Matt Owens

Tax Hikes on Vaping on the Ballot in Oregon, Colorado

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Posted by Matt Owens on Tuesday, October 20th, 2020, 1:08 PM PERMALINK

Misguided tax hikes on vaping threaten public health in Oregon and Colorado. Both states have upcoming ballot measures which would increase taxes on cigarettes and vaping, even though Public Health England and the Royal College of Physicians have concluded that e-cigarettes are at least 95% less harmful than cigarettes.

Oregon Measure 108 places the option on the ballot for voters to decide on a tax hike which would raise rates from 1.33$ per 20 pack of cigarettes to 3.33$. As it applies to E-Cigarettes, the ballot measure, if passed, would impose a tax at a rate of 65 percent of the wholesale sales price for the product. Cigars would also be effected by this ballot measure by increasing taxes from $0.50 to 1.00$ per cigar, this would raise the tax rate to 65 percent, which is its wholesale sales price cap.

The revenue generated from this ballot measure would go to funding multiple health programs for the state.  From 2008 to 2018 nine other ballot measures had been offered by states for a tobacco tax increase. The ballot measures in the past had all been defeated by voters; except Proposition 6 in California during 2016.

Colorado Proposition EE is another ballot measure tax hike. In Colorado cigarettes are currently taxed at a rate of 84 cents per pack.  The ballot measure would set up an incremental schedule to increase the tax rate for cigarettes to 1.80$ per pack by July 2027. This would result in a 2.64$ tax rate per pack overall. For cigars, the ballot measure would incrementally raise the tax rate from 20 percent to 22 percent by July 2027. E-Cigarettes are currently not taxed in Colorado.  This ballot measure would create a new tax for E-Cigarettes starting at 30 of percent manufactures list price in 2021, and incrementally increase to 62 percent of manufactures list price by July 2027. Most of the revenue from these new taxes will be geared towards education funding but, a sizable portion will also be directed towards the general fund.

These taxes make life-saving vape products more expensive and less accessible, and risk jobs and businesses as small vape shops will suffer. Meanwhile cigarette tax revenue is notoriously unreliable. Colorado and Oregon voters will have to consider the many downsides of these tax hikes as they head to the polls.

Photo Credit: Bonnie Moreland

A Number Of Tax & Fee-Related Measures On The November Ballot In Colorado

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Posted by Matt Owens on Monday, September 28th, 2020, 2:32 PM PERMALINK

As the general election draws closer there are two major ballot measures coming up this November that will affect the personal finances of most Colorado residents. One is Proposition 116, which would reduce Colorado’s flat income tax from 4.63 percent to 4.55 percent.

Prop. 116, if approved in November, will allow individuals, families, and thousands of small businesses across Colorado keep more of their hard-earned income, at a time when it is most needed for many. Opponents of this tax cut, which include leading Colorado Democrats, argue that the income this measure would allow taxpayers to keep would be better spent by state government.

Another 2020 ballot measure that will affect Colorado taxpayers is Proposition 117, which would subject future fee increases to the same voter approval that tax hikes are subjected to in accordance with the state’s Taxpayer’s Bill of Rights (TABOR). Under TABOR in Colorado, an increase in taxes must be approved by voters through a ballot measure. Colorado politicians have long used fee increases as a way to circumvent TABOR in an effort to grow the size of government.

 In 2019, the Colorado Supreme Court ruled that business fees were not considered taxes and therefor outside the purview of TABOR. Proposition 117 looks to close this loophole by requiring voter approval on any fee increase that raise more than $100 million in revenue during the first 5 years.

Propositions 116 and 117 are not the only tax and fee-related ballot measure that Colorado voters will decide upon this fall. There are also measures on the Colorado ballot to raise residential property taxes by repealing the Gallagher Amendment, along with a measure that seeks to impose a massive tax hike on tobacco, e-cigarettes, and vaping products. The outcome of all these measures will provide an up-to-date indicator on views on taxes in a consequential purple state trending blue.

Photo Credit: Einar Einarsson Kvaran

More from Americans for Tax Reform

The Hidden Costs of Fines and Fees

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Posted by Matt Owens on Friday, September 25th, 2020, 1:30 PM PERMALINK

Often times local governments like to get “creative” about raising revenue. One of the most pernicious avenues for this is fines and fees relating to the criminal justice system.

Local governments may view fines and fees as an easy way to make money that doesn’t require raising tax rates. They also may use this tactic to avoid caps on local tax increases, to keep growing government. The reality is that using fines and fees as a revenue source is far less consistent and effective than politicians might hope.

A recent analysis found, “Most (local governments) fail to collect 20 to 30 percent of the fines and fees that they assess” … “One New Mexico county pays $1.17 to collect every dollar it brings in.” What looks like any easy cash grab at first, might not pan out that way. Even though most governments are taking in money overall, it is inefficient.

“Hundreds of municipalities rely on them for more than 20 percent of their general fund revenues.” This turns fines and fees into taxes, and turns police officers into tax collectors. It creates a strange incentive system where in order to cover their budget for the year, government must impose a large number of fines. Meanwhile, actual crime rates are trending down. It begs the question, is the purpose of our system justice or revenue? Are punishments being applied to offenders because we believe them to be appropriate or because we want to raise funds? 

Some say the quota shake down is real, Officer Adhyl Polanco told NPR, "The culture is, you're not working unless you are writing summonses or arresting people.”

The true cost of fines and fees gets worse when you consider that many states allow courts to suspend peoples’ driver’s licenses as a punishment for owing court debt.

This practice means people who have not committed an offense related to safe driving can lose their ability to get to and from work because they owe fines and cannot afford to pay them. This creates a vicious scenario where someone has to risk committing another, often worse offense, driving without a license, or risk losing their job. Not working only makes it harder for someone to afford their court debt.

Some states are pursuing solutions to these challenges. A number of states have ended the practice of suspending one’s driver’s license as a punishment for owed court debt. While other states have limited how reliant local budgets can be on fines and fees, as ATR President Grover Norquist writes in the Chicago Tribune:

Missouri passed legislation limiting fines, fees and court costs to a total of $300 and preventing cities from jailing people simply because they couldn't pay. Missouri also passed legislation lowering the cap on the percentage of a city’s budget that could come from fines and fees from 30% to 20%.”

Much more progress needs to be made. The justice system should place public safety and justice first, not what is profitable.


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