John Yarmuth is being accused of helping tobacco interests by imposing a vaping tax after the House eliminated another tax on cigarettes from its Build Back Better spending plan. Critics claim Yarmuth is imposing additional costs on the vaping industry. This is a competitive market that also includes tobacco. However, Yarmuth believes that vaping is a healthier alternative to smoking and is reducing public health risks. These taxes are also highly regressive because they often negatively impact low-income Americans.
The Yarmuth Amendment is a 2,000-plus-page bill and was passed with a $50.33 fee per 1,180 mg of nicotine. The tax will apply to nicotine synthesized, extracted, or manufactured. Cigarettes traditionally contain nicotine organically added to tobacco.
The second provision in an earlier draft had increased the rates for cigarettes and cigars by double and “the taxes on chewing tobacco products over 17 times” but was removed from the final Build Back Better bill.
Gov. Andy Beshear, D-Ky., and Bakery, Confectionery, Tobacco Workers, and Grain Millers International Union were both against the cigarette tax since it could cause loss of revenue for tobacco businesses and farmers in the tens of thousands.
The American Vapor Manufacturers said he gets huge donations from tobacco producers in his states and he removed the tax on cigarettes from the final version. Yarmuth stated that he has no idea who inserted the amendment in the bill, but it was another member of the committee who filed that amendment. He said he learned about it later. He said that the directive to do it was given by leadership.
Yarmuth stated that the tax was solely a public health issue. The vaping companies were taxed in order to make vaping more difficult for children and to increase the nicotine tax for vaping products. This is the same as the nicotine tax cigarettes companies pay.
Jason Smith, who serves on House Ways and Means Committee, said Yarmuth’s reply was “ridiculous” and indicated that he was being irresponsible. Smith criticized House Ways and Means Committee Chairman Rep. Richard Neal for his whole career wanting to be the chairman at Ways and Means only for his chairmanship to be hijacked and his bill to be rewritten and rewritten.
Open Secrets claims that both sides receive money from tobacco companies. Before announcing his bill to decriminalize cannabis, the Kentucky congressman was previously noted for purchasing cannabis stocks.
House Speaker Nancy Pelosi defended the tax by stating that it implies that both the nicotine in traditional tobacco products as well as the nicotine in electronic cigarettes is taxed at equal rates. Henry Connelly said that vaping was not essential for working families and there is substantial evidence that tobacco companies target teens with health-damaging vapes.
AVM responded by accusing Yarmuth and Pelosi of creating a public-health disaster.
Ted Trimpa, a Dem strategist representing vaping interests, stated that the tax was a play on Big Tobacco. He said it would destroy the vaping industry because it cannot absorb the same taxation as the tobacco industry. He said that nicotine is just defined as smoking and vaping and talked about the political influence that tobacco has on politics. He said it was ironic that people who are trying to quit smoking are also the ones you are actually hurting.
Tim Andrews, American for Tax Reform’s director of consumer issues, said that the vaping tax was a terrible idea for public health because so many people vape in order to quit smoking.
Andrews stated that raising taxes on products many low-income Americans use is a terrible idea and would be blamed by the public. While they removed the nicotine tax for cigarettes, they retained the vaping tax because it is a young industry with limited power. Not as many Americans vape as cigarettes, and might not notice.