The nicotine tax in the U.S. Build Back Better Plan bill will negatively affect public health and hurt lower- and middle-class Americans, according to Guy Bentley, director of consumer freedom research at the Reason Foundation.
The current version of ever-changing proposal would introduce a new tax on e-cigarettes and other smoking alternatives, which research suggests are dramatically safer options for smokers.
A 6 milligram nicotine/30 milliliter bottle of e-liquid, for example, would be taxed at a rate of $5.01 under the proposal. A typical pack of e-liquid pods would be taxed at $4.59. The federal tax on cigarettes is $1.01 per pack. Thus, e-cigarettes would be taxed more than regular cigarettes, and dramatically more so in states that already levy their own high e-cigarette taxes.
Writing on the Reason Foundation’s website, Bentley cites Michael Pesko of Georgia State University, who estimates the new tax on nicotine alternatives would cause 2.7 million more daily adult smokers, 530,000 more teen smokers and 29,000 more prenatal smokers. (Pesko recently shared some of his concerns in a letter to Congress).
This is because e-cigarettes are substitutes, not complements to combustible cigarettes, and millions of American ex-smokers have used these products to get off smoking traditional cigarettes.
Bentley says the tax is also highly regressive and would violate President Biden’s campaign promise not to raise taxes on people earning less than $400,000 a year. According to a recent Gallup poll, Americans with an annual household income of less than $40,000 are significantly more likely to vape than higher-income groups.
“With more than 15 million adult vapers now in America, many of whom attribute their ability to quit or reduce smoking traditional cigarettes to their use of e-cigarettes, it’s baffling House Democrats would consider targeting this group with a huge tax increase that could push many of them back to smoking and worsen public health,” wrote Bentley.