We're here to offer some good news for the holidays! The absurd federal nicotine tax on vape products that was part of the "Build Back Better" bill has been removed. The proposed nicotine tax would have taxed all vape products at 2.8 cents per mg of nicotine. This would have made vaping significantly more expensive than smoking traditional combustible cigarettes and many public health experts have stated that it would increase cigarette smoking rates across the country.
Major Pushback on Vape Nicotine Tax
US Senators recently received data from public health experts, economists, vape organizations, and small business owner organizations that helped explain why this tax would cause harm to public health and the economy as a whole. University of Michigan professor, Kenneth Warner, has been outspoken about the harm to public health that would be associated with this new federal tax. Warner, along with 14 former Presidents of the Society for Research on Nicotine and Tobacco, co-authored an article to Congress that highlighted the harm to public health that the war on vaping has caused. The article states "Our goal in this paper is to try to inject some sense of balance, to get public health organizations, the media and legislators to recognize that their appropriate but singular desire to keep e-cigarettes out of the hands of kids may actually be harming public health. Policies oriented exclusively toward protecting kids may be responsible for more adults smoking than would be if we had policies that also emphasized helping adults to quit with vaping, and frankly, if we had honest characterizations of the risks of vaping."
Warner also goes along to explain that the government and media continue to push the false narrative that vaping is more dangerous than smoking traditional cigarettes. The majority of smokers currently believe that vaping is as dangerous, or more dangerous, than smoking. He further states "Vaping is clearly not risk-free, but it is also substantially less dangerous than cigarette smoking. Inhaling combusted tobacco smoke, which includes over 7,000 chemicals, is what causes the disease and death associated with tobacco use."
Vape Nicotine Tax Would Increase Smoking
Many economic studies have shown that cigarettes and e-Cigarettes are economic substitutes. Therefore, a tax that would disproportionately tax vape products more than cigarettes would lead more consumers to smoke cigarettes. This would most likely increase the amount of deaths per year caused by smoking traditional combustible cigarettes. The current annual death rate caused by cigarettes in the United States is 480,000 people.
Economic Harm Caused by Vape Tax
Historically, smoking rates are higher among people with low annual household income than those with higher annual household incomes according to the CDC. This means that an aggressive vape tax would disproportionately affect lower household income individuals more than it would Americans that have a higher income. Essentially, an aggressive tax on nicotine would take money out of the pockets of Americans that live paycheck to paycheck which completely contradicts the current administration's promise to not raise taxes on individuals making less than $400,000 per year.
Furthermore, this infrastructure bill that is designed to stimulate the economy and the vape nicotine tax would do the complete opposite. According to a study performed by Dunham and Associates, the proposed federal vape tax would lead to a reduction of nearly 42,800 full-time equivalent jobs and the loss of $2.2 billion in wages and benefits.