May 21, 2020

Orange County Register: Tax hike on vaping is the wrong priority at the wrong time

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Compounding all of these problems is that the vaping tax hike would have the largest impact on those who can least afford it. The Institute on Taxation and Economic Policy (ITEP) notes in its “Guide to Fair State and Local Taxes” that excise taxes like this “fall more heavily on middle- and low-income families than on the rich.”

“This is because excise taxes are unrelated to the price of the item purchased,” ITEP explained. “Under a typical sales tax, a wealthy person purchasing an expensive Mercedes would pay more – in dollars – than a middle-income family purchasing a less expensive Chevrolet. But excise taxes do not work this way because of their per-unit basis. The excise tax paid on premium wine, beer, and cigarettes is the same as that paid on less expensive brands. The regressivity of cigarette excise taxes is especially pronounced due to an additional factor: lower-income individuals are far more likely to smoke than are wealthy individuals.” Read more



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