Vapers Brace For Unprecedented Tax Hikes After The Election
Initiatives that tax electronic cigarettes like traditional tobacco products are on the ballot in several states this election, and critics worry they will cripple the industry.
E-cigarettes face the prospect of a first-time tax in California that could hit consumers with a 67 percent penalty on the purchase of liquid nicotine. The proposal is part of Proposition 56, a Nov. 8 ballot measure in California that aims to hike the tax on tobacco products from 87 cents to $2.87 and bring e-cigarettes under the umbrella, reports The Modesto Bee.
Measure 4 in North Dakota would add a similar tax on liquid nicotine in the state, while hiking the tobacco tax from from 44 cents to $2.20. Other tobacco products would experience a roughly 50 percent tax increase on sales in the state. Activists in both states say a steep hike in tobacco taxes is needed to curb the smoking rate and that a tax on electronic cigarettes will help dissuade children from trying the device. (RELATED: Democrats Are Fighting Each Other Over Tobacco Tax Hike)
“For us to be taxed as an equivalent to tobacco or cigarettes doesn’t make sense,” Kari Hess, a vape shop owner and an activist for smoking alternatives, told the Los Angeles Times in October. “It would essentially put me out of business.”
Critics of the initiatives and many health experts argue taxes on e-cigarettes undermine their utility in helping smokers quit. Negative attention on vaping as dangerous and harmful like cigarettes is contributing to declining sales in recent years. Activists say they want to ensure a new generation of children do not become smokers by first using e-cigarettes, but many scientists argue this is damaging their overall value to public health, reports The New York Times.
“When they are regulated just like tobacco, people draw the conclusion that they are just as dangerous,” Daniel Wikler, a ethicist at the Harvard School of Public Health, told The New York Times. “You didn’t say it, but you didn’t have to. People make that assumption.”
Proponents of the tax hikes argue it’s necessary to dissuade people from smoking cigarettes, but the smoking rate in California is 12 percent, the second lowest rate in the country. Additionally, the 400 percent tobacco tax increase proposed in North Dakota would be the state’s largest single tax increase in history.
Many proponents of the tax maintain that vaping is a menace to public health and helping to extend the tobacco epidemic.
Even without taxes on e-cigarettes in the majority of states, the industry could suffer a devastating blow. The U.S. Food and Drug Administration (FDA) finalized a rule in May forcing all vape products to be regulated the same way as cigarettes, and many local vape vendors are anticipating closure within the next two years.
Vendors and manufactures have until Aug. 8 2018 to submit applications for their products to the FDA, which range in cost from $100,000 to $400,000 dollars each.
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