Share on facebook
Share on twitter
Share on linkedin

ICYMI: SacBee: A cost to banning flavored tobacco

Article linked here: WHAT’S GOING ON WITH VAPING?

A California bill that would ban the sale of flavored tobacco products is set to go before the powerful Senate Appropriations Committee this Thursday. Currently, the bill is sitting in that committee’s suspense file.

The bill has been championed by author, Sen. Jerry Hill, D-San Mateo, who said in a May statement that “1,300 people die every day due to tobacco related illnesses. There is no reason the most deadly product on earth needs to have a candy flavor.”

It has lined up nearly 40 co-authors and is co-sponsored by Lt. Gov. Eleni Kounalakis, the American Cancer Society, the American Heart Association, the American Lung Association, the Campaign for Tobacco-Free Kids (which has been running ads supporting lawmakers who back the bill) and Common Sense.

However, one thing lawmakers on the Appropriations Committee will have to consider is the potential loss of hundreds of millions of dollars in state revenue should the ban go into effect.

An Appropriations Committee bill analysis found that California would lose an estimated $407 million in excise and sales tax revenue over the next two fiscal years, according to the California Department of Tax and Fee Administration.

That’s not an insignificant amount of money, especially when lawmakers have to tackle a $54 billion deficit.

Still, the state could recoup some of that money in the form of a new tax proposed in Gov. Gavin Newsom’s budget.

Newsom has proposed a new vaping tax of $2 for every 40 milligrams of nicotine content, which is equivalent to the tax on a pack of cigarettes. That tax would go into effect in January 2021, and would raise $33 million in the 2020-2021 fiscal year, according to Newsom’s May Revision budget summary.

However, not everybody is a fan of the tax.

The Tax Foundation warns that a vaping tax would have a negative effect of smoking cessation efforts; many people vape as part of an effort to get off of cigarettes. In addition, a tax could create incentive for illicit activities.

“Cigarettes are already being smuggled into and around the country in large quantities, and nicotine-containing liquid is coming into the U.S. from questionable sources,” writes the Tax Foundation’s Ulrik Boesen. “Black market liquids and cigarettes have the problem of being extremely unsafe and cost governments billions in lost taxes.”

More to explore