In the midst of the ongoing Pennsylvania budget battle, vapers in the commonwealth are losing faith in the ability of their elected officials to alleviate the draconian tax placed on vape products in 2016, which has led to the closure of over one-quarter of all the vape shops in the state.
It’s been over a year since the General Assembly approved a 40 percent floor tax on electronic nicotine delivery systems (ENDS), commonly referred to as e-cigarettes or “vaping devices.” Since the tax was implemented, 100 of the state’s estimated 400 vape shops have closed their doors, according to the Vapor Technology Association.
The good news: Pennsylvania supposedly brought in over $13 million with the tax. The bad news: an estimated 100 other vapes shops may be forced to close if the tax is not repealed. It doesn’t take an economist to understand this revenue grab is literally taxing the ENDS community to death. In fact, at this rate, there won’t be anything left for lawmakers to tax in just a few years.
After the tax’s destructive nature became evident, some seemingly responsible members of the General Assembly argued in favor of repealing the vape tax, but now it looks like they may have just been blowing smoke. In 2016 and 2017, state Rep. Jeff Wheeland (R-Williamsport) and state Sen. Camera Bartolotta (R-Carroll Township) “stepped up” by introducing bills to transform the tax into a 5-cents-per-milliliter levy on e-liquids, but those bills have yet to make it out of committee.
Research conducted on ENDS has consistently shown they have tremendous potential for providing significant health benefits for communities when they are used as an alternative to tobacco cigarettes. A study published in October in Tobacco Control found replacing cigarettes with ENDS would save lives.
In September, NHS Health Scotland, along with other public health groups, issued a statement urging tobacco cigarette users switch to ENDS. In 2015, Public Health England declared ENDS 95 percent less harmful than tobacco cigarettes.
In Pennsylvania, the health implications of ENDS appear to have no value; lawmakers’ real motive is generating revenue by taxing a new product most consumers know very little about. The implementation of a fiscally responsible and health-conscience approach to ENDS, including the promotion of their use, could alleviate some areas in the Pennsylvania budget.
Policymakers are going after vapers and vaping businesses to raise revenue and score political points with certain special-interest groups, but they are ignoring how much cash ENDS could save Pennsylvanians. In a 2015 State Budget Solutions study, J. Scott Moody found if ENDS had been adopted in place of tobacco cigarettes, Medicaid could have saved as much as $48 billion in 2012.
Not only would promoting ENDS help Pennsylvania’s budget by cutting down smoking-related health care costs, it would also save lives, which means there would be more healthy people working and paying taxes.
Unless this burdensome tax is repealed or replaced with a much smaller tax, the vaping industry in Pennsylvania may not survive the next decade.
Lindsey Stroud ([email protected]) is a state government relations manager at The Heartland Institute.