Tax Nicotine or Vaping Liquid?

Tax Nicotine or Vaping Liquid?

The U.S. House Committee on Ways & Means, by a 24-15 vote, has approved a tax on e-cig liquid by nicotine content, “$50.33 per 1,810 mg.” or $$27.81 per gram.

Senate Democrats have introduced similar legislation.

A tax could pass veruy quickly.

That nicotine tax goes along with what drug policy scholars say about taxing marijuana.  They’d like to tax by THC content, at least where practical.

Canada is already taxing by THC, for concentrates like vaping liquids and other processed products.  (Raw material, less practical to tax by THC, is still taxed by the gram, with potent flower taxed more than weaker trim.)

But tax policy folks on the left and right suggest taxing by total vaping liquid instead of just nicotine.  None of that liquid is good for you.  But hat’s a dramatic difference in the tax base.

From the Tax Policy Center on the left, click here.

From the Tax Foundation on the right: https://taxfoundation.org/tax-nicotine-products-quantity/

I like taxing THC where practical, in liquid, but I tend to side with the tax policy folks here.  Taxing by nicotine is harder to enforce, but mainly, we don’t know exactly what we’re mad at.  Without nicotine, though, or THC or some active agent, I think kids wouldn’t vape.  So this is a hard issue.

 

 

https://www.bloomberg.com/news/articles/2019-10-23/bill-to-tax-vaping-like-tobacco-products-clears-house-committee?cm_ven=ExactTarget&cm_cat=DD+10242019&cm_pla=All+Subscribers&cm_ite=https%3a%2f%2fwww.bloomberg.com%2fnews%2farticles%2f2019-10-23%2fbill-to-tax-vaping-like-tobacco-products-clears-house-committee&cm_lm=po@newrevenue.org&cm_ainfo=&&utm_source=%20urban_newsletters&&utm_medium=news-DD&&utm_term=TPC&&

 

https://www.taxpolicycenter.org/taxvox/michigan-lets-tax-not-ban-vape-products?cm_ven=ExactTarget&cm_cat=DD+10212019&cm_pla=All+Subscribers&cm_ite=https%3a%2f%2fwww.taxpolicycenter.org%2ftaxvox%2fmichigan-lets-tax-not-ban-vape-products&cm_lm=po@newrevenue.org&cm_ainfo=&&utm_source=%20urban_newsletters&&utm_medium=news-DD&&utm_term=TPC&&

 

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