Sen. Dick Durbin, D-Ill., has introduced the Tobacco Tax Equity Act Of 2019, through which he seeks to establish the first federal tax on e-cigarettes, as well to increase the tobacco tax rate and close loopholes that he says are being taken advantage of by tobacco companies to avoid regulation and taxes for their products.
The bill, S. 2517, is being co-sponsored by Sens. Sherrod Brown, D-Ohio; Jack Reed, D-R.I.; Richard Blumenthal, D-Conn.; Ed Markey, D-Mass.; Ron Wyden, D-Ore.; Mazie Hirono, D-Hawaii; Patty Murray, D-Wash.; and Jeff Merkley, D-Ore. In a press release, Durbin’s office said that according to public health experts, increasing the price of tobacco products is the single most effective way to reduce tobacco use, especially among youth, which is what this bill seeks to do.
“For years, I have been sounding the alarm that the vaping industry is following Big Tobacco’s playbook on targeting kids,” said Durbin. “I’ve learned that the most effective tool to prevent children from starting this insidious habit is to price it out of their range. This bill would do that, and help reduce tobacco and e-cigarette use by ending loopholes that the industry has exploited to target our children.”
Large cigars are specifically mentioned in the press release as being taxed at a lower rate than cigarettes, along with e-cigarettes, smokeless tobacco and pipe tobacco. As for cigarettes, the Tobacco Tax Equity Act of 2019 would double the federal tax rate and peg it to inflation, while also setting the federal tax rate for all other tobacco products—including e-cigarettes—at this same level. Durbin’s announcement says that due to the way the current tax code is written, numerous tax and regulatory loopholes have been exploited by the tobacco industry that has meant nearly $4 billion in lost federal revenue between 2009 and 2014.
The full text of the bill has not yet been published, nor has a summary of the bill’s text.
Featured image By Scrumshus (Own work) [Public domain], via Wikimedia Commons.