12/16/2021
Yesterday, the V***r Technology Association (VTA) released a new report called the “The Negative Economic Impacts of the New Ni****ne Tax Imposed Only on V***r Products In the Reconciliation Bill,” by economist John Dunham & Associates (“Dunham”). The Dunham Report reveals stark negative impacts of the Democrats' proposed ni****ne v**e-only tax: cheaper ci******es, more smoking, 43K lost jobs, $2.2 B lost wages. Highlights are below but the full report is here: https://v***rtechnology.org/blog-post-template-2/
Background
The v***r product industry is an important part of the US economy. About $8.1 billion in v***r sales lead to 133,600 jobs and $22.1 billion in economic activity.
About 35,000 of these jobs are held by people working for the over 9,850 independent adult-only, retail v**e shops located across the country. Even so, the number of independent adult-only, v**e shops has fallen by 27 percent since 2018 as a result of new state and federal taxes and regulations.
Congress is currently deciding whether to impose a new tax only on v***r products of 2.78-cents per milligram of ni****ne, believing that such a tax would “equalize” or create “parity” with cigarette taxes.
Conclusions
Our analysis finds that the bill would not create anything close to parity with cigarette taxes but, rather, would tax v***r products at a much higher rate – up to nine times higher – than the tax on a pack of ci******es.
Our analysis also finds that, if passed, the proposed ni****ne tax in the Reconciliation Bill:
o Would lead to a net price increase on v***r products at retail of about 53 percent (21.2 percent for a standard two-pack of closed-system pod products and 73.5% for a standard 60 milliliter bottle of open system e-liquid), while the price of ci******es and other to***co products would remain unchanged as they would not be subject to any additional federal tax.
o Would lead to a reduction of nearly 42,800 full-time equivalent jobs and the loss of $2.2 billion in wages and benefits.
o Would negatively impact the size of the overall economy which would fall by about $7.0 billion.
o Would result in states and their localities losing $620.1 million in taxes while the federal government attempts to generate revenues.
o Would lead to a loss of about 31.9 percent of v***r product sales or 3.7 million milliliters of e-liquid consumed. Of this loss, 61.2 percent would be the result of consumers switching to other to***co products, including combustible ci******es. An additional 18.5 percent of these lost sales would move to the black market.
