Posted on 11/14/2020 7:33:27 AM PST by Kaslin
Excise taxes, often referred to as a nuisance or sin taxes, are typically implemented to raise revenues and deter certain “unhealthy” behaviors. In 2014, state governments collected approximately $32 billion by taxing so-called sinful products and activities, including gambling, smoking, and alcohol.
As Clement Freud noted, “If you resolve to give up smoking, drinking, and loving, you don't actually live longer; it just seems longer.”
Several states recently held ballot initiatives to increase taxes on all nicotine products including vape products. Not shockingly, many of these referendums passed, even though e-cigarettes are used as harm reduction tools and have a positive impact for public health, as an option for people instead of combustible tobacco products.
For example, Colorado voters passed Proposition EE, the Tobacco and E-Cigarette Tax Increase for Health and Education Programs Measure on Election Day. This will lead to higher taxes on cigarettes and tobacco products, along with added taxation on vape products that contain nicotine.
Today, cigarettes are taxed at 84 cents per pack in Colorado. After implementation, the new tax will incrementally increase this tax on cigarettes to $2.64 per pack, in addition to hiking taxes on tobacco products.
Like Colorado, Oregon voters recently passed Measure 108, which will increase taxes by a whopping 65 percent on all tobacco and e-cigarette products. The measure, of course, was in the name of public health.
Unfortunately, these regressive taxes impact low income earners the most. A 2015 study from the Institute on Taxation and Economic Policy found that local excise taxes hit low income earners the hardest. The poorest 20 percent of society pays nearly 11 percent of their annual income on these types of taxes.
Most often, these measures do not achieve their primary goal, which is to reduce certain behaviors that those in power deem unhealthy. All too often, residents simply buy these products elsewhere.
This ultimately leading to a thriving black market for cigarettes and other tobacco and nicotine products. In the long run, small businesses are negatively impacted because they lose business and cut jobs.
Although politicians would never say it, these types of taxes are unsustainable and are typically used to subsidize out-of-control government spending.
Taxation is theft, but when taxing “sinful” products, the government will always argue that the tax is a “good public benefit,” even when it isn’t.
Sin taxes are social engineering on steroids, and it is un-American. Coloradans and Oregonians have a proud legacy of rugged individualism, predicated on the premise that they have the ability to make decisions for themselves. They are also capable of dealing with the consequences.
Because vaping is used as a viable method to quit smoking, it seems strange that regressive taxes on these products would even be up for discussion. Regular cigarettes contain up to 7,000 chemicals, whereas e-cigarettes expose one to far fewer, making it a healthier alternative.
A recent study published in the medical journal JAMA found that smokers who vaped used fewer cigarettes per day and were more than one and a half times as likely to quit completely.
If vaping can be used as a tool to kick worse habits, many should question the intent of policymakers in Colorado and Oregon to push these ballot initiatives forward. The unintended consequences of these policies will likely result in the opposite of the original stated intent.
Not only do these taxes potentially harm people who are trying to quit smoking, by hindering their ability to purchase vaping products, it also has detrimental effects on small businesses, as consumers will go elsewhere to shop.
These taxes will impact low income earners the most, as they are operating on smaller margins of income. Governments should stop discriminatory taxing and focus on putting tax dollars back into taxpayer’s pockets by cutting spending and balancing their budgets.
Christina Herrin (cherrin@heartland.org) is the government relations manager of Health Policy at The Heartland Institute, a non-partisan, free-market think tank headquartered in Arlington Heights, Illinois.
Emotional appeals.
There are excise taxes on automobiles, too. Are they sinful?
Excise taxes are about fund raising, pure and simple. The rest (discourages bad behavior, it’s for your own good) is justifying blather.
This calls attention to the entirety of our taxation and government spending systems. Every tax we pay is justified as being for the public benefit. In this case, these taxes are said to deter bad behaviors.
Gas taxes are supposed to be used to pay for maintenance of the roads we drive on.
With income taxes, various deductions, such as the home mortgage interest deduction, are implemented to encourage the public good of home ownership. Tax deductions for charitable contributions are supposed to encourage charitable giving. Property taxes in many places fund the school system.
We could go down the list of every tax, and every tax deduction or exemption, and will find that there were some stated reasons given at the time, to implement them.
There’s nothing “unfortunate” about it. That’s just the way it is. I don’t get this fixation among conservatives against “regressive” taxation. Regressive taxes like excise taxes, fuel taxes, sales taxes, etc. are often the only way to get even a single penny of tax revenue out of people who don’t pay income or payroll taxes and may even get income tax credits that give them cash refunds that exceed what they paid in income taxes.
Whether these excise taxes are a good idea or not is a legitimate question, but the “regressive” nature shouldn’t even be part of the conversation.
No, it’s just an excuse for politicians to grab more money.
“Do Excise Taxes Lead to Better Public Health Outcomes?”
Two problems here...both public health and outcomes need definitions. I hate to be laid out as the villain here, but isn’t health the responsibility of the patient? If so, why do they need so much money for something that isn’t their responsibility? People who don’t make the effort to prepare for things are a blight on our society and public funding to get them off the backs of the citizens is highway robbery.
There are those that give to charitable organizations to help people. Im one of them. But I can give to who I want, not who needs to impress for PR for some votes. But the government misuses these funds, and other funds being collected for other purposes, all the time. And it goes into pet projects or mishandled accounting for other needed, overlooked, underfunded mistakes by the same people that decided to back their stupidity with another lie to empty your pockets so it is harder for you to prepare for your own current and future problems.
A perfect example is the Emergency Relief Packages to go for backup for the pandemic. The emergency relief package passed provides $75 million each to the National Endowment for the Arts and The National Endowment for the Humanities. The Smithsonian Institution would receive $7.5 million for “salaries and expenses.” The John F. Kennedy Center For The Performing Arts would receive $25 million for “Operations and Maintenance.” And this is the practice, not the unusual. It’s called pork. And Pelosi and her daughter are on the boards of most of it.
In Washington State, we have one of the highest gasoline taxes in the country. The 18th Amendment in the Washington State Constitution restricts the money from fuel taxes to be used for “highway purposes,” like bridges, road repairs, or traffic signal management and it includes the Washington State Ferry System. Period.
These funds are not earmarked and are in a general fund to be poached for those programs that the locals are trying to fly. A lot of the funds are going into rapid transit and commuter trains to keep them afloat. It wasn’t until last year that we actually got a train to use in the south end of the state. And WSDOT has a $7B need that is not getting filled so they can operate.
Like I said....poaching.
rwood
Sure, if you’re the tax collector
Does the nicotine tax include nicotine gum used to help people quit smoking? It contains nicotine.
[There’s nothing “unfortunate” about it. That’s just the way it is. I don’t get this fixation among conservatives against “regressive” taxation. Regressive taxes like excise taxes, fuel taxes, sales taxes, etc. are often the only way to get even a single penny of tax revenue out of people who don’t pay income or payroll taxes and may even get income tax credits that give them cash refunds that exceed what they paid in income taxes.
Whether these excise taxes are a good idea or not is a legitimate question, but the “regressive” nature shouldn’t even be part of the conversation. ]
Do politicians harvesting taxes and living a life of luxury ever improve anything?
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