A Federal Vaping Tax Is Bad Policy and Bad Politics
It remains far from certain that Democrats will be able to cobble together the necessary 50 votes to pass President Joe Biden’s “Build Back Better” plan through the Senate.
Here’s one thing that is more certain: A new federal tax on vaping that’s included in the latest version of the proposal is only making the vote counting more difficult.
Joining Sens. Joe Manchin (D–W.Va.) and Kyrsten Sinema (D–Ariz.) as crucial holdout votes on the package is Sen. Catherine Cortez Masto (D–Nev.), who told The Wall Street Journal this week that she won’t vote for the nicotine tax. “I’m very clear. I don’t support any type of tax, a regressive tax on the very people that we’re trying to cut costs, cut taxes on,” she told the Journal.
The proposed vaping tax, as Reason’s Christian Britschgi explained last week, would slap a new excise tax on any nicotine product “that has been extracted, concentrated, or synthesized” (i.e., nicotine-containing vaping liquid) at the rate of $50.33 per 1,810 milligrams of nicotine. That means a four-pack of Juul pods would increase by $4.62, and the tax would add $20.16 to the retail price of a 60-milliliter bottle of 12 mg/mL e-liquid, according to Vaping360, a trade publication. The new federal tax would also hike state taxes in several places, since it would be applied to the wholesale price and state taxes are applied as a percentage of retail prices—which would necessarily increase due to the new federal tax.
The White House says the vaping tax doesn’t violate Biden’s pledge that families earning less than $400,000 would not face tax increases because “the proposed tax increase doe
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