Senate Finance Committee Hearing 7/29/14

[pamdis]

Ron Wyden chaired a committee hearing on tax disparity between types of tobacco and consumer shifting of products to avoid taxes. IE - shifting from small to large cigars, and RYO to pipe tobacco.

He mentions several times the untaxed situation of e-cigarettes. He especially hounds at the end that leaving them untaxed will have the undesirable effect of tax avoidance again when people switch, because obviously they are only switching to evade taxes.

There are two panels. First one is TTB official and GAO official. The second panel is a tobacco co exec, premium cigar exec, health official from Oregon, and someone from a tax foundation.

The United States Committee on Finance: Hearings - Tobacco: Taxes Owed, Avoided, and Evaded

His press release for the hearing said his objective is to close the loopholes that allow tax evasion. Whatever legislation he comes up with, he clearly intends to try to make e-cigarettes taxable at the same rate as cigarettes so that all us tax evaders are stopped from making the "American taxpayers taking a hit". Now, apparently we are thieves as well.

 

[skoony]

well the cats out of the bag. this all about the money. the guvments money,BP's money and,BT's money.Sen. Wyden may have made a slight tactical error though. perhaps he should have waited till after the FDA's forthcoming regs. of course no one in the guvment has even remotely brought up all the money we are going to save them in future health care dollars.
twilight zone regards
mike

 

[Bill Godshall]

pamdis wrote

Whatever legislation he comes up with, he clearly intends to try to make e-cigarettes taxable at the same rate as cigarettes so that all us tax evaders are stopped from making the "American taxpayers taking a hit".

What evidence is that statement based upon? I saw no mention of e-cigs in any statements or testimony presented during the hearing (see below), nor have I heard/seen Wyden make any previous comments about taxing e-cigs..

US Senate Finance Cmte Chair Ron Wyden’s comments on tobacco taxation
The United States Senate Committee on Finance: Newsroom - Chairman's News

US Senate Finance Cmte Ranking Member Orrin Hatch’s comments on tobacco taxation
http://www.finance.senate.gov/imo/media/doc/Hatch Statement1.pdf

TTB’s John Manfreda testimony on tobacco taxation
http://www.finance.senate.gov/imo/media/doc/1. Manfreda Testimony1.pdf

GAO’s David Gootnick testimony on tobacco tax disparities
http://www.finance.senate.gov/imo/media/doc/2. Gootnick Testimony.pdf

Rocky Patel’s testimony on cigar tax disparities
http://www.finance.senate.gov/imo/media/doc/4. Patel Testimony.pdf

Liggett’s Ron Bernstein testimony on RYO and pipe tobacco tax disparities
http://www.finance.senate.gov/imo/media/doc/3. Bernstein Testimony.pdf

Oregon Health Dept’s Michael Tynan testimony on tobacco tax disparities
http://www.finance.senate.gov/imo/media/doc/5. Tynan Testimony Corrected.pdf

Tax Foundation’s Scott Drenkard testimony on state cigarette tax disparities
http://www.finance.senate.gov/imo/media/doc/6. Drenkard Testimony.pdf

NACS statement to US Senate Finance Cmte on tobacco taxation
http://www.nacsonline.com/News/Dail...29142_TobaccoTaxesLettertoUSSenateFinance.pdf
NACS Submits Statement on Tobacco Tax Evasion | NACS Online

NBC article on US Senate Finance Cmte hearing on tobacco taxation
Shift to pipe tobacco, large Cigars Saves Tobacco Firms Billions

 

[Bill Godshall]

Please note that Ron Wyden opposes taxing the Internet, which indicates that he (unlike most Democrats) doesn't support taxing things than benefit society.
The United States Senate Committee on Finance: Newsroom - Chairman's News

 

[Bill Godshall]

The Senate Finance Cmte hearing on tobacco taxation had nothing to do with e-cigs, but rather focused on the problems that were caused by the 2009 SCHIP tobacco tax increases on different tobacco products, although one of the testifiers focused on cigarette tax disparities between states (and the resulting smuggling that's been created).

The good news for vapers was that nobody (at the Senate Finance Cmte hearing) mentioned anything about the current federal tax on smokeless tobacco, which is very low.

But once legislation is introduced to fix the tobacco tax disparities caused by the 2009 tax changes, I suspect the ANTZ and left wing Democrats in the Senate (Durbin, Harkin, Blumenthal, Boxer, Brown, Merkley, Markey) will try to amend the bill to heavily tax e-cigs and to sharply increase the smokeless tobacco tax. But Republicans will likely (especially if we urge them to) oppose any attempt to change the smokeless tobacco tax or impose taxes on e-cigs (by pointing out that wasn't the purpose of the hearing, and that doing so would threaten the ability of Congress to fix the tax disparity problems created by the 2009 tax change.

 

[DC2]

I'm not sure how anyone can watch what is happening with electronic cigarettes and not realize that the world is seriously screwed up.
But then, I guess it always has been, so it's probably nothing new.

I guess what's new, at least for me, is that I'm finally starting to understand how things really work.

 

[pamdis]

What evidence is that statement based upon? I saw no mention of e-cigs in any statements or testimony presented during the hearing (see below), nor have I heard/seen Wyden make any previous comments about taxing e-cigs..

I came to that conclusion after watching the entire hearing. There may have not been any mention in the written testimony, but Wyden sure brought it up during questioning. Which led me to the same conclusion you have, that when they try to address the tobacco disparities, e-cigs are most definitely going to be on the table.

 

[LaraC]

I came to that conclusion after watching the entire hearing. There may have not been any mention in the written testimony, but Wyden sure brought it up during questioning. Which led me to the same conclusion you have, that when they try to address the tobacco disparities, e-cigs are most definitely going to be on the table.

I agree with pamdis. I found a video of the entire hearing:
The United States Committee on Finance: Hearings - Tobacco: Taxes Owed, Avoided, and Evaded

Near the end of the video, starting about 1:21:38, Rep Wyden asks the panelists a question about e-cigarettes. Mr. Drenkard had positive things to say about e-cigarettes, but Bernstein and Tynan did not. Most telling was Rep Wyden's shocked reaction to Tynan's description of knowing about "The E-Liquid Lady" mixing up vats in the back of her store and "injecting" it into the products. "Injecting", as a buzzword, sure got Wyden's attention.

 

[Bill Godshall]

Thanks for the clarification, as I had not watched the hearing, but rather just read all of the testimony and prepared comments.

But any attempt by the Senate Dems to tax e-cigs and/or increase the smokeless tobacco, cigarette or other tobacco taxes could be a deal breaker with Republicans (especially Republicans in the House), as there is currently bipartisan support (and support by ANTZ and most of the tobacco industry) for fixing the disparities caused by the 2009 tax law.

That's why the Senate Democrat's bills to tax e-cigs and increase the smokeless tobacco tax have gone nowhere (i.e. they cannot even get approved in Committee) during the past several years.

 

[Surf Monkey]

I'm not sure how anyone can watch what is happening with electronic cigarettes and not realize that the world is seriously screwed up.
But then, I guess it always has been, so it's probably nothing new.

I guess what's new, at least for me, is that I'm finally starting to understand how things really work.

Seems to me that you're suffering from "single issue syndrome." You're so close to it and invested in it that it seems far more screwed up than it actually is. Which isn't to say that nothing is wrong here, just that your observation is hyperbolic. Whatever happens with regulation? It isn't going to be the end of the world. There's no reason to become disillusioned with life simply because government is government.

 

[DC2]

Seems to me that you're suffering from "single issue syndrome." You're so close to it and invested in it that it seems far more screwed up than it actually is. Which isn't to say that nothing is wrong here, just that your observation is hyperbolic. Whatever happens with regulation? It isn't going to be the end of the world. There's no reason to become disillusioned with life simply because government is government.

Not so much.

It's just that the electronic cigarette issues have opened my eyes.
Or perhaps I should say that it has helped me see things from a broader perspective.

And that broader perspective has enabled me to see how corruption is everywhere, and always has been.

Eliminating corruption is key to making the world work the way it should.
But I'm not sure any country or form of government has ever succeeded in that effort.

At least not for very long.

 

[DrMA]

I don't think it's possible to eliminate all corruption as long as the planet is populated by more than 1 person.

 

[HecticEnergy]

I didn't see it posted but what about the money they are already making on ecigs? B&ms are popping up all over the place. That's jobs and income tax and possibly less people requiring government assistance... That can't be hurting the economy and their tax base...


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[Kent C]

I didn't see it posted but what about the money they are already making on ecigs? B&ms are popping up all over the place. That's jobs and income tax and possibly less people requiring government assistance... That can't be hurting the economy and their tax base...


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"Concern for children" trumps all that. Oh and them knowing what's best for us, is a close second. That's why I don't parrot 'Follow the money'... much of it is just for the control... and their own jobs.

 

[LaraC]

I didn't see it posted but what about the money they are already making on ecigs? B&ms are popping up all over the place. That's jobs and income tax and possibly less people requiring government assistance... That can't be hurting the economy and their tax base...

Good point. But I fear even that may pale in comparison with the massive taxes governments can grab from continued traditional cigarette sales.

As combustible cigarette sales go down.... and if ex-smokers live longer, collecting Social Security for additional years.... and if even "the children" are not gravitating toward real cigarettes.... well, "they" see the handwriting on the wall and are quite determined to erase it.

 

[HecticEnergy]

Money and power. Enough is never enough...
Until we stand up and say enough is enough loud enough for them to hear us from way up there on mt Olympus.

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[DC2]

I don't think it's possible to eliminate all corruption as long as the planet is populated by more than 1 person.

I'm not sure if I agree or disagree.


But that could make for a great thread in the Outside.


I don't think it matters how many people so much as...
How many of those people don't care about anyone but themselves.

 

[Kent C]

I'm not sure if I agree or disagree.


But that could make for a great thread in the Outside.


I don't think it matters how many people so much as...
How many of those people don't care about anyone but themselves.

But that's sometimes the biggest problem. It is what drives 'those who know what's best for others'. They're not operating from a proper* rational self-interest, but from a view of 'other's interests' and that is from where the force and the corruption comes. It's ok to not care about anyone but oneself (and your family and friends) as long as you don't harm someone in the process. Our currency used to say "Mind Your Own Business" (Ben Franklin) before "In God we Trust". It was good advice, imo, and a good reminder of why this country was founded. The founders and pilgrims here, escaped those who attempted to mind their business rather than their own.

*'proper rational self-interest' vs. 'selfishness' with no regards for how one's actions effects others - where in some cases doesn't really promote one's self-interest.