California voters have officially approved significant tax increases on cigarettes and vaporiser devices. That comes after two previously failed attempts over the last decade to raise the state's tax on the commodity. Now, instead of paying 87 cents in tax, cigarette consumers will now pay $2.87.
Proposition 56, or The California Healthcare, Research And Prevention Tobacco Tax Act Of 2016, is seen by many as a huge step in the direction of tobacco prevention; one that could inspire other states to follow suite. However, similar propositions in North Dakota, Colorado, and Missouri did not pass.
- North Dakota has the third-lowest cigarette tax rate in the country at 44 cents per pack.
- Colorado voted down an Amendment 72 to add $1.75 in tax per pack, raising the levy to $2.59 on products that included cigars and chewing tobacco.
- Missouri rejected a cigarette tax increase of 15 cents because, as the opposition says, the tax hike is probably too low to discourage consumers. Missouri remains the nation's lowest cigarette-taxing state 17 cents a pack.
- New York keeps it's status as the highest cigarette-taxing state at $4.35 per pack.
Tobacco companies, including R.J. Reynolds Tobacco and Altria, put $70 million into defeating California's Proposition 56, and $90 million total for all of the measure that was put on the November 9 ballot. The initiative is projected to raise $1 billion to $1.4 billion in new tax revenues for California.
While U.S. smoking rates have declined significantly, health officials and advocates want more measures in place to deter younger generations from taking up a habit that is killing many older Americans.
Secondarily, organisations like Yes on 56 hope to see some of the tax money gleaned from cigarette sales used to offset the cost of cancer treatments and research to fight cancer and other tobacco-related diseases.
However, that doesn't address the vaping industry, which will now also have taxes applied to their electronic cigarettes for the first time. Vaping devices, they feel, should not be taxed at the same rate because their products produce virtually harmless vapor from liquid nicotine instead of tobacco smoke. They are actually a safer alternative to conventional cigarettes. E-cigarettes have grown in popularity since the mid-2000s. This year, e-cigarette sales are expected to reach $4.1 billion.