Last week, the Georgia Senate voted to impose a 7% tax on vaping products and raise the age limit to purchase both tobacco and vaping products from 18 to 21.
“Vaping was created to keep people off of tobacco, but it has become its own industry,” said Chickamauga Republican Sen. Jeff Mullis. “Good or bad, right or wrong, it has, and for those who smoke a lot, this has curbed that. For those kids starting up, we want to curb that even more.”
When the Legislature resumed the 2020 session following the pandemic lock down, some GOP senators called for a cigarette tax hike to help fill a projected $2.2 billion revenue shortfall.
A 2018 report released by the state Department of Public Health, had pointed out that one in four Georgia high school students reported having tried vape devices at least once. This had prompted a vape bill by Republican Rep. Bonnie Rich of Suwanee, but this fell apart in March as lawmakers disapproved of the fact that it contained a lower tax rate for “modified risk tobacco products” such as Snus.
To this effect, a tax increase was added onto Mullis’ bill, which originally only included a tobacco/vaping age limit increase. When the Legislature resumed the 2020 session following the pandemic lockdown, some GOP senators called for a cigarette tax hike to help fill a projected $2.2 billion revenue shortfall.
“Right, wrong or indifferent, that will not be a part of this bill,” said House Ways and Means Committee Chairman Brett Harrell. In parallel with Harrell’s position, Mullis said that a higher cigarette tax wouldn’t happen this year, but may happen in 2021. “I’d say that’s coming, probably next session, but no, no additional tobacco tax, no additional taxes on anything except excise funds for vaping products,” he said.
Are tobacco taxes really effective?
Meanwhile, in line with findings from previous studies, research funded by the National Institutes of Health (NIH) (coincidentally co-authored by a researcher from Georgia) has indicated that raising taxes on e-cigarettes in an attempt to curb vaping may be counterproductive, as it just leads people to sticking or reverting back to traditional (and more harmful) cigarettes.
Titled, “The Effects of E-Cigarette Taxes on E-Cigarette Prices and Tobacco Product Sales: Evidence from Retail Panel Data,” the study aimed to examine the effect of e-cigarette taxes enacted in eight US states. Using data from 35,000 national retailers between 2011 and 2017, the researchers found that for every 10% increase in e-cigarette prices, e-cigarette sales dropped by 26%. However, the same 10% increase in e-cigarette prices caused an 11% increase in traditional cigarette sales.
“We estimate that for every e-cigarette pod no longer purchased as a result of an e-cigarette tax, 6.2 extra packs of cigarettes are purchased instead,” said concerned study co-author and economist from Georgia State University Michael Pesko.
Article Originally Featured:
on: Vapingpost
by: Diane Caruana
July 23rd, 2020