Vaping advocates have reason to be happy this week as it has been revealed that Senate Democrats are removing a proposal that would significantly increase the cost of vaping by applying additional tax. Before this amendment, the Bill proposed to add a tax of $50.33 per 1810 milligrams of nicotine. Fortunately, this is now no longer the case.
The vape tax was supported by various anti-vaping interest groups, even though it would have made cigarettes the cheaper choice. The previous amendment to the Bill, implementing the tax, has also been widely criticized for being discriminatory. It would primarily impact poorer members of the population.
What The BBB Bill Could Have Meant for Vapers
According to the Consumer Advocates for Smoke-Free Alternatives Association (CASAA), a 120ml bottle of e-juice with 6mg of nicotine would have jumped in price from $25.99 to $46.
The Biden administration created the “Build Back Better” Bill, enacting sweeping reforms in many sectors and taxing certain areas and industries to fund the building back of “better” in others. The tax on nicotine alone was expected to raise $9 Billion.
The above proposal was eventually shelved following a push by Senator Catherina Cortez Masta. According to a report from the Wall Street Journal, to still pass, the bill’s provisions would need unanimous support from the Democrats.
Sen. Cortez Masto’s opposition came from the tax promising to harm those with incomes below $400,000.
Others were also strongly opposed to the original measures. Gregory Conley, President of the American Vaping Association, previously issued the following statement before the Tax was removed from the Bill:
“There is no valid reason to impose new taxes on tobacco-free nicotine products, particularly at a time when American families are feeling the impact of rising inflation. By aiming to make smoke-free alternatives more expensive than smoking, House Democrats are sending a message to millions of Americans that their health matters less than protecting the wallets of billionaires.”
The move was further celebrated on Twitter:
The Wall Street Journal is reporting that Democrats have dropped a proposed vaping tax from the #BuildBackBetterAct.
This couldn’t have happened without the tens of thousands of vapers who stood up and refused to be taxed more for daring to quit smoking.https://t.co/nRdM2ymVmA
— American Vaping Assn (@AVABoard) December 9, 2021
Why the Rejection of ‘Vape Tax’ is Good News for Vapers
Aside from ensuring that vaping is significantly cheaper, the initial inclusion of the tax was misguided and problematic for several reasons.
Its removal means that vapers can breathe a sigh of relief, at least for the time being. Here’s why the plan was flawed from the start.
Cigarette Tax Would Not Have Been Increased by an Equal Amount
When held side by side, vaping is significantly healthier than smoking. Yet when one discovers that the tax on cigarettes was removed from the Bill, confusion is the natural response.
Essentially the now removed section of the BBB Bill would have made vaping more expensive in real terms than smoking.
As anyone who has battled with cigarette addiction and tried to quit without devices such as vapes will tell you, it is no easy task, and it is all too easy to go back to conventional cigarettes.
This effect is even more pronounced when smoking is cheaper. Particularly for people who simply wouldn’t be able to afford to vape.
According to a study found on the US National Institute of Health, a price increase of 10% on a pack of cigarettes causes around a 4% drop in smoking rates. Considering that each year around 480,000 people die of smoking-related illnesses in the US alone, ignoring cigarette tax while penalizing a more healthy alternative made little sense.
Interestingly, in the same study, it was found that of 22 observations surrounding taxing cigarettes, 9 found that increased taxation had no effect on the initiation of youth smoking, and 6 were inconclusive. Why could one reasonably believe that it would work for vaping if it doesn’t work for cigarettes?
Taxing Vaping. An Increase in Health or an Increase in Revenue?
While not heavily publicized, this is where the entire argument for taxing vaping topples most readily.
To generate revenue from a tax on a product, people actually have to still use that product. The aims of the proposed tax were heavily at odds. Increased health on one side, increased wealth (for the government) on the other.
They are, in fact, mutually exclusive.
Paid for interest groups, such as the Bloomberg funded Campaign for Tobacco-Free Kids, make statements such as: –
“Increasing federal tobacco taxes will greatly improve public health.”
Swiftly followed by (with no hint of irony),
“At the same time, it will raise revenue”.
If the aim is to make people not purchase these products at all, how can it raise revenue? If a tax on vaping products is making money, it isn’t stopping people.
The Tax Would Have Hit Those with Lower Incomes the Hardest
According to figures provided by the Center for Disease Control and Prevention, by far the highest percentage of smokers were those who earned below $35,000 per year.
The vape tax represented a ‘sin tax’ on the poor. When people are left with no financially viable choice but to smoke, the cost would have been to their wallet and their health.
It’s been proven in several studies and covered in several articles that when vaping goes down, smoking goes up. This trend is in the wrong direction, especially where ‘public health’ is concerned.
The Bottom Line
The removal of the Vape Tax from the Build Back Better Bill is a step in the right direction for vaping. By attempting to tax a healthier alternative to smoking while also completely neglecting to impose a similar levy on cigarettes, the government has shown that it still doesn’t understand the benefits that this life-saving technology can offer.
While the vape tax has been removed, nothing is guarding against its inclusion in the future. It is up to the vaping community and industry to educate lawmakers about the benefits of vaping.