U.S. Senate Democratic Whip Dick Durbin, U.S. Senator Ron Wyden, U.S. Representative Raja Krishnamoothi, and several others today (March 4) introduced the End Tobacco Loopholes Act, legislation that would “lower tobacco use and reduce healthcare spending” by increasing the taxes on tobacco products. The legislation would establish a federal tax on e-cigarettes, update the federal cigarette tax rate, and harmonize the tax rate across tobacco products.
“Big Tobacco’s deadly profit scheme relies on addicting children,” Durbin said. “Our most effective strategy to reduce smoking and prevent a new generation from becoming addicted is to price these dangerous tobacco products out of the reach of children. But federal law has not been updated in 16 years, creating loopholes that Big Tobacco has used to hook kids. The End Tobacco Loopholes Act would help reduce tobacco and e-cigarette use, save billions in healthcare costs, and improve the health of children for generations to come.”
According to Durbin’s website, the legislation would “close tax code loopholes for tobacco products by increasing the federal tax rate on cigarettes, pegging it to inflation to ensure it remains an effective public health tool, and setting the federal tax rate for all other tobacco products at this same level.” It would also “follow the lead of 30 states and Washington, D.C., that have set their own state taxes, by setting a federal tax on these vaping products. The legislation also closes numerous tax and regulatory loopholes that the tobacco industry has exploited for large cigars, smokeless tobacco, and pipe tobacco by shifting production and sale schemes to avoid taxes and oversight, resulting in nearly $4 billion in lost federal revenue between 2009 and 2018.”
Durbin added that “large cigars, smokeless tobacco, and pipe tobacco remain dramatically undertaxed compared to cigarettes, at a time when their use—especially among youth—is trending at a comparable rate to cigarettes.”
