Paul Blair

Dramatic Coverage of E-Cigarettes Has Negative Policy and Public Health Implications

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Posted by Paul Blair on Tuesday, August 26th, 2014, 3:38 PM PERMALINK

Pundits with little concern for public health have developed clickable narratives about e-cigarettes and vapor products that miss the fact that they are an innovation that should be celebrated. The fact that annually, more than 400,000 people die prematurely from smoking tobacco cigarettes is rarely a focal point for articles about e-cigarettes or vapor products. And unlike the latter, tobacco cigarettes can have negative health effects if used as directed.

Perhaps the stories about tobacco cigarettes have grown old since everyone knows they cause deadly diseases. Perhaps the “newness” of e-cigarettes, which have a similar appearance to tobacco ones, makes comparing them an easy task. But to neglect that not a single person has died to date from properly using an e-cigarette or vapor product is a disservice to our duty to celebrate technological innovation.

New technology often hits small bumps in the road, especially when electricity is involved. Take Tesla, for example. This year the company recalled 29,000 wall adaptors for the Model S after a cord or wall outlet caught fire. The recalls occurred in the midst of a federal investigation into three of the cars bursting into flames after running over something on the road. After the investigation, Tesla made modifications to ensure the risk was minimized.

Fortunately for consumers, legislators and bureaucrats weren’t clamoring to tax the products out of existence as a result of the supposed risk of spontaneous combustion. E-cigarette and vapor product consumers aren’t as lucky.

More than 17 states in the past year have tried to impose onerous and unnecessary taxes on e-cigarettes and vapor products. Proposals ranged from adding a 95% wholesale tax in Washington to adding a 5-cent per mL of e-liquid tax in North Carolina. These taxes were on top of the sales tax, which the products are already subject to.

Like the Model S, a few of these products have had improper use issues. But, the dramatization of minor incidents has serious public policy implications. The public is still being introduced to the product, but is now bombarded by headlines at Mashable like “E-Cigarettes Liquid Nicotine: Toxic, Unregulated, and Overhyped” and “Deadly E-Cigarette Explosions Add to Health Hazards of Vaping.” Both headlines employ a common rationale used against market-disrupting products: until there are hundreds of scientific studies concluding the products are absolutely and unequivocally safe, scare tactics (and headlines) will be a popular press coverage tool, despite the negative policy or health consequences.

In Congressional hearings, proponents of more regulations, like Senator Jay Rockefeller (D-WVa.) have used the “fear of the unknown risk” argument to urge for Congressional and bureaucratic action to limit the industry’s growth. But while there isn’t much actually being accomplished in Washington, D.C., at the state level, countless legislators have jumped to action, to the detriment of those looking for an easier and healthier way to quit smoking.

If focus is going to be given to a few mishaps with overheated batteries, perhaps some context is necessary. After all, lithium ion batteries like the ones contained in many vapor products have a storied history that plays straight into the need for dramatization.

Less than 10 years ago, recalls from nearly every laptop manufacturer in the United States were issued when a small number of batteries overheated. No one called for an additional $1000 tax to be tacked onto Apple’s iBooks, or wrote about the toxic nature of computer usage. The failure of a select few products was fairly attributed to the need for technological tweaks in the batteries selected for use, not the utter failure of laptops to provide a safe environment for Internet cruising and gaming. 

The same isn’t true for e-cigarettes and vapor products. Federal regulators and state legislators are pushing for massive tax hikes that will cripple the industry and stymie growth, to the detriment of public health.  That is because vivid news headlines have an influence over public policy.

It’s time the press, pundits, and lawmakers give e-cigarettes a fair shot at helping cigarette smokers quit. To do this, the press needs to tone down the dramatization of product mishaps. Lawmakers should end the needless and illogical efforts to kill the industry with new tax hikes that treat these products as “other tobacco products.” Millions of lives are on the line. 

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Why Haven’t More States Reformed Medicaid to Save Money? A Perverse Federal Relationship

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Posted by Paul Blair on Saturday, August 23rd, 2014, 2:33 PM PERMALINK

Twenty-seven states including Washington, D.C. have expanded Medicaid under Obamacare over the past three years. New Hampshire was the most recent state to expand the matching-grant program, which is jointly funded by the federal and state governments. Missing from the debate in many states is how to save the safety net by reforming the program, which consumes nearly a quarter of all state budgets.

The Congressional Budget Office projects that under Obamacare, Medicaid enrollment will increase by 30 percent over the next decade at a cost of $574 billion annually by 2024. While reform at the federal level will take a new Administration and Republican majority in the House and Senate, at the state level, reform can be achieved far sooner. Unfortunately, a perverse incentive exists for states to find budget savings elsewhere (if anywhere), instead of through this program. 

The federal medical assistance percentage (FMAP) for Medicaid services is the formula used to determine the federal government’s share of a state’s Medicaid costs. The rate ranges from 50% to 73%, meaning that for every dollar spent in a state on Medicaid services for an enrollee, the federal government picks up the tab for between 50-73 cents. FMAP is the formula that makes a legislator’s task of saving money on the state Medicaid program complicated.

Because the federal government picks up part of the Medicaid tab, they also get their cut of any dollar saved. A state like Virginia receives 50% from Uncle Sam. In order to save one million dollars for state coffers, they would have to cut/save two million on the program. Mississippi, which receives a 73.4 percent match would have to find $3.8 million in savings in order to save $1 million in state dollars because the federal government gets their match as a percentage of all savings.

There is a perverse incentive to cut any money from state Medicaid programs. As the Mercatus Center’s “The Economics of Medicaid” concluded, “The financial terms facing a state seeking to cut its Medicaid spending are unfavorable. In most cases, a state reducing its spending will cut other programs that are paid for by funds covered entirely by the state rather than Medicaid.”

Click here to read “The Economics of Medicaid: Assessing the Costs and Consequences.” 

Stay tuned to our website for more components of the Medicaid expansion and reform debate in the coming days and weeks. 

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Minnesota Republican Jeff Johnson’s ‘Read My Lips’ Problem on Taxes

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Posted by Paul Blair, Jorge Marin on Tuesday, August 5th, 2014, 3:29 PM PERMALINK

Minnesota gubernatorial candidate Jeff Johnson seems to think that run-of-the-mill politician promises are enough to prove his bona fides for November’s election. In his bid to secure the Republican nomination he has refused to sign the Taxpayer Protection Pledge to Minnesota voters. The Hennepin County Commissioner stated, “I’ve never voted for a tax increase… As governor, my philosophy will not change.”

Here lies the “Read My Lips” problem. He isn’t the first person claiming to reject higher taxes while refusing to put it in writing for voters. Take Virginia’s disgraced ex-governor Bob McDonnell. When he ran for governor in 2009, he said, “I’ve been a firm believer that I’m gonna tell you exactly what I think… that I’m going to stick to my word.” He went on to say, “I have no plans to raise taxes” after refusing to sign the Taxpayer Protection Pledge. The Washington Times questioned this approach. He went on to make a tax deal with Democrats and ended up being taken to the cleaners. He signed the largest tax increase in Virginia history into law during his final year in office.

Should voters really be concerned about Mr. Johnson though? In a recent interview with the Minnesota Post Johnson claimed that “[He] do[es] believe that we need to broaden the sales tax base and lower the sales tax rate.” Will it be revenue neutral? Or will taxpayers get sacked? Taking Jeff Johnson at his word isn’t something voters are likely going to do in this political environment. He should be careful that this does not become his “Read my lips moment.” It would be easier to believe that his reforms would be revenue neutral if he allowed taxpayers to have it in writing.

Sadly, it seems Mr. Johnson is unacquainted with the political realities of tax hikes.

And the father of all politicians who thought they could play fast and loose with their campaign promises, George Bush Sr. Not even a president is exempt from keeping his word. Though he was Reagan’s chosen successor, as well as the president who oversaw the downfall of the Soviet Union and the president during a popular war, it was his tax policy which doomed him. After foolishly signing on to a deal granting congressional Democrats their tax hikes in exchange for spending cuts which never materialized, Bush lost reelection to the charismatic Bill Clinton.

There is a pattern of failure for politicians who fail to act as responsible stewards of the taxpayers. Mr. Johnson should veer away from this tax tendency and pledge his support for Minnesota’s taxpayers. This will allow him to demonstrate his willingness to be held accountable for his actions.

Call Jeff Johnson at 763-703-5154 and tell him to sign the Taxpayer Protection Pledge today.

Photo Credit: Beverly & Pack

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Kurt Zellers: The Only Republican Gov Candidate in Minnesota Willing to Take Tax Hikes off Table

Posted by Paul Blair on Tuesday, July 29th, 2014, 4:00 PM PERMALINK

In the race to face off against Democrat Governor Mark Dayton in Minnesota, there is only one Republican candidate willing to take tax hikes off the table: former speaker of the Minnesota House Kurt Zellers. By signing the Taxpayer Protection Pledge, Zellers and his running mate Dean Simpson have made personal written commitments to Minnesota voters to oppose tax hikes. Their opponents have refused to make that same promise. 

Here is what the other Republicans in the race had to say: 

Hennepin County Commissioner Jeff Johnson, "I've never voted for a tax increase…As governor, my philosophy will not change."

If that's true, he should put it in writing. Obama made the same verbal commitment as a candidate in 2008, only to violate it a month after being inaugurated. Johnson's refusal to do so should leave voters asking, why not? A 2011 study by Stanford’s Michael Tomz and Berkeley’s Robert Van Houweling may provide the answer. They found that voters found people who broke the pledge to be “dishonest, immoral … spineless.” That is, even the putative Democrats in the survey saw breaking the pledge as a “character issue.” Might his openness to higher tax rates be the reason he won't sign the Pledge? 

Credit: How Money Walks 

Hennepin County, where Johnson is an elected Commissioner, has last more net annual adjusted gross income (AGI) than any other county in the state. Between 1992 and 2011, the county lost $5.82 billion in AGI. As a resident and an elected official from this part of the state, it's unfortunate that he isn't willing to take tax hikes off the table as a way to make it clear that Minnesota is open for business. 

Former state Representative Marty Seifert: "Voters tend to be cynical of pledges like this." That's ironic because when he ran for governor in 2010, Seifert signed the Pledge. Here's what his campaign had to say at the time:

"For too long, politicians from both parties have said one thing on the campaign trail and acted differently once in office. Republicans lost their way in Washington, DC, and joined the Democrats in out-of-control spending. Republicans then got their just reward: defeat at the polls. Democrats now control all levers of government in Washington and in both the House and Senate in Minnesota. 

Marty Seifert signed the pledge that he will not raise taxes as governor to send an unmistakable message: that the state government spending binge must end and we Republicans must not be accomplices to increasing the already-too-high tax burden on Minnesota families and employers."

I couldn't have said it better. And voters aren't cynical of a politician putting their opposition to higher taxes in writing. They're cynical of politicians who flip-flop, which is clearly what has happened in the case of Marty Seifert, who has raised taxes before. He supported the "health impact fee" which amounted to a massive $380 million cigarette tax increase back in 2005. 

Scott Honour's campaign: "Typical politicians need to sign pledges because the public has no faith in them." The public has no faith in politicians because they say one thing and do another. The Pledge is a powerful tool in preventing that from happening. 

The primary is August 12. Only one gubernatorial candidate has made a written commitment to oppose higher taxes, ensuring that there might be some check on the runaway spending that has taken root in Saint Paul. That candidate is Kurt Zellers. 

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Kurt Zellers and Dean Simpson Sign the Taxpayer Protection Pledge

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Posted by Paul Blair on Wednesday, July 23rd, 2014, 12:30 PM PERMALINK

Former speaker of the Minnesota House Kurt Zellers has signed the Taxpayer Protection Pledge in his bid for the Republican nomination as Governor of Minnesota. His running mate, former state Representative Dean Simpson, has also signed the Pledge. The Pledge, sponsored by Americans for Tax Reform, commits signers to oppose any and all efforts to increase taxes.

Americans for Tax Reform offers the Pledge to all candidates for state and federal office. Fourteen governors and over 1,000 state legislators have signed the Pledge. The Zellers/Simpson ticket is the first to sign the Pledge in their bid to secure the Republican nomination and defeat incumbent Governor Mark Dayton.

The Zellers campaign just released an ad highlighting his record of fighting against higher taxes and his personal written commitment to continue to do it as governor. 


“I want to congratulate Kurt Zellers and Dean Simpson for taking the Taxpayer Protection Pledge. Minnesotans deserve better than tax-and-spend policies that fall hard on the backs of hardworking families and small businesses. They want real solutions that create jobs, cut government spending, and incentivize more economic growth,” said Grover Norquist, president of ATR.

“By signing the Pledge, Zellers and Simpson have demonstrated that they understand the problems of hard-working taxpayers in Minnesota.”

“Democrat Mark Dayton raised taxes by more than $2 billion just one year ago. Two years before that he shut the government down over his demand that the legislature raise taxes.  With Speaker Zellers presiding over the House during that time, he stopped Dayton from getting his way.”

"I challenge all candidates and their running mates in the Minnesota gubernatorial race to make the same commitment to taxpayers by signing the Taxpayer Protection Pledge today,” Norquist continued. 

To view a PDF copy of the press release, click here. 

Photo Credit: 
Glen Stubbe, Star Tribune

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New Poll: Internet Sales Tax Widely Unpopular in Virginia; Will Gas Tax Go Up?

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Posted by Paul Blair on Friday, July 11th, 2014, 3:04 PM PERMALINK

A new poll released by the National Taxpayers Union (NTU) and the R Street Institute found that Virginia voters overwhelmingly oppose federal legislation that would expand state sales taxes to the Internet. The law that some large retailers are pushing alongside many state governments is called the Marketplace Fairness Act (MFA) and would require businesses without a physical presence in a state to enforce state sales tax laws everywhere in the nation that they do business. 

In Virginia, 59% of poll respondents said that they oppose the Marketplace Fairness Act, compared to 33% of voters who said they favor it. Even self-identified liberals oppose the law by a 47 to 46 point margin. Republicans oppose the bill 67% to 28% and Independents oppose it 56% to 36%. Voters are even more opposed to the concept of empowering out of state retailers to collect taxes on Virginia online consumers, by a 68% to 26% margin. 

The Marketplace Fairness Act has little chance of passing Congress this year but that hasn't stopped some from pushing for the bill, in an effort to generate revenue for the state. The 2013 transportation package, which amounted to a $5.9 billion tax increase on Virginians included a provision that counted on passage of MFA at the federal level, as a way of generating money for state coffers. If and when MFA fails to pass by year's end, the state gas tax will automatically increase from 3.5% to 5.1%, amounting to a $1.2 billion tax hike over 5 years. 

Conservative activists would be wise to focus on repealing this provision of House Bill 2313 (the transportation package) instead of urging members of Congress like Representative Bob Goodlatte to support MFA. 

"This most recent poll confirms what many of us have been saying for more than a year; subjecting small businesses and online consumers to billions of dollars in higher taxes and compliance costs is a widely unpopular idea, especially in Virginia," said ATR state affairs manager Paul Blair. 

"Last year's transportation package included a trigger to grab more money from consumers if the Marketplace Fairness Act failed and now state lawmakers have until the end of the year to figure out how to stop the gas tax from going up. Without legislative action in Richmond, motorists throughout the commonwealth will all see even higher gas prices at the beginning of next year. 

If I was a Republican running for re-election in next year's legislative races and had previously supported the transportation package and online tax schemes like MFA, I'd be worried about a primary challenge from the right."

To learn more about the Marketplace Fairness Act and our fight against taxing the internet, visit

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Virginia Experiences Worst Economic Recovery of any State in Region Since End of Great Recession

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Posted by Paul Blair on Tuesday, July 1st, 2014, 3:02 PM PERMALINK

According to recent numbers released by the U.S. Bureau of Economic Analysis, Virginia's recovery from the Great Recession has been the worst of any state in the region. Between 2010-2013, the commonwealth's economy grew at a paltry 2 percent. The national economy grew by 6.1 percent over the same time. Other states in the Mid-Atlantic all experienced greater growth during that time. Maryland's GDP growth was 2.9 percent, North Carolina 5.1 percent, West Virginia 6.2 percent, Kentucky 4 percent, and Tennessee 7 percent. 

This analysis does not take into consideration that the U.S. economy shrank by 2.9 percent during 2014's first quarter, the largest contraction since 2009. 

 (Picture credit: Washington Examiner

Virginia politicians have long prided themselves on being from a state ranked as one of the best for doing business by CNBC's annual rankings. It was ranked number one in three of the eight years since CNBC started the list, in 2007, 2009, and 2011. In 2014, that ranking fell to number 8, due largely in part to budget constraints in Washington. The state's reliance on federal expenditures, particularly military outlays in Hampton Roads and Northern Virginia have been somewhat of a distraction from the need to diversify the state's economy with more private investments and business.

 A $5.9 billion tax increase signed into law last year certainly didn't help with any sort of recovery either. Despite the tax increase, the state experienced a $300 million shortfall in state revenue collections for 2013.  And ironically, while the tax increase was supposed to go to new construction projects, between 2012 and 2013, construction actually declined by .09 percent as a percentage of real GDP in the state last year. Construction, utilities, and mining all declined over that time.

North Carolina, by contrast jumped from 13th to 5th in CNBC's rankings thanks to a historic tax reform package signed into law by Republican Governor Pat McCrory. While Virginia politicians were raising taxes, North Carolina Republicans were cutting them. Some of the results speak for themselves. 

Going forward, will Democrat Governor Terry McAuliffe acknowledge that higher taxes and more spending don't contribute much to any sort of economic recovery? If this year's legislative session in Richmond was any indication, the answer to that question is no. 

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New Jersey Democrats Propose Massive $1.6 Billion in Annual Tax Hikes

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Posted by Paul Blair on Wednesday, June 18th, 2014, 4:52 PM PERMALINK

Democrat Senate President Stephen Sweeny (D-Glaucester) along with Senator Loretta Weinberg (D-Teaneck) and other New Jersey Senate Democrats just announced an income tax and business tax hike to address the state's $807 million budget deficit. Initial estimates suggest the plan will raise $1.6 billion in revenue, which would fund next year's pension payment. It wouldn't go to transportation, education, or public safety. 

The proposal raises taxes on those earning more than $500,000 and adds a 15 percent business tax surcharge. These massive tax hikes were announced on the same day that one of New Jersey's public employee pensions voted to sue over Governor Chris Christie's plan to defer a $900 million pension payment. 

Governor Christie has repeatedly called for additional reforms to deal with the ballooning costs of public employee pension, health benefits, and debt service that are engulfing the budget. In fact, 94 percent of the year-over-year growth from the current budget to the Governor's proposed budget for next year is going to the growth in these things, not education, transportation, or anything else. New Jersey Democrats clearly don't understand that curbing spending with legitimate long-term reforms is the only real solution to a $54 billion underfunded pension crisis. 

New Jersey is the next-to-last worst place in the nation to do business. According to the Tax Foundation, it has the highest property taxes in the nation, 9th highest corporate tax, 6th highest income tax, and 4th highest sales tax. The Democrat plan would raise the top income tax rate from 8.97% to 10.75%. Individuals making between $500,000-$1 million would pay 10.25%, up from 8.97%. Only two states impose higher state income taxes: Hawaii at 11% and California at 13.3%. 

Clearly Democrats have no interest in promoting economic growth. Instead of reforming the public pensions, they would rather run even more businesses and taxpayers out of the state. Between 1992-2011, New Jersey lost $22.3 billion in annual adjusted gross income to states like Florida, which does not tax income. It also lost more than 429,000 residents. The Democrat plan flies in the face of what neighboring New York (where the governor is a Democrat) was able to accomplish this year: tax cuts. Next year, New York is even poised to move ahead of New Jersey, passing along to them the dead last ranking for a business competitiveness climate. 

Governor Chris Christie is the only thing standing in the way of the Democrat plan to turn New Jersey into Detroit. He recently said, "I won't raise taxes on the people of New Jersey to pay for a Cadillac pension system." His proposal would pay $696 million in pension payments out of a scheduled $1.6 billion, and another $681 million next year. 

Republicans have an alternative to the Democrat tax hike, which can be read here. It eliminates the proposed tax hikes and prioritizes state spending. Democrats better come up with something else or they may forever seal their fate as clueless in the fight to stop taxpayers and their businesses from fleeing to more friendly states. 

Photo Credit: 
NJ Monthly

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ATR Opposes New Vapor Tax in North Carolina

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Posted by Paul Blair on Friday, May 23rd, 2014, 4:24 PM PERMALINK

As the summer session of the North Carolina legislature heats up, an omnibus tax bill is up for consideration that makes a few tax adjustments in the year following the historic tax reform package signed into law by Governor Pat McCrory

The House recently passed H.B. 1050,which among other things includes a 5-cent per milliliter tax increase on e-cigarettes and vapor products, which contain liquid nicotine. The companion bill is S.B. 763 and both bills await consideration in the Senate. 

Vapor products and e-cigarettes are already taxed at a sales tax rate of between 4.75 and 8.25 percent. Imposing an additional tax on these products will hurt North Carolina vapor companies and small businesses struggling to make ends meet. This is especially true of convenience stores, which have begun to rely on these products more heavily to replace revenue lost from declining sales with tobacco products.

While the overall bill may be revenue neutral, imposing additional taxes on these innovative products will chase business out of the state and onto the Internet, which is already a significant market for e-cigarette and vapor products.

Taking aim at e-cigarettes also works at cross-purposes with efforts to cut down on the harm associated with smoking. A number of studies have shown that electronic cigarettes stand to improve health and prevent disease. By choosing to “vape” e-cigarettes instead of smoking traditional tobacco, consumers get their nicotine fix without the combustion and smoke, which are responsible for many of the negative health effects of tobacco cigarettes.

A new study funded by the charity Cancer Research UK published in the journal Addiction found that smokers trying to quit are 60 percent more likely to report success with e-cigarettes than with any other method. With e-cigarettes, the free market has provided a solution to a problem that social engineers have not been able to address through stiff government regulations. ​

Last year, the legislature passed the most significant tax reform package of any state in years. It brought tax relief to millions while reversing decades of taxes going in one direction: up. Though these two companion bills are not violations of the Taxpayer Protection Pledge, they do take a step in the wrong direction.

Other states, including Washington, Oregon, Hawaii, Massachusetts, and Vermont have all rejected efforts this year to raise taxes on e-cigarettes and vapor products. That’s because of the harmful impact on small businesses and concerns about public health. For these reasons, the vapor tax portions of HB 1050 and SB 763 should be stripped from the bills and considered individually, so that all sides can have an opportunity to debate the merits of the proposal.

Click here to read the full letter from ATR president Grover Norquist

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Governor John Kasich's Tax Shifting Scheme

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Posted by Paul Blair on Wednesday, May 21st, 2014, 4:52 PM PERMALINK

Now that Ohio primary season is over, legislators are free to begin work on the hot button issue of the 2014 legislative session: tax reform. Governor John Kasich's proposal defies the basic tenants of conservative tax reform. It redistributes the tax burden on the backs of low-income Ohioans while taking aim at the energy industry, which is creating thousands of jobs in eastern Ohio. 

The governor's proposal certainly starts off on the right foot. By further reducing the income tax by 8.5 percent and raising the personal exemption, taxpayers would get to keep more than $2.6 billion of their hard-earned income over the next three years. Unfortunately, Kasich's complete proposal engages in tax shifting that raises taxes on tobacco, energy, and small businesses.

As if President Obama's war on energy producers wasn't enough, Governor Kasich's first tax increase targets Ohio oil and gas with higher frack taxes. The industry supports thousands of jobs in Ohio, both directly and indirectly. The shale energy revolution will generate billions of dollars in economic activity, thousands more jobs, and in turn more income tax and sales tax revenue for the state without higher tax rates.

To suggest as OSU professor Mark Partridge did that a $847 million tax hike would be "inconsequential" defies common sense and logic. The governor's proposed severance tax would absolutely discourage investment in this sector of the economy.

Gov. Kasich also goes after low-income consumers with a proposed 60-cent increase in the cigarette tax. As a percentage of income, low-income individuals spend seven times more on cigarettes than wealthy ones. That¹s why tobacco taxes are extremely regressive, disproportionately burdening the poorest individuals the most. 

Even more, raising cigarette taxes does not necessarily mean more revenue for the state. In May of 2012 when Illinois raised the cigarette tax by $1-per-pack, the tax delivered $138 million less than expected. Before that, of the 57 tobacco tax increases enacted by states between 2003 and 2008, only 16 met initial revenue projections.

There's also a negative impact on small businesses. They often lose tens of thousands of dollars as a direct result as consumers purchasing tobacco across state lines. Convenience stores, for example, rely on cigarettes and other tobacco products for more than 40 percent of all store revenue. To avoid higher tobacco taxes, consumers have constantly demonstrated that they are willing to purchase the products in less expensive markets.

Anti-smoking activists and public health advocates should be concerned about the next target of Gov. Kasich's tax hikes: e-cigarettes and vapor products. His proposal would raise taxes by more than 700 percent on these products. This would cripple brick and mortar vapor shops and do irreparable damage to small businesses struggling to make ends meet.

Taking aim at e-cigarettes with higher taxes works against efforts to reduce the harm associated with smoking. A number of studies have shown that electronic cigarettes can improve health and prevent disease. By choosing to "vape" e-cigarettes, consumers get their nicotine fix without the combustion and smoke, which are responsible for many of the negative health effects of tobacco cigarettes.

Higher taxes on innovative products that reduce smoking and people¹s dependence on tobacco are misguided and will impede proven harm reduction methods. That is probably why bills to raise taxes on these products have stalled in the legislature.

Between 1992-2011, Ohio lost more than 390,000 people and $19.6 billion in annual adjusted gross income to business and tax friendly states like Florida, Tennessee, and Texas, all states that do not tax income. That's why lowering and eventually eliminating the income tax is a goal that governors and legislatures nationwide should work towards. There are, however, ways to accomplish this without needlessly targeting innovative products and industries with higher taxes, especially when higher taxes on those things may not generate more revenue for state coffers.

There are a number of states getting tax reform right, North Carolina and Kansas most recently. Governor Kasich's proposal does not simplify the tax code - the jungle of Ohio¹s chaotic municipal income tax system remains intact - it instead engages in little more than tax shifting. 

Tax reform in Ohio should include a reduction of the number of income tax brackets - there are currently nine - and address the out of control and burdensome municipal income tax regime. It absolutely should not pick winners and losers. Pro-growth tax reform takes a willingness to make tough choices, which Governor Kasich's proposals fail to do.

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