NEWS
CALIFORNIA VOTES FOR CIGARETTE AND
E-CIGARETTE TAX HIKES WHICH WILL
PUSH UP PRICE OF VAPING PRODUCTS
Cigarettes and e-liquids
containing nicotine will
cost more in California
after voters approved a
controversial new tax hike
on tobacco products.
Following the November 8 vote, a new
$2-per-packet tax will apply to cigarettes
to fund health care and smoking
prevention initiatives and research.
The new California Healthcare, Research
and Prevention Tobacco Tax (also
known as Proposition 56) will impose an
equivalent tax increase on other tobacco
products and on electronic cigarettes
containing nicotine. It is thought the
new measure will increase annual tax
revenues by up to $1.4 billion by 201718. Prior to this change, California’s
tobacco tax of 87 cents per pack had
remained the same since 1999.
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Tom Steyer from the Yes on Prop. 56
Campaign, said the tax hike was a
good thing.
He said: “We had a historic coalition that
included business, health care, labor,
doctors and nurses, and policemen who
said, ‘enough is enough.’
Steyer said the new tax revenue would
allow much more to be done to tackle the
leading cause of avoidable death
in California.
The tax increase will move California
from the 35th to the ninth highest place
in the country for tobacco taxes.
However, e-cigarette retailers are now
worried that the new tax could force them
out of business especially as the vaping
industry is still reeling from the new Food
and Drugs Administration regulations for
vape products.
According to The Sacramento Bee
online, Proposition 56 passed by a
margin of 62 per cent with more than 5
million votes counted.
Opponents such as tobacco companies
raised millions in California to defeat
Proposition 56 but many voters
supported the measure in raising the
tobacco tax and adding a whole new tax
on e-cigarettes.
Research by the U.S. Centers for
Disease Control and Prevention found
that increasing the price of cigarettes
led to a reduction in demand for them
and this was particularly the case for
teenagers and young adults.
Under Proposition 56 Medi-Cal will
receive the largest portion of the tax
revenue — between $710 million and $1
billion in 2017-18. Schools will receive
$20 million for tobacco prevention
education and five percent of the tax
revenues will go to the University of
California to conduct medical research
into tobacco-related diseases.