ATR Hosts Small Businesses From Around Country to Discuss the Politics of Vaping
Last week, Americans for Tax Reform hosted small businesses from around the country for a happy hour to discuss “the politics of vaping.” Over 100 members of the Smoke-Free Alternatives Trade Association (SFATA) were in Washington, D.C. meeting with members of Congress in an effort to convince them to curb the implementation of the Food and Drug Administration’s regulatory assault and pending “deeming rule” on the sale and availability of electronic cigarettes and vapor products.
ATR President Grover Norquist with SFATA President Cynthia Cabrera
These tobacco-free technology products have faced an onslaught of tax and regulatory threats throughout the country. This, despite the fact that a recent government-funded study found that e-cigarettes are at least 95 percent less harmful than combustible tobacco cigarettes.
Beyond the policy issues the industry and its consumers face, ATR president Grover Norquist discussed the political implications of threatening the 9 million plus adult vapor product consumers in the context of the 2016 elections.
"I think that the next election, at the presidential level, and a lot of other levels, is going to be determined by the vaping community," said Grover. "Lifestyle issues win because of the power of the political support behind them," he said.
The Washington Examiner's Paul Bedard wrote about the event here. Quoting Grover, Bedard wrote:
"Vaping is not a product. It is a movement. It is a community, it is a political movement in support of a community and it's changing the country in very good ways," [Grover] said at a reception during a two-day lobbying effort on Capitol Hill by the association last week.
At the federal level, Congressional Democrats have stood in the way of a minor rule change that would allow the thousands of U.S. small businesses helping combustible cigarette smokers quit to continue doing so. Without action, the pre-market review and regulatory process required of these businesses would be unaffordable and some estimate it would equate to prohibition for 99 percent of the market. It should be noted that the pending regulation does not necessarily regulate the market; it simply requires businesses obtain permission from the FDA to continue to sell products to consumers.
More from Americans for Tax Reform
Efforts to Raise Taxes on Electronic Cigarettes Persist in 2016
One year ago this week, ATR's Patrick Gleason and I outlined the threat electronic cigarettes and vapor products faced during the 2015 state legislative sessions over new and higher taxes. At the conclusion of last year, state governments considered legislation to subject these new technology and tobacco-free products to excise or "sin" taxes in half the country and the District of Columbia. This was up from 15 the year prior, in 2014.
As we explained, "Where some see a new technology that is helping people quit smoking, cash-hungry politicians see a new target to tax."
Contrary to claims by some, the fight to tax, and in many cases, regulate this new product category has never been about public health. In a piece for National Review, ATR president Grover Norquist and I outlined the fraud of such justifications for the prohibitionist movement against vapor products.
"The same people who spent years demonizing smokers and cigarettes turned around and gleefully pushed for new programs and spending projects with the revenue they were able to extract from consumers... Budgets, though, rely on this significant revenue stream. Here the fraud that has always been the public-health push for cigarette taxes is exposed, in their quest to tax e-cigarettes out of existence."
These legislative threats have always been about protecting the government's stream of sin tax revenue extracted from smokers. Every price increase on vapor products provides a reason for a smoker to not make the switch to healthier alternatives. This is exactly what some money-hungry legislators want.
So what about 2016? As state legislative sessions heat up, so too have efforts to raise taxes on electronic cigarettes. Below is a map showing which states currently subject the products to excise, or sin, taxes and states where legislation has been filed or defeated as well. Click here for a larger version of the map.
Legislation to raise taxes on electronic cigarettes has already been filed in Alaska, Hawaii, Iowa, Kentucky, New Jersey, New Mexico, New York, Virginia, Washington, and West Virginia. A ballot initiative is pending in California. More legislation is likely to be filed in the coming days and weeks.
Four states and the District of Columbia currently impose an excise tax on e-cigarettes and vapor products. They include Minnesota (95% wholesale), North Carolina (5 cents per mL), Louisiana (5 cents per mL), and Kansas (20 cents per mL).
Five localities also impose an excise tax on the products. They include Cook County, Illinois (20 cents per mL), Chicago, Illinois (55 cents per mL), Montgomery County, Maryland (30% wholesale), Juneau, Alaska (45% wholesale), ad Matanuska-Susitna, Alaska (55% wholesale). The mayor of Mat-Su actually vetoed the City Council's tax increase, only to have it overridden on a 5-2 vote soon after.
E-cigarettes are at least 95% less harmful than traditional combustible cigarettes. Efforts to raise taxes on these smoking cessation devices work at cross purposes with efforts to cut down on the harm associated with smoking. This is one of the reasons we at Americans for Tax Reform oppose efforts to raise taxes on the products.
More from Americans for Tax Reform
ATR Opposes Indiana House Bill 1001
In the midst of a $2 billion surplus, Indiana House Speaker Brian Bosma (R-88) has demanded that tax hikes be included in the budget as part of a broader transportation package. His plan stands in stark contrast to Gov. Mike Pence's (R-Ind.), which generates $1 billion in revenue for transportation without raising taxes. In fact, in his State of the State speech, Pence urged the legislature to invest in roads and bridges, "without raising taxes."
House Bill 1001 has been filed and awaits a vote in the House Transportation Committee, where if it passes, will be sent along to the House Rules Committee. The bill seeks to raise the gasoline tax by 4 cents per gallon and index it to inflation, setting on auto-pilot a gas tax hike in perpetuity. It also would raise the state cigarette tax by $1-per-pack. These tax hikes target commuters and low-income consumers who can least afford it.
In response to his effort to raise taxes by hundreds of millions of dollars annually, Americans for Tax Reform president Grover Norquist sent a letter today to the Indiana House of Representatives outlining ATR's opposition to efforts to raise Indiana state gasoline and cigarette taxes.
The letter can be read here:
"On behalf of Americans for Tax Reform and our supporters across the Hoosier State, I encourage you to reject efforts to raise gasoline and cigarette taxes. These tax hikes on commuters and low-income consumers represent a reckless approach to budgeting, especially in the midst of a $2 billion budget surplus. Voting for House Bill 1001 or any bill that raises new revenue for the state would constitute a violation of the Taxpayer Protection Pledge.
First, every dollar extracted from commuters in the form of excise or sales taxes on gasoline should already be used for transportation needs. It is contrary to the expectation of consumers to divert any portion of the state sales tax on gasoline towards priorities that are not related to transportation. Any and all discussions about transportation should immediately and permanently codify the earmarking of gas tax revenue to new and existing transportation projects.
Proposals that seek to index the gas tax to inflation put tax hikes on autopilot and remove from the budget process the responsibility and accountability associated with annual decisions about tax rates. A national public poll last year found that 79% of Americans oppose an increase in the gasoline tax to keep up with inflation and 68% oppose any increase in the gas tax to spend more for infrastructure.
Consumers oppose gas tax increases, whether they are 4 cents per gallon or in perpetuity to keep pace with inflation, because they rightly believe that there is more than enough currently collected revenue to fund a state’s transportation needs. Reasonably and low-priced gasoline allows people to spend more on groceries and other necessities, including long-term investment savings.
Gas taxes are not “user fees.” To qualify as a fee, a consumer must have the choice to purchase the service from the government (and pay the fee) or to purchase the service from a private business. Because anyone who purchases gasoline in Indiana must pay the tax, they are not considered user fees. Tolls are user fees, however, because commuters have the option of using the roads they are levied upon or not.
In total, the gas, special fuels, and motor carrier surcharge tax hikes proposed in HB 1001 represent nearly $730 million in tax hikes through 2020. In his State of the State address, Governor Pence urged the legislature to “invest in roads and bridges…without raising taxes.” I agree with the Governor.
The current draft transportation package also seeks to raise the state cigarette tax by $1-per pack, representing $277.4 million in tax hikes annually. Tobacco taxes not only disproportionately harm low-income consumers and small businesses but are also a volatile revenue source.
Contrary to the claims made by organizations like Hoosiers for a Healthier Indiana, extensive studies suggest that inflicting higher cigarette taxes on consumers will superfluously punish the poor without reducing smoking. As a result of regressive cigarette taxes, many smokers minimize the impact of cigarette tax increases by seeking out lower priced or untaxed cigarettes, or smoking fewer cigarettes more intensively.
Increasing the Hoosier State’s dependence on tobacco taxes by increasing them by $1-per-pack will not guarantee more revenue in the long run. As demonstrated by many states and cities across the nation, targeted excise taxes have proven to be unstable sources of revenue, and ultimately result in a decrease in tax receipts. For example, neighboring Illinois nearly doubled its cigarette tax in 2012 by raising the tax $1-per-pack; it generated $138 million less than projected. In fact, only three out of the 32 state tobacco tax increases, enacted between 2009 and 2013, have met or exceeded tax revenue projects.
Currently, Indiana has a regionally competitive cigarette tax rate of $.995-per pack. It is higher than Kentucky’s $.60-per pack tax and makes Indiana a net exporter of cigarettes to states like Illinois, which boasts the city with the highest state-local tax rate of $6.16-per pack in Chicago.
If enacted, this tax would likely incentivize cigarette smuggling and cross-border sales into states like Kentucky. According to the Tax Foundation, when Illinois almost doubled the cigarette tax rate, cigarette smuggling rate dramatically increased from 1.1 percent to 20.9 percent in the first year. Consequently, small businesses in this state lost tens of thousands of dollars as patrons pursued cigarettes in less expensive markets across state lines, including in Indiana.
Ohio’s 2015 cigarette tax hike has already been a boon for Kentucky. According to Kentucky Budget Director John Cilton, Ohio’s recent 35-cent increase in cigarette taxes has already resulted in an increase in tax receipts in northern Kentucky. The legislature should keep this in mind as it considers a cigarette tax hike in Indiana.
I urge you to resist efforts to raise taxes, especially on those who can least afford it. It’s not just bad policy; it’s fiscally irresponsible to harm state small businesses in an attempt to reap funds from volatile revenue sources like cigarette sales."
More from Americans for Tax Reform
Governor Doug Ducey: “We Will Lower Taxes This Year. Next Year. And the Year After.”
Today, in his second State of the State Address, Gov. Doug Ducey (R-Ariz.) announced, “the state of the state isn’t just strong – it’s on the rise.” This optimism stands in contrast to a less than favorable outlook inherited by the governor. Just one year ago, Ducey inherited more than a $1.52 billion overspending problem for the 2015-2016 years to come.
As a 2014 candidate for governor, Ducey “vowed to not raise taxes or postpone a $226 million corporate tax-cut package” that was to be phased in over the next three years. He kept that promise in year one, despite immense pressure from special interests. Just two months into his first legislative session, he signed a “historically lean $9.1 billion Arizona budget… without raising taxes.”
In his 2016 State of the State address, Ducey mentioned taxes or taxpayers eight times. Here are a few mentions:
“When it came to balancing our budget, we were told: It just couldn’t be done. Not, without raising taxes. But we weren’t going to make the people of Arizona pay for the failings of politicians. So we got the job done, and instead of raising taxes, we lowered them.”
Ducey announced that he would be releasing his budget this Friday, “and the big spenders and special interests aren’t going to like it.”
On the budget, he noted:
“It eliminates waste. It’s balanced. And most importantly, it does not raise taxes. Now, I understand that it’s unusual for elected leaders to keep their promises, but let me assure you: I intend to keep mine.
Together, we will lower taxes this year. Next year. And the year after.”
The governor’s commitment to annual tax cuts is an important one given the scheduled phase-in of annual corporate rate reductions, reductions that some have called for postponing. Doing so would have constituted a tax increase, as the tax cuts are scheduled as a matter of existing law. Over the next two years, the state’s corporate rate will decrease to 4.9 percent.
Absent top rate reductions elsewhere, Arizona’s 4.9 percent corporate tax rate will make the state rate the fourth lowest top rate in the nation, behind Colorado (4.63 percent) North Dakota (4.31 percent), and North Carolina (4 percent). North Dakota cut its rate by 5 percent in 2015 and North Carolina’s rate is on a path to go to 3 percent next year. 6 states do not levy corporate income taxes.
Here are a few of his best lines:
"A year later, the big spenders who told us we couldn’t balance the budget, are beating the drum -- celebrating our hard work with plans to spend and party like it’s 1999. Some people never learn, no matter how much their heads hurt in the morning.
Someone needs to be the voice of sobriety. So when they bring out the punch bowl, I will be here to say ... once again... Not on our watch."
On Barry Goldwater and the number of bills Ducey saw and read in 2015:
"Last year, 1,163 bills were introduced. 344 crossed my desk, and 324 became law. I enjoyed reviewing all of them – yes, even the ones I didn’t sign. But sometimes, as the saying goes…if you want to learn something new, you need to read something old.
As Barry Goldwater wrote in ‘Conscience of a Conservative,’ “my aim is not to pass laws, it’s to repeal them.”
On unnecessary regulations?
“Send me legislation to allow agencies to wipe them out, easier and faster. And I’ll sign it.”
On unnecessary occupational licenses?
"Believe it or not, the state of Arizona actually licenses talent agents. I say, let’s leave the job of finding new talent to Adam Levine and Gwen Stefani – not state government.
The elites and special interests will tell you that these licenses are necessary. But often they have been designed to kill competition or keep out the little guy. So let’s eliminate them."
As a supporter of the free market and services like Uber and Lyft, the governor even created a “Council on the Sharing Economy” just before giving his remarks. Read the entire address here.
More from Americans for Tax Reform
Virginia Governor Terry McAuliffe's Budget Full of Costly Gimicks and Shell Games
Today, Gov. Terry McAuliffe (D-Va.) unveiled an outline for his two-year $109 billion budget, the largest in state history and the first ever to exceed $100 billion. Despite threats to shut down the government in 2014 over his failed attempt to expand Medicaid in Virginia, McAuliffe has included the proposal in his 2016-2017 budget.
Here are the highlights:
- Obamacare’s Medicaid Expansion
- This is the third year in a row an expansion of Medicaid has been proposed by Virginia’s governor, with McAuliffe even threatening to shut the government down if it wasn’t included in 2014.
- $3 billion of budget earmarked for Obamacare in Virginia
- The Republican-run legislature is unlikely to entertain this motion.
- Hospital Tax Increases
- Hospitals will pay a new tax equal to three percent of their revenue as part of the budget.
- The “bed tax” or “provider tax” authorizes collecting new revenue from hospitals in order to obtain a federal match of federal Medicaid funds, which are then usually paid back to the providers in the form of higher Medicaid reimbursement rates for new pools of Medicaid recipients.
- This gaming of the federal Medicaid system is one of the downfalls of Obamacare and results in higher costs for taxpayers nationally.
- Virginia added a Medicaid provider tax after 2009, and raised it in 2011.
- The President and Congress have both taken steps to reduce Medicaid provider assessments.
House Speaker Bill Howell has said, of this proposal, “This makes no sense at all. As I see it, it’s just a shell game.”
- Gimmicks and Tax Cuts
- McAuliffe’s budget “nominally linked $156 million in projected Medicaid savings to budget goodies with particular appeal to Republicans, such as individual and corporate tax cuts.”
- Proposed reducing the Virginia corporate tax rate from 6 percent to 5.75 percent.
- Proposed increasing the personal/dependent exemption on individual income tax returns from $930 to $1,000.
According to the governor, “Actual non-withholding receipts exceeded the cap in fiscal year 2015, contributing to the $549.6 million dollar revenue surplus, the largest in the Commonwealth’s history.”
Instead of gaming national taxpayers by relying on Obamcare expansion dollars to pay for tax cuts, the governor should demonstrate he’s serious about making Virginia more competitive with more aggressive tax reductions, paid for with surplus funds and with less spending increases. That would be a start.
Unfortunately, Gov. McAuliffe’s budget does nothing to rein in out of control spending in Virginia and only seeks to make it far worse. As North Carolina readies for another reduction in their corporate rate, down to 3 percent, the best McAuliffe has to offer is a quarter percent reduction promise contingent on an expansion of Obamacare in the state.
Hopefully Republicans view this for what it is, nothing more than a laundry list of overpriced wants, veiled in a pretend interest in minor tax reductions overall. If there's any silver lining, it's that McAuliffe recognizes that Virginia's corporate rate of 6 percent makes the state regionally uncompetitive.
Budget session begins January 13 in Richmond and will last 60 days.
More from Americans for Tax Reform
ATR Supports Change in Predicate Date for New Tobacco and Vapor Products
Today, Americans for Tax Reform sent a letter to members of Congress urging them to change the predicate date at which new tobacco and tobacco-derived products like premium cigars and electronic cigarettes must undergo expensive and unnecessary regulatory hurdles imposed by the Food and Drug Administration (FDA).
Without Congressional action, the FDA will require all products that have hit the market since February of 2007 to undergo a Pre-Market Tobacco Applications (PMTA) process that could cost upwards of several million dollars per product simply to undergo review.
In 2009, the Tobacco Control Act (TCA) established a predicate date of February 15, 2007 at which all new tobacco and tobacco-derived products must establish “substantial equivalence” to products sold before then in order to avoid an expensive and lengthy pre-approval process by the FDA.
Because of the speed at which innovation has occurred with vapor products since that time, essentially all products currently being sold to consumers fall into this regulatory trap. The process of obtaining FDA approval to continue to be sold isn’t only expensive; it may not actually be possible given the lack of clarity and available data being demanded of each business for each product.
Congress must act to permit innovation to continue for these smoking cessation products that stand to save millions of lives and billions of tax dollars resulting from harm reduction associated with smokers making the transition to tobacco-free alternatives like e-cigarettes.
Below is a full text of the letter:
Dear Member of Congress,
I write today in support of efforts to save the thousands of small businesses in the United States who are selling tobacco-free technology products to adult consumers trying to kick their smoking habit. Though reliant on the sale of tobacco products for billions of tax dollars annually, Congress should help facilitate all efforts by the free market to accomplish what stiff regulations and taxes never could, getting smokers to quit for good.
Unfortunately, without Congressional action, an overreaching Food and Drug Administration (FDA) will proceed with an arbitrary bureaucratic hurdle for the sale of vapor products more akin to prohibition than reasonable regulation. Unable to regulate tobacco products until 2009, the Tobacco Control Act (TCA) established a predicate date of February 15, 2007 at which all new tobacco or tobacco-derived products must establish “substantial equivalence” to products sold before then in order to avoid an expensive and lengthy pre-approval process by the FDA.
Without Congressional action, the FDA pre-approval process will cost upwards of several million dollars per product, a cost affordable to none other than the large tobacco companies, for products already being sold to consumers. Since 2007, significant innovation in the electronic cigarette and vapor product category has occurred, meaning nearly 99% of the life-saving vapor products on the market will cease to exist.
This burdensome regulatory hurdle also stands to harm producers and retailers of cigars, pipe tobacco and dissolvable tobacco.
Amending the predicate date established in the Tobacco Control Act for new products will do nothing to impede upon the FDA’s general efforts to regulate this product category. In fact, grandfathering in all of the products currently being sold to consumers, will save the agency at least two year’s worth of paperwork and allow them to focus on encouraging good manufacturing practices, among other things.
A predicate date change to the date of FDA deeming regulation enactment will simply allow innovation to continue, without decimating an entire market of smoking cessation products and the consumers who use them.
In testimony to the Senate Commerce Committee last June, Matthew Myers of the Campaign for Tobacco-Free Kids explained, “Responsibly marketed and properly regulated, e-cigarettes could benefit public health if they help significantly reduce the number of people who smoke conventional cigarettes and become sick and die as a result.” He explained further that if properly regulated, “I don’t think there is any doubt that there would be a reduction in harm,” from smokers who switched to e-cigarettes. He is absolutely right on this point.
A recent Centers for Disease Control (CDC) survey suggests that there are more than 9 million adult consumers of vapor products in the United States. This represents the greatest accomplishment in public health in decades and is due entirely to the free market. This rise corresponds with a significant decline in smoking rates among Americans and is no coincidence.
That is why I support a change in the 2007 predicate date, which would permit products currently being used by consumers to quit smoking to continue to be sold. This very reasonable step has been put in legislative language authored by Rep. Tom Cole (R-Okl.) in the form of H.R. 2058 and exists in similar form in an amendment made to the House Appropriations Rural Development, Food and Drug Administration and Related Agencies agriculture appropriations bill earlier this year.
Unlike smokers, adult vapor product consumers are becoming single-issue voters who correctly attribute their switch from combustible tobacco products to smoke free alternatives like e-cigarettes to saving their lives. To crush this new and emerging industry would reverse decades of efforts to get people to quit smoking.
I urge Congress to amend the Tobacco Control Act predicate date for the tobacco-derived products in the electronic cigarette and vapor product category in an effort to protect public health and protect American jobs. Such a change in the predicate date would not interfere with the short-term goals of responsibly regulating the products; it would simply help avoid the looming economic and public health disaster associated with status quo prohibition.
Grover G. Norquist
More from Americans for Tax Reform
ATR Launches Campaign to Defeat Tax Hikes in Pennsylvania
Today, Americans for Tax Reform launched a campaign to defeat the pending budget “compromise” being negotiated between Governor Tom Wolf (D-Penn.) and the Republican-run state legislature. The first set of over 75,000 phone calls began going out this morning, asking constituents to contact their state legislators to tell them to stand strong against Gov. Wolf's efforts to raise taxes.
In the fifth month of the budget impasse, a plan that includes a massive 21 percent sales tax hike is currently under consideration. This constitutes a $2 billion sales tax hike. Though it is offset with some property tax relief, the plan still remains a net tax hike and is likely to include new and higher taxes elsewhere.
"Gov. Tom Wolf's desire to spend and tax more without reforming government by doing common sense things like getting the government out of the booze business isn't a mainstream position. Given how long this budget impasse has gone on, it's time legislators start hearing more from their constituents," said ATR President Grover Norquist. "Tax reform shouldn't be used as a trojan horse for tax increases, as can be the case when one tax is lowered and others are raised and new ones are created. Republicans should stand strong against Tom Wolf's plan to raise the sales tax and they should continue to demand that Pennsylvania get out of the liquor business altogether."
The first set of Republican lawmakers’ constituents who will receive phone calls urging them to oppose Wolf's tax hikes are as follows:
- House Speaker Mike Turzai (HD-28)
- Senator Dominic Pillegi (SD-9)
- Senator Robert Tomlison (SD-6)
- Senator Stewart Greenleaf (SD-12)
- Senator Chuck McIlhinney (SD-10)
Suburban moderates in the Senate are the top target of this campaign.
A 30-second recorded call will be delivered to households with residents identified as likely Republican voters in each of these districts. Call recipients are asked to “Press 1” at the conclusion of the message to be directed to their representative’s capitol offices in Harrisburg.
Messages vary by district, with some legislators being urged to reject the massive sales tax hike and others being asked to reject efforts to create a new and higher tax on electronic cigarettes, a tobacco-free alternative to combustible cigarettes.
"The Centers for Disease Control (CDC) estimates that there are 9 million adults who use electronic cigarettes in the United States. These are former smokers who are living healthier tobacco-free lives while the small businesses and shops who help them in this effort contribute to state property, sales, and income taxes. To kill these businesses with a new tax on vapor products would fly in the face of efforts to reduce smoking rates in Pennsylvania," continued Norquist.
More from Americans for Tax Reform
Grover Norquist Speech in New Orleans: The Vaping Movement Will Win!
In a speech to vapor product business owners and consumers, ATR president Grover Norquist recently outlined his view on how vapers can defeat efforts to tax and regulate electronic cigarettes and vapor products. New CDC data suggests that there are more than 9 million adult consumers of vapor products in the United States.
As Grover explains, the large number of consumers using these products to live healthier tobacco-free lives represents a political movement that politicians would be wise to recognize, especially as we head into the 2016 election cycle.
This event took place on November 8, 2015 at Mardi Gras World in New Orleans, Louisiana. The Vaper’s Exhibit helped organize this event.
More from Americans for Tax Reform
New CDC Data: More Than 9 Million Adults Vape Regularly in the United States
A recently released report by the Centers for Disease Control and Prevention (CDC) showed that in 2014, 3.7 percent of American adults used electronic cigarettes or vapor products on a regular basis. That figure represents more than 9 million adult consumers, according to the U.S. Census Bureau.
E-cigarettes are tobacco-free technology products, which are increasingly being used as smoking cessation tools for traditional cigarette users. The National Health Interview Survey also revealed that 12.6 percent of adults in the U.S. have tried an e-cigarette at least once.
Key CDC Survey Findings:
- About 3.7 percent of adults used e-cigarettes every day or some days;
- Almost one-half of current cigarette smokers (47.6%) and more than one-half of recent former cigarette smokers (55.4%) had ever tried an e-cigarette;
- About one in six current cigarette smokers (15.9%) and nearly one in four recent former cigarette smokers (22.0%) currently used e-cigarettes;
- Fewer than 4 percent of adults who had never smoked conventional cigarettes have ever tried an e-cigarette.
The academic research and evidence suggesting e-cigarettes are at least 95 percent and as much as 99 percent healthier than combustible cigarettes continues to mount. Despite the potential boon to public health, tax-hungry lawmakers and fraudulent “public health” groups have waged a war on vaping, pushing for excise taxes on the products throughout the U.S.
Listen to U.S. Senator Ed Markey (D-Mass.) call for an end to the e-cigarette industry:
The same groups that for years argued we had to raise taxes on cigarettes to decrease use are now pushing for tax hikes on the products actually achieving that exact goal among adult smokers.
Threats of imposing excise, or “sin taxes” on e-cigarettes have varied state by state. States like Washington, Vermont, and Oregon have considered wholesale tobacco taxes as high as 95 percent. The reaction of the small business vape shops, working in their communities to help smokers quit has been consistent. The threat of taxation stands to kill their businesses, and the public health benefits they are providing.
A recent tax hike imposed in the District of Columbia immediately resulted in the closure of at least one business, which couldn’t afford to compete and comply.
Politicians waging a war on vaping are doing so to balance bloated budgets on the backs of smokers trying to live healthier lives. If these big government bureaucrats wanted to help people actually quit smoking, they would embrace the growing evidence suggesting these products could save governments billions in health care costs and millions of lives.
9 million adult consumers aren’t going to sit idly by as the products they accurately attribute to saving their lives are under the threat of prohibition. With the growing number of adult e-cigarette consumers in the United States, vapers represent a significant single-issue voting bloc. Candidates for federal, state, and local office would be wise to recognize this constituency as the latest addition to the “Leave Us Alone” coalition, especially in swing states and close elections.
More from Americans for Tax Reform
Passage of Washington State Initiative Shows Just How Toxic Tax Hikes Are
Early returns in Washington state show that voters approved Initiative 1366 by a margin of 54% to 46%, requiring a reduction in the state sales tax or the referral of a constitutional amendment to the ballot that requires a two-thirds legislative or public vote to impose any future tax hikes. The legislature has until April 15, 2016 to decide which will happen. At that point, the sales tax will automatically be reduced from 6.5% to 5.5% unless the legislature sends a Constitutional amendment to the ballot, requiring a two-thirds super majority for future tax hikes. The state's Office of Financial Management estimates that a one percent sales tax reduction would result in a $1 billion annual tax cut for taxpayers.
“Gov. Jay Inslee lied to voters to get elected in 2012, saying he wouldn't raise taxes. After his massive multi-billion job-killing tax hike proposals this year, voters again demonstrated that they were no longer going to trust Democrats to keep them safe from tax hikes, big government, and overspending, said ATR president Grover Norquist. "This is a huge win for Blue State taxpayers. The increasing popularity of supermajority requirements for tax hikes should send a strong message that tax hikes are toxic to a bipartisan majority of voters."
As the Seattle Post-Intelligencer pointed out, "The voters have on five occasions endorsed the requirement for a two-thirds 'super majority' in both the House and Senate for tax increases." A two-thirds requirement for tax hikes in the legislature was last approved by voters in 2010 by a 64-36 margin but was ruled unconstitutional by the state Supreme Court in 2013 on the basis that only a majority is required for legislation. Washington Democrats filed the lawsuit leading to that ruling.
In their endorsement of the initiative, the Post-Intelligencer continued, "Gov. Jay Inslee was elected in 2012 on a [verbal] no-new-taxes pledge, yet Inslee went to the Legislature this year with a proposed capital gains tax and a polluters-pay tax... I-1366 would be the taxpayers shield against runaway costs of government and those seeking to defy the will of the people."
Tuesday’s passage of Initiative 1366 would change the Constitution to comply with that ruling, if the legislature does not simply allow for a reduction in the state sales tax.
Sixteen states require more than a simple majority to raise all or some taxes. In seven states, the constitution requires a supermajority vote of each house, plus the governor’s signature to enact any tax hike. Delaware, Mississippi, and Oregon require a three-fifths vote of each house; Arizona, California, Nevada, and Louisiana require a two-thirds vote of each house.