Smoke Clears on Real Reason for Chicago E-Cig Tax

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Posted by Hal Smith on Wednesday, September 16th, 2015, 1:59 PM PERMALINK

After recently cementing its status as the highest-taxed cigarette city in the United States, lawmakers in Chicago are now targeting products used as a healthier alternative to traditional tobacco. Reeling from declining tobacco revenues and faced with a massive budget hole as a result of overspending and lack of local reform, some Democrats have decided to go after e-cigarettes with a new massive tax hike.

For those don’t simply purchase cigarettes in other jurisdictions, many tobacco consumers in Chicago have switched to the more affordable and healthy nicotine-delivering alternative: electronic cigarettes and vaporizers. However, this option may also become too expensive as one tax proposal will attempt to tax tobacco-free technology products at the same level of traditional combustible tobacco.

Alderman Proco “Joe” Moreno wants to bring a plan to the City Council to institute an excise tax on electronic smoking: $1.25 for each e-cigarette and 25 cents per mL of liquid to fill the cartridge. Misconstruing this effort as anything other than trying to compensate for the city’s unwillingness to reform government, he’s neglected to even attempt to reform the city’s pension woes.

Moreno’s proposal would do very little to fill the budget hole – it is projected to bring in less than $1 million, compared to the hundreds of millions of dollars needed to balance the budget and make public employee pension payments.

Instead of celebrating historic declines in adult and teen smoking rates in Chicago, Democrats have scrambled to find alternative revenues to compensate for a declining tax base. Instead of pretending the effort to raise taxes on e-cigarettes were about “public health,” lawmakers should admit that this is about nothing more than tax dollars.

Chicago lawmakers should not be looking to excise taxes on volatile new industries for revenue sources. These legislators should be focusing their energy on reforming citywide spending, most importantly the pension payouts.

Public health officials, agencies, and studies are concluding that tobacco-free e-cigarettes are at least 95% less harmful as traditional tobacco. Effort to tax them the same, like Alderman Moreno’s are misguided and represent a slap in the face to decades of efforts to curb smoking through cessation and harm reduction methods.  

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