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Conservative Groups Urge President Trump To Protect Vapers from Flavored Product Ban

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Posted by Paul Blair on Thursday, October 3rd, 2019, 6:00 AM PERMALINK

Today, Americans for Tax Reform President Grover Norquist and a coalition of center-right organizations from across the country called on President Donald Trump to preserve access to electronic cigarettes and vapor products that millions of American adults are using to quit smoking or reduce their dependence on tobacco products in the United States. In recent weeks, there have been calls to ban flavored vapor products, including a push by New York billionaire activist Mike Bloomberg, who has invested more than $160 million to push a ban. In the midst of historic-low smoking rates among both teenagers and adults, a number of organizations are urging the President to implement reasonable regulations instead of outright prohibition.

The growing global consensus is that e-cigarettes are at least 95% less harmful than traditional combustible cigarettes. Furthermore, a study published in the New England Journal of Medicine found that e-cigarettes are twice as effective at getting smokers to quit as government-approved smoking cessation products like the nicotine patch. 

Essential to the success of e-cigarettes as a tool for reducing adult use of cigarettes is the availability of flavors. Instead of confusing the issue of illness and deaths associated with illicit marijuana use and the popularity of e-cigarettes as a quit-smoking tool, conservative organizations nationally are urging President Trump to protect more than 10,000 small businesses that sell e-cigarettes to adults and implement sensible regulations instead. 

A PDF of the letter and its signers can be found here. 

 

Dear Mr. President,

 

We urge you to preserve access to life-saving alternatives to cigarettes for the millions of adults who rely on electronic cigarettes and vapor products to quit smoking in the United States. Of particular importance is the preservation of flavored products, which are not only the preferred product for adult smokers but essential to the success of vaping as an alternative to cigarette use long-term.

Your administration has rightly derided “regulatory dark matter,” or agency-generated guidance because it imposes “back door” regulations without going through a formal rule-making process. The flavored vapor product guidance under consideration by the FDA is among the most striking and nontransparent violations of your commitment to limit dark regulations since you took office. Unchallenged, the FDA will destroy thousands of small businesses without Congressional oversight and without sufficient input from the public.

Over 10,000 small mom-and-pop vape shops comprise an overwhelming percentage of this industry and represent the fastest-growing retail segment of the past ten years, a recent Labor Department analysis shows. A Wells Fargo analysis estimates that the commercial e-cigarette and vapor product industry is expected to be a $10 billion industry by next year, a growth trajectory that has significantly reduced combustible cigarette sales across the country. 

A vast majority of these businesses employ fewer than ten employees, making the shops that sell e-cigarettes to adults trying to quit smoking increasingly reliant on sensible federal regulations that don’t impose millions of dollars in costs through a FDA regulatory process designed purposefully by Congressional Democrats and the world’s largest tobacco companies to end in failure.

Billionaires like former New York City Mayor Mike Bloomberg have long attempted to curtail individual rights and consumer freedom in the United States. He has already committed nearly $1 billion to anti-tobacco efforts globally, in seeking to influence organizations like the World Health Organization and fund research that demonizes adult smokers and adult vapers. On September 10, he announced a $160 million push to ban flavored e-cigarettes in America. Given your administration’s historic accomplishments and deregulatory agenda, it would be a mistake to allow HHS and the FDA to take marching orders from activists like Mike Bloomberg.

Adults like flavors. That’s precisely why everything from vodka to ice cream comes in a variety of flavors. When it comes to vaping, this holds true. Prior to the rise of JUU Lin 2018, more than 80% of adult vapers used fruit, dessert, and sweet flavors to stay away from cigarettes. Tobacco and menthol e-cigarette flavors ranked as the fifth and sixth most popular flavor before one company dominated the traditional convenience store market. 

Eliminating all but one or two of these options for adults would destroy thousands of small businesses, force many adult vapers to return to smoking, and force some to seek out products on the black market. 

Both the FDA and Centers for Disease Control and Prevention now acknowledge that the recent deaths and respiratory and lung illnesses associated with vaping have largely been caused by the illicit marijuana and THC market. Instead of targeting legal nicotine products that have existed for a decade, the administration’s focus should be on cracking down on California drug dealers that are poisoning consumers with dangerous, unregulated, and counterfeit products sourced from places like China and Mexico.

Your administration can keep e-cigarettes out of the hands of teenagers without jeopardizing the great accomplishments that have been made in public health through the availability of vapor products for adults. We urge you to immediately halt the FDA’s planned actions that will limit choices for millions of American adults who rely on flavored vaping products to quit smoking. More than 100,000 jobs and the lives of 34 million adult smokers are on the line.

Sincerely,

Grover Norquist

President, Americans for Tax Reform

 

Phil Kerpen

President, American Commitment

 

Daniel Schneider

Executive Director, American Conservative Union

 

Steve Posiask

President, American Consumer Institute

 

Ryan Ellis

President, Center for a Free Economy

 

Thomas Schatz

President, Citizens Against Government Waste

 

Jeff Stier

Senior Fellow, Consumer Choice Center

 

Michelle Minton

Senior Fellow, Competitive Enterprise Institute

 

Katie McAuliffe

Executive Director, Digital Liberty

 

Jason Pye

Vice President of Legislative Affairs, FreedomWorks

 

Julie Gunlock

Director of Center for Progress and Innovation, Independent Women’s Forum

 

Annette Meeks

CEO, Freedom Foundation of Minnesota

 

Naomi Lopez

Director of Healthcare Policy, Goldwater Institute

 

Mario H. Lopez

President, Hispanic Leadership Fund

 

Sal Nuzzo

Vice President of Policy, James Madison Institute

 

Seton Motley

President, Less Government

 

Michael LaFaive

Senior Director of Morey Fiscal Policy Initiative, Mackinac Center for Public Policy

 

Brent Mead

CEO, Montana Policy Institute

 

Daniel J. Erspamer

President, Pelican Institute for Public Policy

 

Carrie Wade

Director of Harm Reduction Policy, R Street Institute

 

Becky Norton Dunlop

Senior Official, Reagan Administration and Member of the Trump Transition Team

 

Guy Bentley

Director of Consumer Freedom, Reason Foundation

 

Paul J. Gessing

President, Rio Grande Foundation

 

David Williams

President, Taxpayers Protection Alliance

 

Ashkhen Kazaryan

Director of Civil Liberties, TechFreedom

 

James L. Martin and Saulius “Saul” Anuzis

Founder/Chairman and President, 60 Plus Association

Photo Credit: Vaping360.com

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A Trump Ban on Flavored E-Cigarettes Will Cost Him the 2020 Election: Data on 12 Important Swing States

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Posted by Paul Blair on Wednesday, September 18th, 2019, 5:49 PM PERMALINK

Over the past week, President Donald Trump has been considering an outright ban on nearly every electronic cigarette and vapor product on the market. Not only would the implementation of a flavor ban be disastrous for public health, but it may cost Trump the election in 2020.

In a piece for the Washington Examiner, I explained:

"Internal polling conducted by Americans for Tax Reform in October 2016, just five months after the Obama administration announced their own timeline for a de facto e-cigarette ban, found that 4 out of 5 adult vapers' vote-moving issue was where a politician stood on the issue of taxing, regulating, and banning e-cigarettes."

Link to poll.

What might that mean in 2020? If you look at the 12 states which will likely determine the outcome of the election, based on the margin of victory or loss by Donald Trump in 2016 and changing political currents, there are at least 4.15 million adults in battleground states that use electronic cigarettes, according to FDA-funded survey data. Those states include Florida, Pennsylvania, Ohio, Michigan, North Carolina, Wisconsin, Georgia, Minnesota, New Hampshire, Maine, Arizona, and Nevada.

Here's how that breaks down per state (click to enlarge): 

(Click to enlarge an excel version of this graphic.)

If voter turnout holds flat in 2020 over 2016, there are roughly 2.55 million vaper voters scattered across these 12 key battleground states. The data on the number of adult vapers may underestimate the true figure because adult use of these products has increased in the last two years. To ignore that these adults have used e-cigarettes to quit smoking cigarettes, something that they're proud of and strongly believe in would be among the biggest political miscalculations of the presidential campaign in 2020. Not only do these people rightly attribute the use of flavored nicotine products to saving their lives, but their family members, friends, and neighbors have likely heard their stories as well.

If Trump wants to depress voter turnout or turn voters away from his winning message in states where the margin of victory could be just a few thousand votes, banning flavored nicotine e-cigarettes would be a great way to go about it.

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Michigan Governor Announces Unilateral Plan to Ban Nearly All Electronic Cigarettes

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Posted by Paul Blair on Wednesday, September 4th, 2019, 10:40 PM PERMALINK

Today, Governor Grechen Whitmer (D-Mich.) announced plans for the first-in-the-nation statewide ban on the sale of flavored electronic cigarettes and vapor products. Her unprecedented actions were announced as part of a “public health emergency,” which she argues gives her the power to implement a ban without legislative approval. If implemented, this ban will destroy thousands of jobs, send hundreds of thousands of ex-smokers back to combustible cigarettes, and could create political turmoil in the swing state of Michigan. 

A version of the “Protection of Youth from Nicotine Product Addition Emergency Rules” obtained by Americans for Tax Reform sheds light on the shaky basis for the use of an “emergency” for prohibition. In the rule to be filed with the Secretary of State in the coming weeks, the governor argues: 

  • “Youth who use e-cigarettes are more likely to start smoking combustible cigarettes”;
  • The youth “epidemic can be attributed to the appeal of flavored vapor and alternative nicotine products”;
  • “Prohibiting the retail sale of flavored vapor and alternative nicotine products will result in less product available on the market… which should ultimately result in decreased youth tobacco use.”


The ban applies to all flavored non-combustible nicotine products, including those with mint and menthol flavoring, and makes an absurd jump to over-criminalize the mere possession of vapor products. In an unpublished draft of the rules, “a person who possesses four or more flavored vapor products, or flavored alternative nicotine products is rebuttably presumed to possess said items with the intent to sell,” a misdemeanor offense and punishable with up to 6 months in prison in the state of Michigan. 

Criminalizing the possession of as few as four e-cigarettes flies in the face of voters’ growing sentiments about personal choices when it comes to consumer products, namely marijuana. In 2018, Michigan became the 10th state in the country to legalize the recreational use of marijuana when 56% of voters approved the Michigan Regulation and Taxation of Marihuana Act. The voter initiative legalized possession of up to 2.5 ounces of cannabis and allows homeowners to grow up to 12 plants of marijuana in their homes. Dispensaries are expected to open soon. 

The pending ban of nicotine-containing e-cigarettes and new legalization of THC/marijuana, which can be consumed through e-cigarettes is puzzling. Adults in Michigan in 2020, under Gov. Whitmer’s agenda, will be able to smoke to get high but not vape nicotine to reduce their dependence on combustible cigarettes. 

Beyond consumer product liberalization paradoxes, this move also stands to harm public health. Millions of adults are using flavored e-cigarettes that contain nicotine to reduce or eliminate their dependence on cigarettes, the use of which results in the premature death of more than 400,000 American adults annually. The growing global scientific consensus is that compared to combustible cigarettes, e-cigarettes are at least 95% less harmful than cigarettes, a fact even acknowledged by the American Food and Drug Administration. Removing these products from store shelves will leave hundreds of thousands of current and former smokers few options other than to continue or return to smoking cigarettes, products untouched by the governor’s planned ban.

It should be noted that the basis of the governor’s ban is without merit on grounds of a “gateway effect” for vaping as well. Contrary to her claims, e-cigarettes have not proven to be a gateway to smoking, evident by the fact that despite youth experimentation with the products, smoking rates among teens has fallen in recent years. In fact, new data from the 2018 National Survey on Drug Use and Health found that only 2.7% of adolescents aged 12 to 17 reported smoking cigarettes in 2018, down from 3.2% in 2017. Even more compelling is the fact that youth initiation of cigarette use declined from 2.4% in 2017 to 2.3% in 2018. Overall, there has been a 79% decline in cigarette smoking since NSDUH first measured use in 2002. 

Data from the 2018 Monitoring the Future survey indicated a similar decline in use of cigarettes, down from 5.4% in 2017 to 4.6% in 2018 among 8th, 10th, and 12th graders (which included 18-year-olds who can legally smoke). This same survey indicated that past-month use of marijuana for seniors in high school stood at 22.2%, compared to 7.6% of seniors who had reported smoking cigarettes in the past month. 

Going even further into the available data to include the use of all traditional tobacco products (cigarettes, smokeless tobacco, cigars, and pipe tobacco), just 4.2% of adolescents aged 12 to 17 reported use of these products in 2018, down from 4.9% in 2017 according to the NSDUH.

(Click for larger image)

There is no basis for the governor’s claim that adolescent experimentation with e-cigarettes is resulting in higher smoking rates among teens. As such, limiting the options that adults have in the consumer marketplace is clearly an attempt to generate national headlines in the name of a fake “public health emergency" without regard for the law, context for the use of other products, or public health consequences. 

Jacob Sullum at Reason notes, “Whitmer's e-cigarette ban rests on a breathtakingly broad reading of her authority to make emergency rules in the name of ‘public health,’ however she defines it.”

Even if the Republican-led legislature in Michigan fails to intervene, it is not likely that businesses or consumers will sit idly by as prohibition comes to pass.

The Vapor Technology Association responded to the announcement by saying that it “will evaluate every option at its disposal, including litigation, to prevent implementation of this ban. The Governor’s unprecedented misstep will force a mass exodus of products from the market and will result in what the Food & Drug Administration (FDA) itself has described as “a public health crisis” as a result.” VTA estimates that more than 1,200 jobs are and $51 million in state and local tax revenue is on the line with this decision.

The American Vaping Association responded by saying, "These businesses and their customers will not go down without a fight. We look forward to supporting the lawsuits that now appear necessary to protect the right of adults to access these harm reduction products."

Reports suggest that once finalized, the rule will provide retailers 30 days to clear out their inventory of flavored vapor products and will remain in effect for six months before subsequent regulatory and legislative actions are required.  

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ATR Leads Coalition Urging President Trump to Halt the FDA's Regulatory Assault on E-Cigarettes

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Posted by Paul Blair on Monday, February 4th, 2019, 12:30 AM PERMALINK

Today, Americans for Reform President Grover Norquist led a coalition of free market, limited government, and conservative organizations calling on President Donald Trump to halt the Food and Drug Administration's aggressive regulatory assault on businesses who sell electronic cigarettes and vapor products in the United States. In recent months, FDA Commissioner Scott Gottlieb has acted in a manner inconsistent with the president's regulatory agenda, pressuring manufacturers to remove products from store shelves, suggesting new rules that would ban products currently on the market, and failing to act on pending product applications of innovative alternatives to cigarettes. Even worse, he's promised to go further.

As the letter explains:

"FDA Commissioner Scott Gottlieb’s effort to curb the $6.6 billion electronic cigarette industry and an even larger reduced risk tobacco alternatives market is inconsistent with your clearly articulated deregulatory objectives and will destroy jobs, limit consumer freedoms, and harm public health."

From the 2016 campaign to President Trump's first set of executive orders, deregulation has been a top priority for this administration. That agenda has had a positive impact on taxpayers and the conomy. 

"Your leadership, Orders, and deregulatory efforts have led to historic and important relief for the American people, with over $33 billion in savings alone through October of last year. Across every department and agency, your administration has not only identified harmful regulations but worked to untangle and repeal them, freeing consumers and businesses from the grip of government overreach. One glaring exception has been the Food and Drug Administration." 

President Trump's Executive Order 137771 not only directed agencies to eliminate two prior regulations for the creation of any new one, but it directed the Office of Management and Budget to create caps on and estimates for the cost of new rules imposed by agencies, like the FDA. For that reason, we suggest to the president:

"Consistent with your Executive Orders, an economic cost benefit analysis must be conducted that examines pending FDA guidance and potential new regulations with regards to this innovative industry."

Without an analysis on the economic impact of pressuring businesses to remove products from the retail distrubtion chain or failing to provide clarity on the government approval pathway for new products, FDA Commissioner Scott Gottlieb's actions will be inconsistent with the president's Executive Order, pro-jobs, and economic growth agenda. 

The growing body of scientific evidence suggests that e-cigarettes are at least 95% less harmful than traditional combustible cigarettes. Even further, a new study by the New England Journal of Medicine which found that e-cigarettes are twice as effective at getting smokers to quit as government-approved smoking cessation products like the nicotine patch. Given the high cost of cigarette use on public health expenditures across the United States, these products present adults aged 18 and over with real and increasingly effective choices that will save taxpayers billions of dollars and potentially save millions of lives. 

All of this comes at a cost of no longer being a leader on public health and missing out on investments in our economy. 

"Private sector initiative and sound public policy should not be held hostage by prohibitionist impulses. The FDA’s current efforts and attitude towards the e-cigarette industry make America a less appealing place to invest and do business. Countries around the world, including many throughout Europe have embraced this industry, encouraging doctors and medical professionals to recommend it to patients who smoke. Simply put, we are not a public health leader on the issue of utilizing the free market and innovation for tobacco harm reduction."

This broad coalition of limited government, free market, conservative, and consumer choice organizations is asking the president to pump the brakes on the FDA's new and pending regulatory efforts against an industry that is helping American smokers quit. 

A PDF of the letter and its signers can be found here. 

Photo Credit: Gage Skidmore

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Legal Victory for Vapers in Pennsylvania

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Posted by Daniel Silverman on Tuesday, July 10th, 2018, 2:50 PM PERMALINK

Vapers in Pennsylvania won a small, but important victory last week at the Pennsylvania Commonwealth Court. Since 2016, Pennsylvania has levied a 40% tax on electronic cigarettes and vapor products. East Coast Vapor, a Pennsylvanian vape shop, brought the tax to trial on the grounds that most vaping products lack tobacco, the defined product subject to the excise tax.

Judge Renee Cohn Jubelirer, who wrote the opinion, found that while nicotine and vaping liquids are subject to the tax, the component parts such as devices should not be. For consumers and businesses, this distinction is important. According to the court, this distinction adds up to a lot of over-collected tax revenue. For East Coast Vapor, the plaintiff, it was $28,000 in over-collected taxes on products consumers are using to quit smoking traditional cigarettes. Moreover, the decision allows users to buy parts separately and assemble the product themselves to avoid paying the onerous and unnecessary tax. Vapor products can be assembled by consumers and sold in many parts, including a cartridge for the liquid, batteries, etc.

Unfortunately for vapers, the presiding panel of judges decided that the tax still continues apply to many vape products. Judge Jubelirer concluded that the nicotine found in vaping products generally comes from tobacco. In a misguided assessment about vaping, she found that the tax intends to discourage addictive smoking habits for public health benefits and noted that the state has a legitimate authority to tax vaping products for causing addiction similar to smoking. Perhaps ignored was the fact that while nicotine may be addictive, vapor products deliver it without 95% of the risk of cigarettes.

Jubelirer noted that if self-assemblage becomes a measure to avoid the tax, the Pennsylvania Revenue Department could lobby Pennsylvanian lawmakers to pass a law that taxes individual parts as well. Until then, however, vapers should enjoy this partial, but significant win.

Photo Credit: Wikimedia

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Coalition Urges Congress to Rein in FDA Overreach as Part of FY18 Spending Bill

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Posted by Paul Blair on Monday, March 5th, 2018, 11:22 AM PERMALINK

Today, Americans for Tax Reform and a coalition of center-right public policy organizations and think tanks sent a letter to Congressional leadership and the chairmen of the House and Senate Appropriations Committees urging them to provide regulatory relief to thousands of small businesses that sell and millions of adult consumers that use vapor products in the United States. The Obama-era "Deeming Rule" stands to cripple a growing industry unless Congress acts to make a small staturoy change to the Tobacco Control Act for new products subject to the oversight given to the Food and Drug Administration by Congress in 2009. Inaction would not only strike a blow to innovation, but to public health as well. 

Below is a letter, which can also be read here

We, the undersigned organizations, urge you to provide regulatory relief from the Food and Drug Administration’s May 2016 “Deeming Rule” as part of the final FY18 omnibus appropriations package. Without a modernization of a provision of the Family Smoking Prevention and Tobacco Control Act, the Deeming Rule will kill tens of thousands of jobs in an industry that is helping many American adult smokers transition to lower risk alternatives to combustible to cigarettes.

Language and legislation sponsored by Congressmen Tom Cole (R-Okla.) and Sanford Bishop (D-Ga.) modernizes the “predicate date” for newly deemed tobacco products, providing regulatory certainty for small businesses against an onerous and retroactive pre-approval process imposed by the 2016 Rule. The Cole-Bishop Amendment to the current FY18 Agriculture Bill would provide additional substantive protections for adult consumers without preventing the FDA from imposing more appropriate regulations for the product category in the future.

Congressional action is necessary to prevent the loss of tens of thousands of jobs created in recent years. Most of these jobs are the result of domestic manufacturing and new retailers that are providing smokers with potentially effective smoking cessation and/or harm reduction choices that were not available ten years ago.

The Deeming Rule requires new products that did not exist on or before February 15, 2007 – the predicate date – to undergo a burdensome pre-market review process that achieves little in the way of protecting public health at a very high cost. The FDA’s own estimates found that the cost of completing and submitting the required Pre- Market Tobacco Application (PMTA) would exceed $300,000 per product and take at least 500 hours of time per application. At present, the deadline for the submission of PMTAs for each product manufactured in the United States is August 8, 2022.

When FDA Commissioner Scott Gottlieb extended the deadlines for the submission of PMTAs last year, he explained that it was done in part “to allow the FDA to encourage innovation that has the potential to make a notable public health difference—and to inform future policies and efforts that will protect kids and help smokers quit cigarettes.” Gottlieb has also argued that “there should be reduced harm products available to consumers to transition them off of combustible cigarettes,” consistent with the international consensus that vapor products are significantly less harmful than cigarettes. Without a statutory change to TCA by Congress, however, countless smoking cessation products currently on the market will be illegal in 2022. The ball is in Congress’s court and further inaction only stands to harm public health.

The onerous PMTA process required of every single vapor product on the market today was one that every single manufacturer of cigarettes in the U.S. avoided when the TCA was signed into law. Even if businesses could afford this investment, however, the process is designed to end in failure. Many small businesses produce hundreds of these products and would be forced to close their doors as a result of this retroactive federal rule.

The Cole-Bishop Amendment would not weaken the TCA or the ability of the FDA to impose additional product standards or regulations on new products in the future. In fact, the FDA is already moving forward on additional rulemaking for newly deemed products and this amendment would make the agency’s new regulatory objectives, which include preventing youth initiation, attainable. That is precisely why the efforts are bipartisan, because there is recognition that while regulations that protect consumers are important, the Rule imposed burdens that neither protect consumers, nor acknowledge that the consequence will be the new industry’s demise.

The millions of adult consumers who currently rely on these products as less harmful alternatives to smoking need your help today. The inclusion of the Cole-Bishop Amendment, as passed by the House Appropriations Committee, will provide significant regulatory certainty to tens of thousands of small businesses in the United States. We encourage Congress to adopt the language into the final FY18 omnibus budget.

Photo Credit: Flickr

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ATR Urges Utah Legislators to Reject Punitive Tax on Vapor Products

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Posted by Tyler Tate on Monday, February 26th, 2018, 10:16 AM PERMALINK

Recently, Utah Rep. Paul Ray introduced legislation (House Bill 88) to impose a whopping 86% excise tax on tobacco –free electronic cigarettes and vapor products. The tax, which was lowered to 29% in committee, serves as a harsh penalty on an estimated 110,000 Utahans who use e-cigarettes as a means for quitting or reducing their use of cigarettes.

The tax push comes at a time when the international consensus is that e-cigarettes are at least 95% less harmful than traditional combustible cigarettes. Unlike traditional cigarettes, e-cigarettes are free from tobacco, tar, and other carcinogens that make cigarettes harmful.

Over the past decade, e-cigarettes have emerged as an innovative and effective market solution that empowers smokers to quit tobacco use by transitioning towards a significantly less harmful alternative. Notably, this is a goal public health advocates have failed to achieve for decades.

A punitive excise tax on these life-saving products threatens to put them out of the reach of those who need them most. Lower and middle-income consumers compose the overwhelming majority of smokers, and many spend up to 25% of their income on tobacco. Imposing a regressive and steep excise tax on e-cigarettes directly hinders the ability of low and middle income consumers to afford to try a safer alternative to smoking tobacco.

Proponents argue these attempts to tax e-cigarettes are based on increasing public health, however, the real motivation is to preserve the massive windfall from exorbitant tobacco excise taxes. Since 1998, more than $500 billion has been transferred from consumers and businesses to the government from tobacco taxes and the federal Master Settlement Agreement with tobacco companies.

As consumers continue to switch to tobacco-free products, politicians have scrambled to replace revenues from tobacco taxes with e-cigarette taxes. Rather than pursue damaging tax hikes on life saving products, legislators should allow the free market to empower individuals to better their health.

Representative Paul Rey's attempt to hike taxes on 110,000 Utahans in 2018 comes as no surprise, considering he has pushed this tax every year for the last several years. Rep. Ray has also declined to sign the Taxpayer Protection Pledge, a written commitment to voters to oppose tax hikes.  

ATR strongly urges Utah legislators to protect Utah e-cigarette consumers and public health by rejecting House Bill 88. ATR’s letter to the Utah Taxation & Revenue Committee can be found here.

Photo Credit: Wikimedia Commons

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Podcast with IWF on Vaping and the Rugulatory Assault its Consumers Face

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Posted by Paul Blair on Monday, June 19th, 2017, 1:28 PM PERMALINK

In a recent podcast with Julie Gunlock of the Independent Women's Forum, Americans for Tax Reform's Paul Blair discussed the politics and policies surrounding the government's regulatory war against vapor products. What exactly is an electronic cigarette and what is vaping? Topics covered include a conversation about tobacco harm reduction and the role that innovation is playing in the tobacco product space that may help smokers transition to less harmful alternatives. 

Learn more about ATR's work in vapor issues at www.stopvapetaxes.org and feel free to sign up for Paul's monthly newsletter Vapor News and Views

Photo Credit: Vaping360.com

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State Overspending May Be A Significant Problem for Vapers in 2017

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Posted by Paul Blair on Wednesday, January 4th, 2017, 8:09 AM PERMALINK

As the 2017 legislative session kicks off in states across the country, three-fifths of states face overspending problems that will force serious discussions about currently collected tax revenue and future spending levels. More commonly but incorrectly referred to as budget shortfalls, states across the country face a conflict between anticipated revenue levels and out of control budget growth. It should come as no surprise to consumers of vapor products that this presents the threat of new product taxation in states where sin taxes have not yet been imposed.

Electronic cigarettes and vapor products are used by millions of consumers in the United States as a means to quit smoking combustible, or traditional cigarettes. The mounting evidence suggests that these smoking cessation products are at least 95 percent less harmful than cigarettes. That, however, hasn’t deterred lawmakers from targeting the growing multi-billion dollar industry and its consumers with tax hikes.

By sheer number of threats in recent years, vapor products have been the number one targets for tax hikes of any product or type of tax imposed by states, including cigarettes. And while lawmakers have succeeded at raising or phasing in more increases in state cigarette taxes (15 times since 2013), the imposition of entirely new sin taxes on vapor products in 6 states (plus once by voters) is a trend we at ATR will continue to monitor.

In each of the seven states that will impose an excise tax on vapor products in 2017, six came about as part of a tax package between 2012 and 2016 that also increased the state cigarette tax rate. The trend of considering tax increases on both products at the same time mirrors a national problem the vapor industry and its consumers face; the incorrect perception that the products are similar because vaping looks like smoking and thus a natural extension of a cigarette tax hike is an e-cigarette tax hike as well.

Related: Cigarettes: A Case Study in the Slow Rise of Excise Taxes  

Until the emergence of vapor products, cigarettes were the number one targets of tax hikes in the states. Between 2000 and 2016, 48 states and the District of Columbia passed 135 state cigarette tax increases, five times the number of tax hikes passed on liquor. 

Below is a summary of legislative tax changes imposed last year alone. As you can see, state tobacco tax hikes represent the second largest type of tax hike from FY17. 

Cigarettes are a popular scapegoat for overspending and shortfalls because the taxes can bring in somewhat significant revenue quickly without much opposition from consumers, even if it the money may be short-lived, cause budget volatility, lead to black markets, and punitively punish the poor. Regardless, cigarettes remain a top target for tax-hungry politicians.

In an era (post-2010 GOP gains across the country) of opposition to broad-based tax increases (a win for most taxpayers), sin taxes are an easy target for politicians in tough economic times who wish to raise as much money as possible from as few voters opposed. Though misguided, it’s the reality. As such, with more than half of U.S. states facing overspending problems (shortfalls), 2017 may be a tough year for lawmakers, “sinful” product consumers, and small businesses across numerous industries.

To preview the states where new vapor product taxes may be a real risk, I’ve compared the states with budget shortfalls (MultiState rundown here) to those that have passed a cigarette tax increase in recent years. In most cases, states that have passed a cigarette tax in the last four years are unlikely to do so again this year and new standalone vapor taxes will be rare, though possible.

Overspending problems aren’t the only things that cause tax hikes; some politicians are simply addicted to your money. As such, I’ve also included a number of states where budget discussions and the political climate lend itself to a real threat that a vapor product tax may be sent to the governor’s desk regardless of a stable budget outlook.

Click here for a larger version of the map. 

States with a defined overspending problem in 2017 where cigarette taxes have not been raised in the last four years (2012-2016), and the projected budget gap:

  • Alaska: $4 billion;
  • Colorado: $119 million;
  • Delaware: $350 million;
  • Illinois: greater than $10 billion;
  • Indiana: $378 million;
  • Iowa: $132 million;
  • Maryland: greater than $175 million;
  • Missouri: greater than $200 million;
  • Nebraska: nearly $1 billion;
  • New Mexico: $69 million;
  • New York: $689 million;
  • North Dakota: $310 million;
  • Oklahoma: $868 million;
  • Virginia: $861 million;
  • Washington: $474 million;
  • Wisconsin: $693 million;
  • Wyoming: $156 million.

 

States with an undefined but possible shortfall and no recent cigarette tax hike:

  • Montana – governor has already called for a tobacco tax hike;
  • South Dakota;
  • Texas: lackluster forecast. 

 

States with a budget shortfall, cigarette tax hike in last four years, and possible vapor tax:

  • Alabama: greater than $40 million;
  • Connecticut: greater than $1.3 billion;
  • Massachusetts: nearly $300 million;
  • Oregon: $1.7 billion;
  • Rhode Island: $112 million;
  • Vermont: greater than $40 million.

 

States without a budget shortfall but possible vapor tax:

  • Ohio – vapor tax proposed by current governor in prior years;
  • Hawaii – the state with more tobacco bills annually than anywhere else.

 

States without a shortfall or reason to believe there will be a successful effort to impose a vapor tax in 2017 include Arizona, Arkansas, Florida, Georgia, Idaho, Kentucky, Maine, Michigan, Nevada, New Hampshire, New Jersey, South Carolina, Tennessee, Utah.

Summary, in case you skipped to the bottom: A lot of states have overspent tax dollars in recent years, quickly forgetting (or neglecting) the impact of slow recession-era growth on budgets and state governments. Unfortunately for consumers, targeted excise taxes on products like cigarettes and a misconception that vaping is smoking by another name has put consumers of life-saving products like electronic cigarettes in the crosshairs of the ever-present threat of tax increases at the state level.

Americans for Tax Reform opposes all tax increases as a matter of principle and will continue to monitor and fight efforts to subject life-saving products like vapor products to new and higher taxes.

To keep up to date on all of Americans for Tax Reform’s work on vapor issues at the local, state, and federal level, subscribe to our newsletter, Vapor News and Views, by clicking here

Publisher's note: The assessments made in this post are based predominantly on the fiscal conditions of states in 2017. It is quite possible that additional states, like Utah and Nevada, will consider proposals to tax vapor products despite a nonexistent need to balance the state budget beyond projected tax collections and spending rates. It is also possible that states labeled possible threats will not consider excise taxes on vapor products as smarter alternatives such as spending restraint is considered instead. This map and post simply serves as a suggestion that where tax hikes are considered, history can be a strong but not guaranteed indicator of future outcomes.  

If you’re interested in more information on 2017 state budget conditions, read the National Association of State Budget Officers most recent “Fiscal Survey of States.”

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Show Notes: What the Election Results Mean for American Taxpayers

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Posted by Alec DiFruscia on Monday, November 14th, 2016, 3:41 PM PERMALINK

On Election Day, voters made a choice: they chose freedom. Republicans across the country swept into office. The GOP now holds the Presidency, Senate, House, 33 governorships, and 2/3 of State Legislatures. Congress can finally repeal Obamacare and pass tax reform, two items that Speaker Paul Ryan, Sen. Mitch McConnell and President Trump all agree on.

The threats to the Second Amendment, the sharing economy, the Supreme Court, and vaping are gone, and now it’s time for a bold conservative agenda for the next four years. 

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