U.S. Rep. Raja Krishnamoorthi, a Democrat from Illinois, chairs the House Oversight Subcommittee on Economic and Consumer Policy. He wrote this for the Chicago Tribune.
When my eldest son started high school, our whole family looked forward to the new experiences he had ahead of him. Imagine our disappointment and concern when he told us that his first three weeks of high school had been marked by numerous invitations to vape with some of his new classmates.
Unfortunately, this experience is not uncommon across our country. E-cigarettes, or “vapes” as they are known, are the most commonly used tobacco products among young people. Currently, nearly 4 million of them are vaping, including 1 out of every 5 U.S. high school students.
When the tobacco industry targeted young people to build a future stable of adult smokers, one of the most effective responses was to raise the price of their product. The Institute of Medicine, the U.S. Surgeon General and the World Health Organization all have determined that increasing the price of tobacco products is the single most effective way to reduce tobacco use. Studies show that a 10 percent cigarette price increase results in a 3 to 5 percent reduction in consumption. It’s even more impactful on young people, who generally have less disposable income to spend on cigarettes.
As a former small businessman, I’m not a big fan of higher taxes. But an increase in tobacco taxes could bring significant benefits to U.S. taxpayers. Tobacco use costs more than $325 billion a year, including $170 billion in direct medical care for adults — 60 percent of which is paid for through government programs such as Medicare and Medicaid. And it’s important to remember that tobacco remains our nation’s leading cause of preventable death, annually accounting for 480,000 deaths — 1 out of every 5 deaths in America. Raising taxes to discourage adult use is a moral, as well as a fiscal, imperative.
Despite these numbers, it has been more than a decade since the 2009 Children’s Health Insurance Program Reauthorization increased the federal tax rate on cigarettes and set the tax rate for small cigars and roll-your-own cigarettes at the same level as manufactured cigarettes. And because vaping was pretty much unknown at the time, there is currently no federal tax on e-cigarettes and other vaping products.
Obviously, it’s well past time that Congress takes action.
The Tobacco Tax Equity Act of 2021, which I’ve introduced in the House with Sen. Dick Durbin, D-Illinois, would establish a new federal tax on e-cigarettes, double the federal cigarette tax rate and set the federal tax rate for all tobacco products at the same level as the federal tax on cigarettes.
The federal government is well behind the curve in addressing the problem of youth vaping, particularly by failing to place a tax on those products. Currently, 21 states and the District of Columbia have established e-cigarette taxes. But the problem of youth vaping is a national one — as are the costs associated with the explosion of e-cigarette users. In response, our legislation would:
Require the Department of Treasury to determine the appropriate federal tax on any tobacco product not currently taxed under the tobacco tax rates in the Internal Revenue Code, including all future products such as e-cigarettes that are regulated by the U.S. Food and Drug Administration.
Equalize tax rates for under-taxed tobacco products (including pipe tobacco, smokeless tobacco and cigars) to a rate on par with taxes for cigarettes.
Double the tobacco tax rate across all products and index them for inflation to ensure they remain effective public health tools for the future.
Fortunately, my son has turned down continuing entreaties from his classmates to join them in vaping, which, for many, will bring a lifetime of nicotine addiction and accompanying health problems. Millions of other families have not been so lucky.
When vaping has become the tobacco product of choice for our young people, it makes no sense to continue exempting it from the federal tax treatment of traditional cigarettes. Let’s make it harder for our kids to vape — and harder for the vaping industry to hook them.