Industry Rails VS Kasich Plan To Boost Cigs Tax
Gov. John Kasich made it clear at a speech in December that an increase in the tax on tobacco products was going to be part of his budget.
"Why should taxes on tobacco not be higher to pay for reductions in the income tax? I'll tell you why - lobbyists - that's why."
The budget includes a dollar per pack increase in the tax on cigarettes, and would raise taxes on other tobacco products. And the language sounds pretty mundane when budget director Tim Keen explains it.
"The proposal is generally to equalize the tax treatment of cigarette, tobacco and related products. And so we're making a change to the cigarette tax itself, to other tobacco products, and introducing taxation to the vapor products as well - equalizing the rate across the products."
But that translates into real money at the hundreds of electronic cigarette or vapor stores that have been popping up throughout strip centers and in malls all over Ohio. Those stores sell e-cigarettes and the liquids that are used in them. Some estimate a 30mL bottle of e-liquid is equivalent a carton of cigarettes, but it could be more or less depending on the user. Steve Greenberg runs the Vapor Shop east of downtown Columbus, and he says the equalization, as Keen put it, would hit him hard.
"It would take the price of a $10 bottle to around $33."
Greenberg doesn't sell the electronic cigarettes distributed by the big tobacco companies which have been buying up e-cigarette makers, but sells products made by smaller manufacturers. Greg Conley is with the American Vaping Association, which is supported by stores like Greenberg's and other businesses in the so-called vapor market. Conley was one of the first to complain about Kasich's budget when it was unveiled last month. He said his industry was prepared for the governor to raise taxes on cigarettes by 60% and then equalize that tax with e-cigarettes, but Conley says this is worse than he expected.
"It's complete insanity to tax these products even more than traditional cigarettes. It's appalling, and it's behavior that will lead to more death and disease and less smokers being able to quit smoking."
Both Conley and Greenberg stress that over and over - that e-cigarettes help smokers kick the habit. But that's a problematic claim for some public health experts. Dr. William Cotton is a pediatrician at Nationwide Children's Hospital and the advocacy chair of the Ohio chapter of the American Academy of Pediatrics.
"They can claim that they help people stop smoking, but they've never been tested. So it's not a proven way to stop smoking. No one's ever done any studies about it. The FDA hasn't approved them to be a smoking cessation tool. And since the introduction of e-cigarettes, the use of tobacco has not gone down."
And while Cotton says e-cigarettes are probably not as dangerous as tobacco cigarettes, he says those who vape or use e-cigarettes with liquid nicotine are replacing one nicotine addiction with another. But back at the Vapor Shop, Steve Greenberg says he's really worried about Gov. Kasich's proposed tax hike, and claims that if it goes through, many of the small vapor shops like his around Ohio will shut down.
"He's trying to pick on the companies that he thinks are the dredges of society, which we're not. In fact, it's just the opposite. It's sad that when people really don't understand a business, sometimes they'll tend to look down on it, and in fact our business is just the opposite. We're here to help people."
Polls have shown that raising taxes on tobacco products is ok with a majority of voters, state lawmakers have been reluctant. In his budget update last year, Kasich proposed a tobacco tax increase which included e-cigarettes. But the plan didn't get even a single hearing before the legislature, which is dominated by Kasich's fellow Republicans.