Sacramento — There are so many reasons to oppose the Democrats’ $1.9 trillion Build Back Better legislation, not the least of which centers on the bill’s asinine name. Forget about the moniker’s iffy phrasing. We can’t build a better society by running up debt, triggering even more inflation, building bigger bureaucracies and handing out freebies to more Americans.
Despite all the substantive flaws, one small matter is posing a bigger challenge for supporters than expected. It involves a proposed tax on e-cigarettes and related vaping products. As Reason explained, Sen. Catherine Cortez Masto, D-Nev., won’t support a tax that hurts lower-income people. She joins moderate Democrats Joe Manchin of West Virginia and Kyrsten Sinema of Arizona as current opponents.
Senate Majority Leader Chuck Schumer, D-N.Y., is hoping to secure passage by Christmas and he’s not going to move forward with insufficient Democratic votes. Schumer only needs a simple majority, but these three defectors endanger a slim majority. We could therefore expect negotiations over the vaping tax — one that might jump-start a long-needed debate about why it’s such a harmful idea.
The new version of the legislation imposes a tax that will raise the retail price of e-cigarettes by around 25 percent, according to reports. The earlier version had also included a comparable tax hike on cigarettes, but lawmakers removed that provision. At least the politics of the dispute are entertaining.
Progressives are zinging the Biden administration for softening the tax burden on billionaires and funding the shortfall with a regressive tax on vaping — something that violates the president’s vow not to raise taxes on people earning less than $400,000. But raising taxes on an effective tobacco-cessation alternative isn’t funny given its likely impact on people’s health.
The most widely cited statistic, from the British public-health agency, is that vaping (although not without its risks) is 95 percent safer than cigarette smoking. American health officials are intent on banning vaping via state and local bans on flavored tobacco, and they offer no serious rebuttal to Public Health England’s research.
“The problem with the tax is simple,” wrote Kenneth Warner in the Washington Post. “Economic studies demonstrate that cigarettes and e-cigarettes are substitutes for each other. If cigarettes become more costly relative to e-cigarettes, some cigarette smokers will switch to e-cigarettes. Conversely, if e-cigarette prices rise relative to cigarette prices — as they will under the legislation’s tax provision — some people will smoke cigarettes who would otherwise have used e-cigarettes.”
Warner is professor emeritus of the University of Michigan’s School of Public Health. Other credentialed academics are sounding the alarm on the Biden vaping-tax plan. In a letter this month to Congress, Georgia State University professor Michael Pesko reported on the results of his National Institutes of Health-funded e-cigarette research.
He found that “increasing e-cigarette taxes to parity with the cigarette tax rate will sizably increase cigarette use across teens, adults and pregnant women, compared to taxing tobacco products differentially in proportion to their health risk.” The unintended consequence of these taxes on vape products “is to increase cigarette use.”
Public-health zealots who target e-cigarettes argue that they are trying to keep them out of the hands of teens — and that the nation is experiencing a teen vaping epidemic. The latter point is debatable, but logically, it’s always struck me as bizarre to ban an adult-only product to keep it out of the hands of those who are not legally allowed to use it. Practically speaking, however, the policy does not lead to the intended result.
“Simulating the current bill’s e-cigarette tax on teen tobacco use indicates that this policy would reduce teen e-cigarette use by 2.7 percentage points, but that two in three teens who do not use e-cigarettes due to the tax would smoke cigarettes instead,” Pesko added. “This would result in approximately a half million extra teenage smokers overall.”
Beyond teens, Pesko found that the tax “would raise the number of daily adult cigarette smokers by 2.5 million nationally” and that “for every e-cigarette pod eliminated by an e-cigarette tax, more than 5.5 extra packs of cigarettes are sold instead.” In their zeal to take on vaping, Democrats are helping keep the combustible-cigarette industry alive.
We shouldn’t be surprised by a counterproductive provision in a massive spending bill filled with counterproductive policies, but this tax could actually cost lives. Democrats like to prattle about following the science, so perhaps the bill’s resistance by Cortez Masto, Manchin, and Sinema might at least force the administration to read some of the scientific studies.
Steven Greenhut is Western region director for the R Street Institute. Write to him at firstname.lastname@example.org.