Are Vaping Taxes About Revenue Rather Than Health?
A new tax bill in California has brought forth the debate of whether or not taxing vape products is about money over health.
The California Healthcare, Research and Prevention Tobacco Tax Act of 2016 is slated for the initiative ballot this November, but it’s already raising questions about vaping taxation. And some people, like Steven Greenhut from Reason, think that the taxation initiative is all about money.
It’s hard to see fault with this perspective. California has already seen a variety of changes to its tobacco and vaping laws, such as raising the legal smoking age to 21 as well as vigorous vaping regulations that coincide with already well-established tobacco regulations. Adding a tax increase on vaping products, which are already pretty expensive in relation to tobacco products, makes it seem like government agencies are more worried about tax revenue than the public’s health.
Consider this — the California Tobacco Tax Act of 2016 is an initiative that increases taxes on tobacco products like cigarettes. Because of current FDA regulations, vaping products — which are generally seen by the public as smoking cessation products — are also categorized as tobacco products. That means that one of the best ways to quit smoking is getting taxed at the same rate as traditional smoke products.
So why are vape products getting taxed at the same rate as tobacco products?
It comes down to nicotine, which is a naturally occurring substance within tobacco products. Most vape products, which are heated and then vaped instead of using combustion, use a distilled version of nicotine that is still derived from the plant, cutting out the over 150 toxic chemicals and carcinogens that make smoking traditional cigarettes a health risk. But because the nicotine still comes from tobacco, anti-vaping advocates have used it as a weapon to get it taxed right along with tobacco products.
Which begs the question — if vaping products are being taxed along with tobacco products, where is the money going?
The Legislative Analyst’s Office of California claims that the $1 billion of expected revenue from the taxation, should the initiative become law in November, will go to cover the loss of tobacco-related revenue. Of the $1 billion the state has estimated it will collect, only $30 million will go where it belongs — the Department of Public Health. The rest of the money will be divided among law enforcement, the University of California System and the Board of Equalization.
To add insult to injury for the public who are paying these taxes, it is estimated that only four percent of the current $1.52 billion in tobacco taxes and settlements actually goes to public health programs to get people to stop smoking.
This was brought to the attention of the legislative branch when Joshua Kane, the president of the California chapters of the Smoke Free Alternatives Trade Association, testified recently. He also said that “many believe this misguided measure is driven more [by] money than protecting California’s public health due to the fact that tobacco tax revenues are declining as adult consumption rates continue to fall.”
While there is no definitive understanding of how much vape products will be taxed through this act, there is reason to believe that anti-vaping advocates are using the measure to create a new source of revenue. The problem lies in the fact that the money gained from the taxation doesn’t all go to public health, where it rightly should be placed.