Vape tax added to Build Back Better package leaves House Dems under surveillance
House Budget Committee Chairman John Yarmuth, D-Ky., Faces charges he is helping tobacco interest with a tax on vaping after the House removed another tax on cigarettes from its Build Back Better spending program.
In doing so, critics claim that Yarmuth is imputing additional costs to the vaping industry, which not only competes with tobacco, but is seen to benefit public health by providing an alternative to smoking. These types of taxes have also been criticized as highly regressive as they tend to have a disproportionate impact on low-income Americans.
Dubbed the “Yarmuth Amendment,” the 2,000-plus-page bill passed with a tax of $ 50.33 per 1,180 milligrams of nicotine. The bill clarifies that the tax applies to nicotine that is synthesized, extracted or manufactured – whereas cigarettes traditionally include nicotine organically included in tobacco.
According to the Louisville Courier Journal, another provision included in an earlier draft doubled the rate on cigarettes and cigars and increased “taxes on chewing tobacco products more than 17 times,” but this tax was removed from the final version of Build Back Better invoice.
The cigarette tax had been pushed back by Gov. Andy Beshear, D-Ky., And the International Bakery, Confectionery, Tobacco Workers and Grain Millers Union (BCTWGW). Beshear reportedly warned that tobacco growers and businesses could lose tens of millions in revenue because of the tax.
Commenting on the Yarmuth Amendment, the American Vapor Manufacturers (AVM) told FOX Business: “As head of the House Budget Committee, he receives large donations from tobacco growers in his state, and he has removed the tax on cigarettes of the final version of the bill. ”
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“I have no idea who put this amendment into the bill,” Yarmuth said this week in an exclusive interview with FOX Business. “I was the director, but it was someone else on the committee who tabled the amendment, and I only found out later.” He added that “the directive to do it came from the leadership.”
“It was purely a public health issue, vaping companies were taxed to make it harder for children to use their products and to increase the nicotine tax for vaping products, so they were equal to the nicotine tax that cigarette companies pay, ”Yarmuth added. .
“We weren’t protecting the tobacco industry. There is no love for the tobacco companies in the Democratic caucus.”
Budget leader Jason Smith, R-Mo., Who also sits on the House Ways and Means Committee, said Yarmuth’s response was “ridiculous” and showed Yarmuth to be irresponsible.
“His name is on this legislation,” Smith said. “And that he would have written it without knowing what it really contained, especially the one that was going to have such a damaging impact on working class families. In my opinion, this is irresponsible, and it is a classic example of what people hate about Washington. “
Smith also criticized the chairman of the House Ways and Means Committee, Rep. Richard Neal, D-Mass., For spending “his entire career wanting to become president of Ways and Means only to see his presidency hijacked and his project. of law rewritten by Pelosi. His own committee chairs have essentially no power. “
According to Open Secrets, both sides of the aisle are receiving money from the tobacco industry. Between 2017-2018, BCTGW donated $ 1,500 to Yarmuth. It also received $ 1,000 from the tobacco industry in 2019-2020, according to Open Secrets. The Kentucky congressman had previously drawn attention to buying cannabis stocks before announcing a bill to decriminalize marijuana.
The office of House Speaker Nancy Pelosi defended the tax, saying it “simply ensures that nicotine in traditional tobacco products and nicotine in electronic cigarettes are taxed at the same rate.”
Henry Connelly, spokesperson for Pelosi, D-Calif., Told FOX Business: “Unlike the gasoline tax hike that Republicans tried to add to the infrastructure bill, vaping is not a critical need for working families, and there is significant evidence of tobacco companies targeting unhealthy vape products in adolescents. ”
AVM responded by accusing Pelosi and Yarmuth of creating a “public health disaster.”
“President Pelosi is wrong with the math, wrong with the science, and apparently hasn’t even read the government’s own estimates of the public health disaster this vaping tax will cause,” President Amanda Wheeler said. Wheeler also highlighted research funded by the National Institutes of Health (NIH), which valued the tax would translate into “about half a million additional teenage smokers overall.”
Yarmuth’s office referred FOX Business to the House Ways and Means Committee. A contact for the Democrats on the committee did not respond to FOX Business’s request for comment.
Democratic strategist Ted Trimpa, who represents the interests of vaping and other clients, said the tax appeared to be a game for Big Tobacco and would crush the vaping industry because it cannot absorb the kind of taxation that the tobacco industry can.
“They [Democrats] know they need to increase their income and they turn to the world of nicotine. Unfortunately, sometimes nicotine is simply defined as tobacco and vaping is the new player in the state. Tobacco is much more sophisticated, ”said Trimpa, referring to the political influence of the tobacco industry.
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He added that it was “ironic” that “the people who are actually trying to help people quit smoking are the people you are actually hurting.”
Tim Andrews, director of consumer affairs for Americans for Tax Reform, told FOX Business that the vaping tax is a “terrible idea for public health,” as many people vape to stop their addiction to cigarettes.
“Raising taxes on products that many low-income Americans use is a terrible idea,” Andrews said. “Because it’s a tax on the poor, so I think the Democrats realized it would be a hugely unpopular move, for which they would be blamed by the public, so they removed the nicotine tax on cigarettes and kept it going. the tax on vaping products because it’s a new, young industry with little power and not as many Americans use vaping as cigarettes and might not notice it. “