Electronic cigarette tax

Pennsylvania’s Plan on Taxing Electronic Cigarettes

Let’s keep the short and sweet and talk about Pennsylvania’s Budget Deficit of one billion dollars for the 2014 to 2015 year. What this means is Pennsylvania is starting the year in the hole, or in the red. They’ve budgeted more money than they actually have and are trying to find ways to make up for it. Among many of their genius (obviously sarcasm) ideas of making up for this budget deficit is to put a sin tax on electronic cigarettes.

What is a sin tax you ask?

Sin taxes are normally applied to a product or service that society feels that it sets back the population as a whole. Some examples of sin taxes include gambling, alcohol, tobacco cigarettes, soft drinks, fast food, and etc. The logic behind sin taxes is these product and services are causing more harm to the general public than good and one of the arguments are the tax is to levy/off set health and medical costs generated by these sin products. Do they actually? Not really. Generally speaking sin taxes are applied to a product that is much greater than your average sales tax. Sin taxes differ by state by some states do have a much higher than others. For example a pack of cigarettes in South Carolina is less than $5 a pack, in Arizona however you’re looking at more than $10 per pack.

Right now Pennsylvania politicians are considering raising the electronic cigarettes up to 60%  of wholesale price for all products including E-Juice and hardware. For those of us that buy E-Juice by the bottle this could mean even a small bottle of E-juice could be much more expensive than a pack of cigarettes. HOWEVER, they want to only increase the price of a pack of cigarettes up to 50 cents per pack. So basically for those of us that choose the smarter alternative to regular cigarettes are being punished by a possible implementation of a sin tax which raises the prices for products considerably for the consumers, all while everyone who has not switched to electronic cigarettes are almost being awarded by only getting a slap on the wrist of an extra two quarters per pack of smokes.

The most baffling part is raising the taxes on electronic cigarettes will only return 25 million dollars. A large number to us regular folks, but it is only 2.5% of the budget deficit. So basically it won’t even make a dent. Also raising the cigarette tax an additional 50 cents would yield 50 million dollars. So by that logic, an additional 25 cents for the regular cigarettes would cover the entire return of electronic cigarettes!

Raising the tax for electronic cigarettes would put many small business owners out of business as most customers would not be willing to pay such a markup as they can easily purchase out of state or even online for much cheaper. Yes they can do this now but the percentage saved is marginable compared to the amount saved if they do decide to act on this tax spike. If you feel as strongly as I do about this ridiculous tax, visit CASSA to make your voice be heard whether you are a Pennsylvania resident or not.

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