OH Gov Kasich adds 60% ecig tax to budget proposal

[squee]

http://blueprint.ohio.gov/doc/budget/State_of_Ohio_Budget_Recommendations_FY-16-17.pdf B-7, Page 40

Increase cigarette tax rate from $1.25 per pack to $2.25 per pack
Cigarette floor stock tax of $1.00 per pack (one-time)
Increase other tobacco products tax rate from 17% to 60% (Equalizes OTP and cigarette tax rates)
New Vapor Product Tax at a rate equalized to cigarettes

 

[Painter_]

Further contributing to offset the revenue foregone as a result of the income tax reductions are several changes to the cigarette and other tobacco products tax. These include a $1 per pack rate increase, an increase in the tax on other tobacco products to effectively equalize it with the tax on cigarettes, and the establishment of a new vapor products tax that would also be imposed at a rate effectively equivalent to the tax on cigarettes.

The Executive Budget proposes several changes to the cigarette and other tobacco products tax including increasing the rate by $1 per pack, imposing a cigarette floor stock tax of $1 per pack, eliminating the early discount on the tax, increasing the tax
rate on Other Tobacco Products from 17 percent to 60 percent and eliminating the early payment discount on that tax as well imposing a new tax on vapor products that will be set at a rate meant to be equivalent to the tax on conventional cigarettes. These changes are estimated to generate additional revenues of $528.1 million in fiscal year 2016 and $462.7 million in fiscal year 2017. An itemized list of these proposed policy changes and their estimated fiscal impact is provided in Table B-9.

Here is the caned letter I received back last fall when I emailed him regarding his budget plans and the included vapor tax.

Thank you for your correspondence regarding your thoughts on the proposed tax increase on tobacco products in the 2014 Mid-Biennium Review. I appreciate hearing from you.

Since taking office three years ago, the legislature and I have cut Ohioans' taxes by $3 billion. We have eliminated the death tax which lets family farmers and small business owners pass on their enterprises to the next generation. Additionally, virtually all small business owners in Ohio who receive a profit from their business can deduct 50% of that income up to a cap of $250,000, and by 2016, every Ohioan who pays taxes will see their income tax cut by 10 percent.

Thanks to these and other jobs-friendly policies, Ohioans have created 238,000 private-sector jobs in the past three years. At 6.5 percent, Ohio's unemployment rate is below the national rate and is at the lowest level since June 2008.

Advancing the policies that are getting Ohio back on track is essential to strengthening and broadening the benefits of our economic recovery. The 2014 Mid-Biennium Review furthers those policies by proposing additional income tax cuts and overdue tax reforms.

Over two years, the cigarette tax would go from $1.25 to $1.85 per pack and the tax on other tobacco products—such as the previously untaxed e-cigarettes—would rise to a level equivalent to the cigarette tax. This change, along with other proposals, would cut income taxes across all income levels by 8.5 percent over the next three years, bringing Ohio's top income tax rate below 5 percent.

Ohio's income taxes are too high and are a barrier to new job creation. Thanks to $3 billion in tax cuts, modernizing our tax code and other pro-growth policies, Ohio is getting back on track. However, additional tax cuts are needed so that Ohioans can keep more of their hard-earned money and more funds are available for economic growth, investment and job creation.

Again, thank you for sharing your thoughts. If you have any other questions, please don't hesitate to contact my office.

Sincerely,
John R. Kasich
Governor

We need to get the writing campaign in place fast since the committee already started debating the budget today. There are so many things wrong with his proposal and vapor products is just the start.

 

[NorthOfAtlanta]

Lets run the cost of e-cigarettes up to the same as burning tobacco then we won't have as many people switching and our free money from the TMSA will go down slower.

Our health doesn't count, desk murders from the tax side.

 

[Jingles]

I don't know how 10,000(just a guess) ecig users can make up for lowering the income tax on millions of Ohioans? When the brick and mortar stores close, they will lose the sales tax they are currently getting. Already sales of cigalikes are falling at convenience stores-do they think when they raise prices that sales will go up or smokers will just keep smoking? I guess the latter, so yes, they are desk murderers! (I'll just continue to buy online as long as I can).

 

[Painter_]

I wonder why there is no CASAA call to action on this...

 

[Lisa Belle]

I wonder why there is no CASAA call to action on this...

There needs to be an Ohio Vaping Association, CASAA is aware that in almost every 50 States proposals to ban and tax are coming up quickly. At the local level, there needs to be organization. Wisconsin has one, many states do. Otherwise, it's hard to stop the momentum that is going, including now Pres. Obama's new Federal Tax increase of 94% on all Tobacco including E-Cigarettes.

 

[rothenbj]

How long are they going to prop up their budgets on the shoulders of 25% of the population?

 

[NorthOfAtlanta]

How long are they going to prop up their budgets on the shoulders of 25% of the population?

As long as they can get away with it.

 

[readeuler]

Kasich at it again, eh? He and his cronies failed to tax vaping before, I'd like to make sure they fail again.

Lisa, I would be pleased to figure out some way to create an Ohio Vaping Association. I'd planned to contact CASAA recently as I've been reading the WHO's Building Blocks for Tobacco Control: A Handbook and see if it was at all relevant to the recent vapor demonization and control tactics.

I'll see if they have any advice, or maybe see if the wonderful folks like Hoosier, in Indiana, have any advice.

ETA: Maybe he didn't fail before and he's just been talking about it for months. I don't even know any more...

 

[Alawot]

Kasich is a master of the shell game and lining of his and his cronies pockets!

 

[WhiteHighlights]

I found this link on the Nothing About Us thread. Here's an opinion piece from the Cuyahoga County health commissioner and the Director of the Case Comprehensive Cancer Center. Link broken for junk : http://www. cleveland.com/opinion/index.ssf/2015/02/tobacco_taxes_improve_health_b.html

Tax the smokers, it's good for Ohio. It almost sounds patriotic.

Recent data from the American Lung Association and University of Illinois at Chicago research reaffirm that tobacco taxes improve health and the bottom line for Ohioans.

Evidence-based public health policy decisions like higher tobacco taxes reduce the burden of chronic diseases like cancer, heart disease, diabetes and asthma, save the state and taxpayers significant health care dollars spent on tobacco-related illnesses and foster a healthy and productive work force. A public health and economic trifecta.

Aha - they get a big 12 cents on the dollar!

An essential component in the proven formula to reduce Ohio's smoking rates includes investing 12 cents out of each tax dollar on effective and comprehensive tobacco prevention and cessation programs across Ohio.

Oh ya, the MSA funds went somewhere else...

When the funding went away for many of these programs, the rates began to climb.

There's a lot more drivel in the piece - save the children! even a claim about 50,000 fatalities from second hand smoke (that's a new one to me).

Good comments to the opinion piece regarding e-cigs.

 

[Painter_]

I found this link on the Nothing About Us thread. Here's an opinion piece from the Cuyahoga County health commissioner and the Director of the Case Comprehensive Cancer Center.

Maybe he did not include vapor products because Terry Allan is tired of hearing from me. Ever since his last piece in Cleveland.com I have been emailing him with positive vaping information. I started with two or three a day and now it is two or three a week. Maybe he read some of it. He has never responded to me.

 

[WhiteHighlights]

Maybe he did not include vapor products because Terry Allan is tired of hearing from me. Ever since his last piece in Cleveland.com I have been emailing him with positive vaping information. I started with two or three a day and now it is two or three a week. Maybe he read some of it. He has never responded to me.

I'd bet you are spot on. The piece focuses on the tobacco tax. Most people have been indoctrinated into thinking that is a good thing plus it doesn't hit their pocket anyway. He ignores the detail that OTP including e-cigs are also in the legislation so he can pick up some extra tax $ from there too. My mother-in-law said my husband was lucky to escape from OH (he grew up east of Cleveland). There's a reason I get along with her.

 

[Bill Godshall]

Lisa Belle wrote

There needs to be an Ohio Vaping Association

While new organizations can help (but can be expensive and frustrating to operate), we need interested folks in all states that are facing legislative threats to coalesce, collaborate and mobilize opposition.

There is just too much happening in too many states to expect CASAA, AVA, SFATZ or any organization to coordinate all of the activities necessary to defeat all these bills.