State Ignores ‘Basic Economics’ To Push Crushing 75 Percent Vaping Tax

Steve Birr | Vice Reporter

Officials in Connecticut are on the cusp of passing a massive tax on electronic cigarettes that risks bankrupting the state’s entire vaping industry.

Democratic Gov. Dannel Malloy is pushing the Connecticut legislature to pass a budget compromise by the end of month that includes a proposed 75 percent wholesale tax on all vapor products. The tax is scheduled to take effect in January and vaping advocates fear that it will destroy the livelihoods of store owners. Gregory Conley, president of the American Vaping Association, says the tax “threatens to close approximately 80 small businesses” in the state.

Malloy says lawmakers need to act urgently to adopt the budget, which also raises the tax on cigarettes from $3.90 per pack to $4.35 per pack and hikes the tax on snuff from $1 per ounce to $3 per ounce.

Public health advocates worry the vaping tax will reverse progress for smokers in the state who have successfully quit with a vapor product. (RELATED: ‘Misleading’ Surgeon General Report On Vaping Battered As ‘Fiction’)

“This is basic economics. Price differences between substitutable goods shapes demand for those goods,” David Sweanor of the Center for Health Law, Policy and Ethics at the University of Ottawa told The Daily Caller News Foundation. “If we are talking about the impact of price differences between apples and oranges we are likely just explaining the concept to students. But when we are talking about a tax that reduces the economic incentive to switch from lethal cigarettes to massively less hazardous vaping products, we are talking about the loss of lives.”

Sweanor and co-authors Dr. Kenneth Warner of the University of Michigan and Dr. Frank Chaloupka of the University of Illinois argue in The New England Journal of Medicine that the tax code should be structured in a way that promotes the use of less hazardous options like e-cigarettes over traditional tobacco products.

The Connecticut tax proposal for vapor products nearly doubles the 40 percent wholesale tax in Pennsylvania, which is responsible for leveling the industry since implementation last October. The tax is pushing consumers out of state to buy their vaping products. Nicotine liquid that now costs nearly $10 in Pennsylvania is available in New Jersey for $4.99.

“As we saw in Pennsylvania, where a 40 percent wholesale tax led to the shuttering of nearly 150 stores, consumers will turn to out-of-state and internet sales when excise taxes are set too high,” Conley told TheDCNF. “Nearly doubling Pennsylvania’s ridiculous tax is a recipe for disaster. Even worse, this tax also threatens to reverse the progress that has already been made in reducing Connecticut’s smoking rate. It is absolutely critical that the Connecticut Legislature rejects Gov. Malloy’s new tax on vapor products.”

The tax appears to be designed to snuff out the vaping industry in Connecticut, likely motivated by unsubstantiated fears surrounding the products. Medical experts focused on harm reduction say misrepresentations of the health impacts of e-cigarettes, often driven by politic interests, damage overall public health and risk costing smokers lives.

A University of California study released July 26 showed that a record number of Americans are ditching cigarettes with the aid of vaping devices. The rate of Americans quitting smoking jumped from 4.5 percent between 2010 and 2011 to 5.6 percent between 2014 and 2015.

That means roughly 350,000 smokers gave up the habit between 2014 and 2015.

A study by researchers from the Georgetown University Lombardi Comprehensive Cancer Center released Aug. 31 reveals that vapers who use an e-cigarette on a regular basis vastly strengthen their chances of quitting over those who never try the device.

The results showed that smokers increase their chances to quit by 5 percent with each successive day they use a vaping device. The odds of successfully quitting rose by 59 percent for smokers who used an e-cigarette at least five days in a month. Those chances doubled for smokers who used a vaping device at least 20 days in a month.

A growing body of medical evidence shows that vaping is a much safer alternative to smoking. The U.S. Food and Drug Administration recently acknowledged the health benefits of e-cigarettes, and is now encouraging smokers to transition to vaping to reduce their health risks.

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