Tuesday, April 5, 2016

The Cons and Cons of Over-Taxing Vaping (UberThoughts USA Guest Post)

As if the once-great State of Vermont had not already done enough damage by foisting Bernie Sanders on our nation, rather than an actual Senator with actual understanding of basic economics, they’re about to add to their odd record.
Yes, the legislature up there in the Green Mountain State is debating, as we speak, a proposal to place a 92% tax on wholesale “e-liquids” and other products associated with “electronic smoking”, a practice known as “vaping.”  You may have seen it done, if you saw what you thought was a group of people together somewhere smoking, but there weren’t any cigarettes and the clouds were a bit thick to be coming from actual smoking.
Those of us who have never smoked and never “vaped” may have a little challenge understanding what vaping is, and I don’t confess to knowing it really well myself.  Suffice it to say that it is a practice wherein a liquid, which may contain nicotine in various known levels (or zero), is burned in a small, handheld device so as to produce vapor that is inhaled and exhaled by the user.  Go with that.
Now, a couple things.  OK, actually a lot.  First, there is no tobacco involved here at all.  The liquid is what is vaporized, and that is not a tobacco product.  Second, the vapor exhaled is essentially water vapor (condensed steam) and has nothing in it that would be readily noticed by anyone in the area, save for the cloud.  Is it “safe”?  Compared with tobacco smoking, sure — tobacco has 43 known carcinogens and 400 other components known to be toxic.  I wouldn’t go so far as to use the word “safe” too generously, especially with nicotine being an addictive drug, but I’m fine as a relative term.
Vaping liquids come in an enormous variety of flavors.  Vapers tend to be younger, and a lot are millennials, so the names are as varied as the flavors.  A typical vape shop is going to be filled with those varieties.
One other thing.  The liquid used in the devices, remember, is purchased with a set level of nicotine, ranging from none at all to something like a cigarette, or higher.  When you buy the liquid (called “juice”), along with selecting the flavor, you specify the level of nicotine.  So if — and this is important — you are vaping as a means to quit smoking, you can step down to being nicotine-free, on your own terms.  And there is certainly anecdotal information of people doing just that and being non-smokers now.  I am personally well-acquainted with such cases.
Because the clouds from these devices are water vapor and thus visually thicker than tobacco smoke (though relatively odorless), it is a hobby of vapers to compete to make better exhaled clouds, sort of like smoke ring competitions on steroids.  You may see that sort of thing done.
But back to Vermont.
The person who proposed the 92% wholesale tax had to be trying to do this to diminish the sales of vaping products.  No one would argue that’s the intent.  In fact, I wrote a column here a year ago advocating for a position like that relative to tobacco smoking as a means to kill the industry that kills 400,000 Americans each year.
The question, though, is “Is it way too early to try to kill off the vaping industry?”  And to that I have to say a loud “yes, it is way too early”, and it may never be a good thing.  It is too early because, although the FDA hasn’t really come down on the vaping practice yet, there is plenty of evidence that it is providing a means for cigarette smokers to get off cigarettes, immediately, and as long as that is going on, we need to be careful to choke off that means of quitting.
Now, some of those in Vermont pushing the idea are trying to make it too expensive for people under 18 (or 21 in some states) to start vaping.  But people under the legal age are, well, already illegal, and cannot be sold to in the first place.  This is not a situation analogous to the cigarette disaster.
You remember, or at least know, that one.  For decades, the tobacco industry at the same time downplayed the health risks of smoking that it always knew, and took pains to make smoking glamorous so that teens would take it up even though selling cigarettes to them was illegal.  That was such a hideously evil thing to do that, despite the industry paying off congressmen and senators for decades, eventually they lost in court and paid gargantuan settlements.  I would be delighted to see tobacco companies kicked out of the USA.
The legacy they have created, though, lives on.  And I see vaping as an acceptable outgrowth of what has been done to society.  Because we let our legislatures get paid off by Big Tobacco for decades to perpetuate their product image, we now need to continue weaning ourselves off tobacco as a nation.  Vaping, my friends, is an incredibly less harmful means to that end — we should be facilitating it, not taxing it into submission.
“Vape shops”, where these products are purchased and tried out, are almost totally small businesses, and small businesses owned by younger people, many of whom are learning to be entrepreneurial.  Put a 92% wholesale tax on them, and they go out of business and their owners and employees head to the unemployment lines.  If we were talking tobacco here, I wouldn’t care — but we’re not.
In the interest of full disclosure, I have to note that my older son, who is 42, owns two of those shops.  He spends a lot of time developing marketing campaigns to promote them, and has become a creative leader and recognized name in his industry.  Obviously I want him to succeed, but I would never promote a position in this column that I did not believe to be accurate.  If he were selling cigarettes, you wouldn’t be reading this.  And, by the way, vaping has made him an ex-smoker.
Vermont needs to back down from its proposal and vote it away.  It is a business-killer and job-killer, and a job-killer for a small industry that is at least somewhat helping to get people off tobacco.  I get the thought — “let’s keep kids off this stuff” — but the industry itself is already doing that.  There are laws against underage sales already, and shops are really careful about whom they sell to for that very reason.  The price sensitivity is felt by the legal-age buyers.
Liberals — and Vermont must be full of them to keep sending Bernie Sanders to Washington — are really famous for feel-good legislation that ignores the outcomes.  Think “minimum wage laws” as a good example.  Those liberals in the Vermont legislature need to step back, take a good deep breath and realize that the outcomes of that proposal are not what they would like them to be.  They need to do better.
Perhaps they should stare up at the clouds and contemplate.
Copyright 2016 by Robert Sutton
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