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Prop 56: Tax ‘em if you smoke ‘em

Uploaded: Oct 16, 2016

Proposition 56 would raise the state excise tax on tobacco products by $2.00/pack of cigarettes or its equivalent, and include e-cigarettes in the measure. California’s current tax rate is 87 cents/pack, among the lowest in the nation, where $1.65 is the average state levy.

The short-form Prop reads as follows:

(Prop 56) “Increases cigarette tax by $2.00 per pack, with equivalent increase on other tobacco products and electronic cigarettes containing nicotine. Fiscal Impact: Additional net state revenue of $1 billion to $1.4 billion in 2017-18, with potentially lower revenues in future years. Revenues would be used primarily to augment spending on health care for low-income Californians.”

The distribution formula beefs-up declining revenues of the current tax, which are earmarked mostly for early childhood development programs and smoking prevention (together, 75%). It then transfers the bulk of the remainder to MediCal services, as well as anti-tobacco law enforcement.

This is another exceptionally well-funded debate, with some $79 million raised, and allocated more than 2-1 in opposition to the measure. Major Yes funders include CA hospitals, doctors and dentists via their professional associations, the Service Employees Union and tech mogul Tom Steyer, whom brother blogger Tim calls a ‘radical environmentalist’ (really, Tim?). Opposition money comes almost exclusively from tobacco companies and their affiliates. CA Dems and most newspapers support the measure; the state GOP and the Orange County Register oppose it.

Supporters argue that this is a straight-forward use of market principles to fight the scourge of a primary health menace. It’s Econ 101 stuff -- price goes up and smoking goes down. The revenue, they say, is also put to good current uses -- and as smokers bear a larger share of the total MediCal expense, the rest of us pay less of it.

Opponents have chosen to paint Prop 56 as a draconian measure – we should be “helping” our smokers to quit (that’s some very strange bedfellowage for the state GOP – rejecting a market approach in favor of ‘help’ from Big Government, but I digress). They also hang an unspecified “wealthy special interests” label on the recipients of revenue from the Proposition. Further, they say that e-cigs aren’t so bad. Finally, they argue that the measure “shortchanges schools,” since the money doesn’t go to education (they might have also noted that it Fails to stop ISIS).

For my money (actually it’s not my money), the ayes have it here. There is some legitimate concern when a majority imposes special levies on a minor fraction of the population. It’s also true that so-called ‘sin taxes’ can be a slippery slope, said the guy who enjoys an occasional scotch-and-soda. Those are the two best actual policy arguments available to the No campaign.

That said, smoking is a uniquely foul pastime – worse than any other legal product in terms of both its general addictive potential, and its unavoidable, direct and dreadful impact on unwilling non-participants. There’s just nothing else like it. Thus, the use of tax policy to discourage it, and bring California up from the lower ranks of state taxers seems legitimate to me. There’s not much of a slope here, and it’s firm footing. Finally, there is good evidence that e-cigs are a gateway, and there are alternative vehicles (like patches) for nicotine delivery.

We all pay for smoking, whether we partake or not. Here’s a case where ‘less’ of it really is ‘more’ beneficial to Californians. I’ll vote Yes on 56.
Local Journalism.
What is it worth to you?


Posted by Michael Austin, a resident of Pleasanton Meadows,
on Oct 16, 2016 at 4:41 pm

Michael Austin is a registered user.

With the proposed additional tax on tobacco before voters. Gavin Newsom is fighting to legalize Marijuana on the same ballot.

With legal Marijuana, there will be more DUI people on the freeways and city streets. More of the younger generations will become addicted sooner and graduate to other, still illegal narcotics as they grow older.

Major tobacco manufacturer's will start lacing their tobacco products with legal Marijuana along with the normal nicotine, which in turn will have the BAAQMD declare more spare the air days for all those people that abuse their lungs.

Those of us that heat our homes with wood burning inserts will be forced to succumb to BAAQMD alternate heating sources that are expensive and unreasonable, and will cause greater burdens on seniors, that try to reduce expenses, while they live on fixed income.

Posted by SHale, a resident of San Ramon,
on Oct 17, 2016 at 11:30 am

SHale is a registered user.

There is no downside to increasing cigarettes taxes. the few left who smoke can complain, while they smoke AND pay the higher taxes.

Legalize marijuana and yearly increases the taxes for this as well.

Posted by Takeshi, a resident of Avila,
on Oct 18, 2016 at 3:09 am

Awesome experience just bought today 2 sets today one for me and one for my e- cigarettes. We not wanted to quit cigarettes so we got recommended to this place and we are glad that we did work great!

Posted by Cholo, a resident of Livermore,
on Oct 19, 2016 at 10:05 am

There are lots of ways to appreciate Merry-Anna!

One of my faves is cookies and ice-cream! yum-yum

It's not easy to frighten anybody that enjoys stuff to just stop because you can write a doesn't work like that!

My dogs never leave the room when cookies are baking and sometimes they demand their fair share...i rest my case...

Posted by More taxes needed, a resident of Downtown,
on Oct 19, 2016 at 2:55 pm

Increase the tax to $100 per pack. Even so, the best way to discourage smoking is to make smokers uninsurable. Lung cancer? Pay out of pocket or die. Other smoking related illness? Pay out of pocket or die. None of us should be required to subsidize health care for voluntary illnesses.

Posted by enuf, a resident of Hart Middle School,
on Oct 19, 2016 at 9:31 pm

junk food,sugar,alcohol, automobiles -the list is endless. They are all responsible for health issues in someway. How about risky life styles in general? How about couples that have children when its known they carry a dna risk of some costly health-wise condition? - special tax them too!
How eager so many are to take and give everything to the government.

A government managed life? -no thanx big brother

Posted by Cholo, a resident of Livermore,
on Oct 20, 2016 at 4:43 pm

You see I pick 'n choose...this is what I'm talking about from our Nobel Prize Laureate!!!

Web Link

This is what it means to appreciate music and merry-ana...

Posted by Hotslide, a resident of Oak Tree Acres,
on Oct 21, 2016 at 1:00 pm

Hotslide is a registered user.

Must be a tarot card reader that put forward the huge increase in taxes I see above. I'll bet Nevada is pumping some money into this legislation. People that smoke and are NOT going to quit because of the huge tax increase will do one of 2 things: Go across the border to another State and make their purchase, and increase the tax income in that State. Or, go to the underground like they have in New York and buy cigs that come in illegally by the container load from other countries (just as people acquire drugs). Go to the container port in Oakland sometime, take a big long look at the boys unloading the boats, then provide yourself with a measure of the tax dollars being avoided on all kinds of things coming in. A good bet is a lot more cigs will be offloaded, untaxed. Smoking is certainly not healthy, but the carcinogens in weed are far worse and we lost the war on that. And the idiots in power want open borders too. Yea, that's really going to help. Just another argument for more regulations, pie-in-the-sky BS.

Posted by Cholo, a resident of Livermore,
on Oct 21, 2016 at 2:35 pm

There's no need to travel far away to pick up stuff...duh

FALSE: "the carcinogens in weed are far worse..."

There are lots of ways to REDUCE the carcinogens and it depends upon the form of intake. That info is online.

I think that if "weed" is a problem for some of you, then stay away from it. If too much booze is a problem, stay away from it.

It seems impossible to frighten anybody from trying alcohol and/or merry-hanna...too late, even 5th graders know more about it than there parents.

What kind of pie in the sky are you referring, cherry, rhubarb?

Posted by smoke rings, a resident of another community,
on Oct 21, 2016 at 4:08 pm

"New York state alone, according to officials in 2011, was losing $525 million a year. A new report from the Tax Foundation found that 57 percent of cigarettes consumed in New York state in 2012 were smuggled into the state illegally. That's the highest rate of smuggled cigarettes in the country.Apr 3, 2014 "

what a drag Need to increase gas tax and tolls so its not worth the trip for the smugglers.

Posted by Joanna, a resident of another community,
on Oct 21, 2016 at 4:27 pm

Prop. 56 is imposes a disproportionate tax on vapor products, an estimated $10 tax on one bottle of e-liquid, compared to a $2 increase on one pack of cigarettes. This disproportionate tax increase will make vapor products so expensive that California's 3.8 million smokers will be less likely to consider them as alternatives to combustible cigarettes.
And the many small vapor businesses - nearly 2,500 - that comprise the industry in the state, , will likely be forced to lay off employees, relocate or even close down.

In response to your claim that, "...there is good evidence that e-cigs are a gateway..." What are your sources for making this claim?

Millions of former smokers in California and around the world already have switched to vaping, which science says is more than 95 percent less harmful than combustible tobacco, including the Royal College of Physicians, one of the world's leading medical institutions, who have endorsed vaping as a harm a harm reduction option.

California's smoking rate has dropped to the second lowest of any state, thanks in part to vapor products. And claims that this tax will protect minors couldn't be anything further from the truth because vapor products are only sold in age-verified venues and the legal age to vape in California is now 21 years old.

Despite what proponents of this measure may claim when it comes to underage use, the vaper's average age is 39, and recent data from the National Institute of Health's "Monitoring the Future" survey found decreases in teen smoking and e-cigs over the last two years.

If passed, Prop. 56 has the potential to destroy the vapor industry, leaving millions of smokers (and non-smokers) with one less choice in available options/tools to quit smoking.


Posted by Tom Cushing, a resident of Danville,
on Oct 21, 2016 at 5:21 pm

Tom Cushing is a registered user.

Here's my source: Web Link I'd also note that the CDC has taken a strong anti-vaping stance out of similar concerns: Web Link The non-profit has also advocated against the practice. Perhaps you've seen their commercials. Web Link

I understand that that the conclusion may not be unanimous. But when I see who's on the other side, it tends to include companies (including tobacco companies, with all their well-earned credibility problems) that stand to profit, as well as right-side organizations and publications. I'm sorry Joanna, but I just don't believe 'em.

Posted by Cholo, a resident of Livermore,
on Oct 22, 2016 at 10:05 am

CHEST Journal (A Medical Magazine) This article may be helpful:

Web Link

Posted by more taxes needed, a resident of Downtown,
on Oct 22, 2016 at 11:26 am

"And the many small vapor businesses - nearly 2,500 - that comprise the industry in the state, , will likely be forced to lay off employees, relocate or even close down."

Good. Another nasty business that hooks people on smoking and it is harmful.

My original idea stands -- make all smokers uninsurable. You smoke, you die, you pay for it. The rest of us don't need to pay for your insurance cost when you have chosen to make yourself unhealthy.

Posted by SHale, a resident of San Ramon,
on Oct 22, 2016 at 11:29 am

SHale is a registered user.

Studies have shown each time the cig taxes go up, more people give up the nasty habit.

So, raise 'em highER.

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