On September 12, influential House Democrats circulate a new tax proposal around Washington aimed to target the wealthiest individuals and businesses in the country. Much of the focus on the project, naturally, focused on potential tax increases for Americans earning more than $ 435,000 (from 37 to 39.6%) as well as large companies (from 21 to 26.5%). These tax hikes, which are expected to bring in up to $ 2.9 trillion over 10 years, would help President Joe Biden continue his stated agenda to strengthen the social safety net.
This could lead to the country’s richest citizens and most profitable businesses are finally paying their fair share, so the government can, for example, tackle the climate crisis and expand public education. But there is at least one section in the project that does not fit into this context: a tax increase on all nicotine products.
Smokers, who are widely socially stigmatized, generally do not belong to the upper classes. According to Centers for Disease Control and Prevention (CDC), current smoking in the United States “is higher among people with lower annual household income than among those with higher annual household income” and “highest among people with a certificate of development of general education (GED) and lowest among those with a higher education degree ”. They are also more likely to be Indigenous, divorced or widowed, LGBTQ, or without health insurance.
If these general tax increases became a reality, relative prices would mean that the US government would effectively let an eclectic group of marginalized Americans die without the practical possibility of switching to a much safer alternative like vaping. (Biden has repeatedly pledged not to raise taxes for families earning less than $ 400,000 a year.)
More specifically, the proposed tax per 1,000 cigarettes would increase to $ 100.66 and vaping products would be taxed at the same rate, with 1,000 cigarettes equivalent to 1,810 milligrams of nicotine. For example, at the bottom of the scale, a 30 milliliter bottle of e-liquid containing 3 milligrams of nicotine per milliliter (3 mg / mL) would result in a tax rate of $ 5 for the bottle; on the top end, a 120 milliliter bottle of e-liquid that contains 6 milligrams of nicotine per milliliter (6 mg / mL) would mean a tax rate of $ 40 for the bottle.
“A better strategy from a public health point of view would be… to financially encourage smokers to use safer electronic cigarettes.
By comparison, critics and tax reformers have estimated that a four pack of Juul pods would be taxed around $ 9-give a giant a clear advantage over the smaller player. Far more alarming, a pack of cigarettes would only be taxed about $ 2. In addition, this federal vapor tax would be in addition to any other vapor taxes that a particular state might have. These, too, often make nicotine users buy much riskier products. (There are also estimates that smokeless tobacco products, which are also considered to be much safer than cigarettes, could be taxed up to 1600 percent Following.)
“It doesn’t make sense to raise taxes on the safer product further,” said Michael Pesko, health economist and associate professor of economics at Georgia State University. Filtered. “A better strategy from a public health point of view would be to increase taxes on cigarettes more and less taxes on electronic cigarettes, in order to provide financial incentives for smokers to use safer electronic cigarettes.
Overall, the news has been another blow to a vaping industry that began to implode last week, as the Food and Drug Administration (FDA) continues to review tobacco pre-market applications (PMTAs). that manufacturers had to file last September to keep their products legal – have snatched flavored e-liquids from the market.
Most, if not all, of the denied applications appear to come from small and medium-sized manufacturers without the financial resources to carry out solid scientific and behavioral studies. Many producers who have received refusal to market (MDO) orders have criticized the FDA for its lack of transparency in the process.
Burning has been slow: The agency exceeded the court-imposed deadline without making rulings on big business products, but said it had “taken action” on 93% of submissions in recent months .
The FDA still has not issued all authorizations, which would designate a vaping product as “appropriate for the protection of public health” – a loose term that has recently been understood as particular vaping being more likely to help an adult smoker get rid of combustible cigarettes than it does. introduce a teenager to nicotine addiction.
Tobacco control experts, producers and consumers have long assumed that government regulations and cumbersome and costly regulatory bureaucracy would end up favoring large corporations, many of which are owned or have financial ties to Big Tobacco. For many in the industry, it’s hard to imagine coming out of a hole that seems to get deeper every day.
“The proposed new nicotine tax will complete the work that the FDA started when it denied more than 90% of all submitted vapor products,” said Amanda Wheeler, president of the American Vapor Manufacturers Association. Filtered. “Events within the federal government over the past week signal an all-out war on steam-based products and make it a virtual certainty that nearly 480,000 Americans will continue to needlessly die each year from smoking. “
On the contrary, the proposed tax increase is a general sign that the vaping industry still has a battle ahead of it, even as the PMTA process draws to a close. (When it does.) In recent years, members of Congress like Senator Dick Durbin and Representative Raja Krishnamoorthi, both Democrats, have introduced legislation – again and again – to tax cigarettes and e-cigarettes. in the same way. It’s a counterintuitive decision, economists have repeatedly emphasized, because combustible cigarettes and e-cigarettes are substitutes. Prohibitionist groups like the Campaign for Tobacco Free Children have, as one might expect, welcomed the tax proposal.
“The events that have unfolded within the federal government over the past week signal an all-out war on steam-based products. “
In short, tobacco harm reduction advocates argue that vaping products should, at the very least, be taxed much less than cigarettes in order to push current smokers towards safer alternatives. That is, there is a wide range of nicotine products – from nicotine sachets to vapers to menthol cigarettes – and they should be taxed on a large scale, “differential taxes for differential risks.” In other words, the safer a nicotine product is, the less it should be taxed.
“If the goal is to levy more taxes on low-income Americans who are already many times disadvantaged, while maintaining higher-than-necessary mortality and morbidity, this proposal gets the job done,” David Sweanor, assistant professor of law at the University of Ottawa who has been instrumental in enacting tobacco tax policies globally, said Filtered. “If, however, the goal is to empower and encourage people to make healthier personal decisions, they could learn a lot from the experience of making sure unleaded gasoline was cheaper than the poisonous variety. lead.“
Nicotine specific tax legislation, if it gets to Biden’s office, expected to raise $ 96 billion over the next decade. But some of that money would come from making dangerous fuels that are much more affordable than much safer vaping products. And all because many lawmakers seem to mistakenly perceive cigarettes and e-cigarettes as equally dangerous.
“Between the FDA’s arbitrary rulings on flavored vaping products and the imposition of a massive federal tax on all nicotine-containing products, the Biden administration could deal a death blow to tobacco harm reduction in the world. United States, “Greg Conley, President of the American Vaping Association, said Filtered.
Photograph by Lindsay Fox via Flickr / Creative Commons 2.0
The Influence Foundation, which operates Filtered, has received unrestricted grants and donations from Juul and the American Vaping Association.