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California Governor Approves 12.5% Excise Tax on Vaping Products

California Governor Approves 12.5% Excise Tax on Vaping Products

California Governor Approves 12.5% Excise Tax on Vaping Products

“Taxing the products that cause illness at a lower rate than the solution is completely counterintuitive and counterproductive.”

Authored by Democratic State Senator Anna Caballero, the bill aims to discourage youth vaping. Moreover, it aims to generate $38.4 million in revenue by 2023, “with money to be split among several programs, including early childhood education, public health education and grants to students from disadvantaged communities pursuing an education in the health field.”

Of course public health and tobacco harm reduction experts will argue that being safer nicotine alternatives, taxes on vaping products should be much lower than the ones on cigarettes. Moreover, despite not being felt by customers, California already has a 60% wholesale tax for vape distributors in place.

“Most manufacturers that have had to collect or remit the wholesale tax decided not to push it onto the retailers and consumers and ‘ate it,” said Stefan Didak, a tobacco harm reduction (THR) advocate in California, as quoted by Filter. “Part of that was because it’s more economical for them to fiddle with it and only calculate the tax on the portion of nicotine itself going into a bottle, and the other was for competitive reasons.”

Other US states, regions and other nations understand that increasing vape taxes with the aim (or excuse) of tackling teen vaping, is in most cases just driving vapers back to smoking.

Increased vaping rates linked to decreased smoking rates

Moreover, the Canadian Vaping Association (CVA) has recently pointed out that increased vaping rates are directly correlating to decreased smoking rates all across the globe, and scientific data keep confirming this.

“Taxing the products that cause illness at a lower rate than the solution is completely counter intuitive and counterproductive. It is nonsensical that vapour products are being taxed at a higher rate than cigarettes after being proven 95% less harmful by the Royal College of Physicians, a result that has been replicated through annual studies in each of the past six years,” highlighted the CVA recently.

“There is a plethora of research available which shows conclusively that taxation on vaping products serves only to increase use of tobacco products, North America’s leading cause of death,” added the group whilst referring to such a study from Minnesota.

The Minnesota study found that increased taxes on vaping products not only led to increased tobacco use, but also to a decrease in smoking cessation rates. “The impact of E-cig taxes on smoking rates: Evidence from Minnesota,’ found that taxing vaping products lead to an 8.1% increase in tobacco use and a smoking cessation decrease of 1.4%. It also concluded that if vapour products had not been taxed, an additional 32,400 adults would have quit smoking.”

Top Economist recognizes the futility of such measures

The above has been reflected by multiple other studies and has in some cases even been predicted by top economists ahead of the implementation of strict measures. When in 2018, San Francisco voters approved a ban on flavoured tobacco products, leading to the implementation of the first flavour ban in the US, the city’s chief economist Ted Egan had pointed out that the ban would have no material effect on the city’s economy.

This is because, he explained, the money previously spent on vaping products would still be spent in the city- on other nicotine products, such as conventional cigarettes. Egan’s office is regularly asked to analyze the economic impact of legislations in San Francisco, reports of which are then sent to the Board of Supervisors and made public on the Controller’s Office website.

on: Vapingpost
by: Diane Caruana
November 4th, 2021

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