Ridiculous US Vape Taxes Harm Smokers and Businesses
Excessive taxes on vaping are rolling out or proposed in Pennsylvania, Chicago and California.
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by Dave Cross
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Eric Boehm writes on the Reason website: “The estimated 350 vape shops scatter across Pennsylvania are getting hit hard by the new 40 percent wholesale tax on all vaping equipment and supplies. The real kicker is that the same 40 percent tax applies not only to purchases made after October 1, the day the tax took effect, but also covers all inventory on store shelves on that date. That means a store with $100,000 worth of inventory, about what a small vape shop would carry, owes the state $40,000 as of Saturday.”
It’s a preposterous state of affairs resulting from measures included as part of the 2016-17 state budget. Signed off by politicians of all hues, supporters of the bill claimed it would raise a healthy thirteen million dollars. Boehm highlights the problem as he quotes a vape retailer: “I am 100 percent confident that 40 percent of nothing is nothing.”
Boehm cautions: “The state shouldn't be banking on revenue from the vaping tax if the tax decimates the businesses expected to pay it.”
While the 40% sin tax is rightly seen as something that is attacking public health and honest businesses, the rate pales when compared to what is taking place in Chicago.
The City of Chicago breaks down the astronomical 160% tax on its website: “This is a tax on the retail sale of Liquid Nicotine Product in the City. The rate is $.80 per liquid nicotine product unit plus an additional $0.55 per fluid millilitre of consumable liquid, gel, or other solution contained in the product. Some taxable examples are “E-liquids, e-juice, and smoke juice containing nicotine.”
It means that a bottle of juice that once cost $11.50 now commands a price in excess of $30. It’s a model being chased by Californian legislators as state citizens are set to vote on a range of propositions. The situation is summed up in a Forbes headline: “California Ballot Choices: To Protect Porn Stars But Not Smokers?”
Legislators are looking to lump an extra $2 on a pack of cigarettes, but also an “equivalent increase on other tobacco products and electronic cigarettes containing nicotine”. The article points out that a cost saving produced by switching from cigarettes to vaping will be lessened as a result – something it terms of a “policy blunder” because the sin tax attacks “less harmful tobacco products, vaping liquid, and devices”.
How long until somebody suggests applying a tax to vaping products in the UK?
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 start-ups to develop content for their websites.
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