show. He’s worked with numerous vape companies to develop content for their websites.
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