Tobacco Tax Compromise Stumbles in Legislature

March 13, 2016 By Joel Fox 1 Comment

cigarette smoking ashesThe California Legislature passed a package of bills intended to diminish tobacco sales. While one measure allows county governments to seek a tax on cigarettes, a state tobacco tax was not included in the package. That’s not to say many in the Legislature would like a tobacco tax and efforts were made to convince the tobacco industry to go along with a deal that would include a state tax increase. The proposed deal would result in scuttling a ballot initiative aimed for November to increase the tobacco tax and kill some of the bills in the package.

Here’s how Los Angeles Times columnist George Skelton explained the maneuvering in his Monday column:

Behind the scenes, Senate leader Kevin de León (D-Los Angeles) quietly is offering to negotiate with tobacco. If the industry were to allow the Legislature to pass a state tobacco tax, perhaps some of the package could be snuffed.

Then sponsors of a November ballot initiative that would raise the state cigarette tax by $2 per pack might be persuaded to withdraw their measure. That would save the tobacco industry upward of $100 million fighting the initiative.

Why wouldn’t the tobacco industry consider a more modest increase in the tax on cigarettes if some of the restrictive measures on tobacco were pushed aside and the initiative was pulled before it qualified for the ballot?

While tempting, the tobacco industry saw a big hurdle with any deal. There was no guarantee that if the deal were made a different interest group than the one behind the current ballot initiative would come along with a new tobacco tax effort in the near future. Or a future legislature could also consider a tax increase on tobacco.

Without a solid guarantee, the tobacco industry would rather take its stand now against any state tax increase. There is no way negotiating legislators can guarantee that some outside group won’t go to the ballot via the initiative with a new tax increase even if a deal is struck.

Many supporters of more tax revenue think tobacco and cigarettes is a good target because non-smoking voters outnumber smokers and tobacco users. Thus it is tempting for those who want to raise revenue to consider a tobacco tax.

The possibility that a new effort to raise tobacco taxes in the near future could not be guaranteed held back any legislative compromise on taxes.

Joel Fox is editor of Fox & Hounds and president of the Small Business Action Committee.

This piece was originally published by Fox and Hounds Daily

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Vote nears to raise smoking age to 21

March 10, 2016 By Jonathan Cooper 1 Comment

As reported by the Riverside Press-Enterprise:

California’s Senate is poised to vote on a sweeping package of anti-smoking measures—including raising the smoking age to 21— as lawmakers try to crack down on tobacco use and the health problems that flow from it.

If the Senate approves Thursday and Gov. Jerry Brown signs off, California would become the second state to move the age to buy cigarettes from 18 to 21, and electronic cigarettes would face the same restrictions as tobacco products.

The six bills represent California’s most substantial anti-tobacco push in nearly two decades, the American Cancer Society said. But advocates couldn’t garner enough support to raise cigarette taxes, which requires a two-thirds supermajority. The Cancer Society and other groups are seeking to qualify an initiative for the 2016 ballot. …

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Scientist Debunks Claim That E-Cigs Are As Dangerous As Tobacco

January 17, 2016 By Guy Bentley 1 Comment

e-cigaretteA study making headlines across the world claiming two e-cigarette products “damaged cells in ways that could lead to cancer,” is under fire from a leading public health expert.

Conducted by a research team at the University of California, San Diego, the study investigated how e-cigarettes may contribute to the development and progression of a cancer known as head and neck squamous cell carcinoma.

The research team “created an extract from the vapor of two popular brands of e-cigarettes and used it to treat human cells in Petri dishes. Compared with untreated cells, the treated cells were more likely to show DNA damage and die.”

What was the result?

“The exposed cells showed several forms of damage, including DNA strand breaks. The familiar double helix that makes up DNA has two long strands of molecules that intertwine. When one or both of these strands break apart and the cellular repair process doesn’t work right, the stage is set for cancer.”

One of the study’s authors even went on to claim “they [e-cigarettes] are no better than smoking regular cigarettes.” Combined with a hyperbolic press release, the study has triggered a wave of headlines claiming vaping is just as dangerous as smoking.

But Dr. Michael Siegel, a professor in the Department of Community Health Sciences at Boston University School of Public Health, with 25 years of experience in the field of tobacco control has dissected the most sensational claims of both the researchers and headline writers.

In a statement sent to The Daily Caller News Foundation, Siegel said, “this study confirms previous findings that e-cigarette vapor can cause damage to epithelial cell lines in culture, and that the damage caused by e-cigarette vapor is much lower than that caused by tobacco smoke. However, it cannot be concluded from this cell culture study that e-cigarette vapor actually has toxic or carcinogenic effects in humans who use these products.”

“In particular, the dose at which e-cigarette vapor was found to have an adverse effect was much higher than the actual dose that a vapor receives. Nevertheless, one of the co-authors concluded publicly that based on these results, e-cigarette use is no less hazardous than cigarette smoking.”

Siegel added that “not only is this conclusion baseless, but it is damaging to the public’s health. It undermines decades of public education about the severe hazards of cigarette smoking. To declare that smoking is no more hazardous than using e-cigarettes, a non-tobacco-containing product is a false and irresponsible claim.”

One of Siegel’s chief concerns about the misrepresentation of e-cigarettes is many ex-smokers who took up vaping may switch back to regular cigarettes if they believe there is no difference between the two. “This will cause actual human health damage, not merely damage to some cells in a laboratory culture,” says Siegel.

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Originally published by the Daily Caller News Foundation

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CA Doesn’t Need Additional Tax Revenue

December 8, 2015 By Jon Coupal 2 Comments

TaxesThere is an old expression, “carrying coals to Newcastle,” to describe a useless activity or fool’s errand. Sort of like shipping pineapples to Hawaii or, bringing it closer to home, sending more tax dollars to Sacramento.

The truth is, Sacramento is awash in cash. The Legislature’s budget analyst estimates that this fiscal year will end with $3 billion more than anticipated and, by 2017, state reserves may even top $11 billion.

For the political ruling class, this is an embarrassment. Last summer, the governor called a special session of the Legislature in an attempt to secure legislative approval of a new health care tax on managed care organizations (MCOs) because the current tax is about to expire. He also called another special session to deal with transportation funding. In both cases, Republicans in the Legislature are making trouble for those backing new taxes by pointing to the obvious: The state already has plenty of money.

This embarrassment of riches is also bad for the morale of special interests looking to increase taxes via ballot measures. Public sector unions are pushing for an extension in the “temporary” tax increase approved by voters in 2012.

But they have yet to show a united front and are fighting over who will get the money. Whether the proceeds go to education, as favored by the state’s most powerful special interest, the California Teachers Association, or to the health care industry, as is supported by other union and hospital interests, has yet to be decided.

Health care interests may also pursue a new tobacco tax of $2 a pack. Since smokers and tobacco companies are only slightly more popular than ISIS, pundits believe – perhaps naively – that this initiative will pass. (They’ve been wrong before as tobacco taxes are highly regressive.) Or perhaps the “evil” oil companies will be the target in a state where motorists already pay 75 cents a gallon more than the national average. Good luck with that.

Campaigns for initiatives to impose new or higher taxes tend to use happy talk to focus on the benefits to the needy or the general population and ignore the actual goal. For example, Proposition 30, the sales and income tax increase, was sold as a boon to education when, in reality, much of the revenue is needed to keep the teachers’ pension system solvent.

For any tax increases being pushed by special interests, voters should keep in mind that actual beneficiaries tend to be the providers of services – think pay and benefits — not the recipients.

This brings us to another potential initiative with the sympathetic sounding title of “Lifting Children and Families Out of Poverty Act.” The measure would place a property tax surcharge on higher value homes and property.

If this proposal actually reaches the ballot, it will, no doubt be marketed as a tax on the well-off so they can pay their “fair share” to help needy children. Backers of this tax will not mention that, as usual, those receiving the majority of benefits are likely to be the providers of services, not those in poverty. And don’t expect voters to be told about California’s already generous entitlement programs or, even with record spending, the hefty state surplus. The fact that this measure would be the first step in destroying Proposition 13 protections for all property owners, including those of modest means, will be glossed over as initiative promoters use the less fortunate as human shields to justify themselves.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

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Billionaire Tom Steyer Donates $1 Million To Hike Taxes On Smokers And Vapers

November 21, 2015 By Guy Bentley 11 Comments

cigarette smoking ashesBillionaire liberal activist and environmentalist Tom Steyer has donated a cool $1 million to a campaign to raise California’s tobacco tax by $2.

A long-time fundraiser for prominent Democrats such as Hillary Clinton and President Barack Obama, Steyer has turned his attention to making smokers cough up more money for their cigarettes.

“We have a moral responsibility to stand up to tobacco companies and keep kids from becoming lifetime smokers, and we can do that by raising the tobacco tax,” Steyer said in a statement.

But its not only smokers who would be hit if Steyer’s health crusade proves successful. The tax would also cover e-cigarettes, which contain no tobacco and are 95 percent safer than regular smokes.

The campaign to raise the tobacco tax is supported by a number of public health lobby groups like the California Medical Association as well as the California State Council of Service Employees, who have donated $2 million to the effort so far this year.

Supporters of the tax say it will raise $1.5 billion that will be spent on increasing the number of physicians in California. All previous efforts to introduce a tobacco tax in California via ballot initiative have failed. Californians currently pay 87 cents per pack in state taxes.

“Big Tobacco profits from a product that kills millions of people around the world every year and is the leading cause of preventable death in California,” Steyer said. “The best way to prevent these smoking deaths is by protecting children from ever becoming addicted to this deadly product in the first place.”

The polls appear to be in Steyer’s favor with a survey funded by California Wellness Foundation showing 67 percent of voters favored a $2 rise in the state tobacco tax, with only 30 percent opposing the move.

Steyer is the founder and former Co-Senior Managing Partner of Farallon Capital Management, LLC and the co-founder of Beneficial State Bank, an Oakland-based community development bank. Funded by California Wellness Foundation, the survey showed 67 percent of voters favored a $2 rise in the state tobacco tax, with only 30 percent opposing the move.

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Originally published by the Daily Caller News Foundation

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Public Ignorance About E-Cigarettes, In One Awful Poll

November 18, 2015 By Guy Bentley 1 Comment

e-cigaretteThe University of Michigan is dealing bad news to vapers and e-cigarette supporters with a new poll showing stunning support for a raft of new regulations and taxes that could hamper the industry.

The C.S. Mott Children’s Hospital National Poll on Children’s Health showed that 92 percent of parents and 91 percent of teens think e-cigarettes should have health warnings, like traditional cigarettes.

The poll didn’t ask about the addictive nature of e-cigarettes thanks to their nicotine content, but simply whether they should be labeled the same as regular smokes.

The results will puzzle many medical professionals as there is no clear evidence about what the negative health effects of e-cigarettes are. There is, however, a strong consensus that the devices are significantly safer than regular cigarettes. A study by Public Health England concluded e-cigarettes are 95 percent less dangerous than regular cigarettes.

The poll suggested that the vast majority of parents and teens believe using e-cigarettes will encourage smoking among minors, 81 percent and 84 percent respectively. But again, there is little evidence to support this view aside from speculative op-eds.

In fact, a tougher policy on e-cigarettes could have the reverse effect, with one study suggesting states that banned the sale of e-cigarettes to minors actually experienced a rising smoking rate. Every state with the exception of Pennsylvania and Michigan has introduced some form of regulation on the sale of vaping products to teenagers. According to the data, there is also little chance of adults taking up vaping and switching to tobacco.

A study published in Nicotine and Tobacco Research by Rutgers School of Public Health concluded that “e-cigarettes have not been attracting adult non-smokers or promoting relapse in long-term former smokers. Moreover, the data are suggestive that some recent quitters may have done so with the assistance of e-cigarettes.”

The Rutgers authors added that the amount of experimentation with e-cigarettes among adults who have never smoked is “extremely low.” The original National Institute of Health shows that just 0.4 percent of adults who had never smoked tobacco were current vapers, using the device either every day or some days.

One the biggest challenges facing the e-cigarette industry is a skeptical Food And Drug Administration and an outright hostile group of Senate Democrats. Democratic Massachusetts Sen. Elizabeth Warren and others recently demanded stricter regulation of the industry, including an outright ban on flavored e-cigarettes. Critics claim that flavored e-cigarettes will entice children and young people to take up vaping.

A full 64 percent of parents and 71 percent of teens agreed with banning candy or fruit-flavored e-cigarettes, according to the Michigan poll. But Cynthia Cabrera, executive director and president of the Smoke-Free Alternatives Trade Association, told The Daily Caller News Foundation the move will be counter-productive in getting people to quit smoking.

“Flavors also play an important aspect with helping cigarette smokers make the switch, with a recent study published in the National Institute of Health’s National Center for Biotechnology Information confirming that sweet and dessert-type vapor flavors appealed much more to adults than non-smoking teens, and other studies confirming that the variance in flavors were ‘very important’ in people’s efforts to switch to e-cigs.”

But there appears to be no limit to which parents and high schoolers want to treat vapers in the same way as smokers, with 80 and 81 percent respectively supporting taxing e-cigarettes in the same way as regular tobacco.

Cabrera commented that “from a public health and policy perspective, we should be focusing on harm-reduction strategies rather than continuing to demonize a product that has the potential to improve the public health and save health care costs caused by tobacco smoking.”

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Originally published by the Daily Caller News Foundation

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How is Government Spending Hidden Tax Revenue?

August 11, 2015 By Jon Coupal 2 Comments

tax sign​Especially in California, the word “taxpayer” is frequently preceded by the word “beleaguered.” Given our large tax burden and the tragic level of government waste, perhaps there should be a grammatical rule that these two words must always be combined.

While some California taxes are hidden, most are unfortunately and painfully obvious. But the same is not true for the level of wasteful spending by government. The unstated rule of politicians and bureaucrats is that average taxpayers must be kept in the dark about how their money is being spent.

Ask the average man or woman in the street what they think the 87 cent tax on a pack of cigarettes goes to and they will likely respond that it goes for anti-smoking programs – like those scary TV spots – and for health care.

Because of the detrimental impact of smoking on health, most Californians will agree that there seems a logical connection between what is being taxed and how the money is being spent. However, most of the tobacco tax does not go to these programs. Of the 87 cents, 50 cents goes to children’s programs administered by First Five California, a creation of Proposition 10. Now children’s programs may be a great idea, but many ask why these are not funded openly out of the state general fund instead of having the costs hidden inside the tobacco tax.

Ironically, we have seen First Five California objecting to additional taxes on tobacco products because the number of smokers might decrease and thus reduce revenue to their programs. So what we have, in effect, is an agency that is tacitly supporting what they concede is an unhealthful habit, simply because it wants the revenue.

Then there are parking tickets that in cities like Los Angeles can cost more than $60. While parking fines are imposed, in theory, to make spaces available to all motorists, the real motivation is to satisfy the appetite for revenue. Because Los Angeles has some of the highest paid workers in a state that the federal government says has the highest paid government employees in all 50 states, it desperately needs the revenue to support payroll and benefits. This may help explain some of the city’s confusing signage that makes it difficult for drivers to tell when they can park and where.

More confusion that benefits the public sector, and puts taxpayers at a disadvantage.

But state and local governments do not have a monopoly on confusing or hidden taxes, charges and other revenue enhancements.

Enter Congress and the highway bill. The version being considered by the Senate would place a new tax burden on home buyers by increasing the fees Fannie Mae and Freddie Mac charge for their loans. “Not only will it increase the cost of homeownership and make it more difficult for a buyer to purchase a home, it will hinder future efforts at mortgage finance reform,” said California Association of Realtors President Chris Kutzkey.

As bad as that sounds, it is even worse. It is another charge whose purpose is intentionally hidden from the casual observer and where there is a total disconnect between what is being taxed, home loans, and on what the money will be spent, highways. (In California this would be defined as a “special tax” under Proposition 13 and require a two-thirds vote.)

According to the Washington D.C.-based Tax Foundation, America spends more on taxes than on food, clothing and housing combined. In California, the average taxpayer works for government until May 3rd, before they start working for themselves.

It is not too much to demand from politicians that they make clear what taxpayers are being charged and on what the funds are being spent. Maybe then we can remove the modifier “beleaguered” from the word “taxpayer.”

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayerorganization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

Originally published at HJTA.org

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California Senate votes to raise smoking age to 21

June 4, 2015 By Patrick McGreevy and Phil Willon Leave a Comment

As reported by the Los Angeles Times:

The state Senate on Tuesday approved a bill that would raise the minimum legal age for buying cigarettes and other tobacco products from 18 to 21 as part of an effort to reduce smoking by young people.

Sen. Ed Hernandez (D-West Covina) said he introduced the bill, SB 151, out of concern that an estimated 90% of tobacco users start before age 21. Raising the minimum age will mean that fewer teenagers pick up the habit, said Hernandez, an optometrist.

He cited a study done by the Institute of Medicine for the federal Food and Drug Administration that concluded that raising the smoking age to 21 would cut smoking by 12% more than existing control policies. …

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E-Cigs Under Fire From CA Dept. of Public Health

March 27, 2015 By James Poulos 1 Comment

With public opinion in flux and anti-tobacco activists on edge, the California Department of Public Health has rolled out “Wake Up,” a slick new ad campaign to discourage the use of e-cigarettes, or “vapes.” Recently, CDPH pronounced e-cigs a threat to public health.

In a statement explaining the campaign, CDPH described two new TV ads emphasizing “the e-cigarette industry’s use of candy flavored ‘e-juice’” and “exposing the fact that big tobacco companies are in the e-cigarette business.”

The move bolstered momentum for broad crackdowns on vapes, which have been targeted by policymakers and activists who see them as just as bad as tobacco cigarettes — if not worse.

Playing politics

Political considerations have played into CDPH’s adverse judgment against vapes. New data recently showed that, last year, the use of e-cigs outpaced the use of tobacco cigarettes among teenagers and young adults.

Defenders of the freedom to vape argued this is good news. Vaping companies have claimed e-cigs help smokers abandon far more dangerous tobacco products, especially those, like traditional cigarettes, that emit high numbers of carcinogens.

But for prohibitionists, e-cigs presented a special hazard because of their accessibility and appeal to children. As the Los Angeles Daily News detailed, those drawbacks appeared to be the product of unregulated marketing, a more pleasurable use experience and apparent carelessness among adult consumers with children:

“Most startling to health officials was the spike in calls to California Poison Control centers related to exposures to accidental e-cigarette poisonings, including drinking the liquid inside. There were seven calls in 2012 to poison control. In 2014, those calls jumped to 243. More than 60 percent of all those e-cigarette related calls involved children 5 years and under.”

As NBC News reported, “bottles and cartridges that contain the liquid for e-cigs have been known to leak and tend not to be equipped with child-resistant caps, creating a potential source of poisoning through ingestion or just through skin contact.”

Although legislation and regulation could be tailored narrowly to focus on the threat of poisoning, public health officials issued a broad warning that comports with the prevailing view among prohibitionists.

Dr. Ron Chapman, State Health Officer and director of the California Department of Public Health, said that “many people do not know that they pose many of the same health risks as traditional cigarettes and other tobacco products.” In January, hecalled for a “bold public education campaign” to roll back e-cig gains in market share. Anti-smoking advocates working in the policy arena have been all but unanimous in treating e-cigs like an integral part of the same problem as tobacco products.

Safety over freedom

Despite the unfolding research concerning the differences between e-cig effects and those of tobacco cigarettes, prohibitionists in the political arena have used heightened rhetoric of their own to advance vape bans.

Earlier this year, state Sen. Mark Leno, D-San Francisco, underscored how far many officials have been willing to go in departing from the scientific record. In January, he introduced Senate Bill 140, a bill that would ban e-cigs at hospitals, restaurants, schools and workplaces.

“No tobacco product should be exempt from California’s smoke-free laws simply because it’s sold in a modern or trendy disguise,” he warned. Yet, as Reason’s Jacob Sullum observed, e-cigs neither emit smoke nor burn tobacco. Instead, they heat a device which allows the user to exhale a vapor.

SB140 will go into committee hearings this spring, behind a full-steam-ahead approach to cracking down on vapes. As CalWatchdog.com reported previously, the so-called “precautionary principle” — better safe than sorry — has inspired a spate of municipal regulations that treat e-cigs the same way as tobacco cigarettes, despite widespread ignorance and uncertainty as to how the products differ.

Originally published by CalWatchdog.com

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Tax Hikes Loom for 2016 Ballot

December 30, 2014 By Jon Coupal 2 Comments

Although it may seem far in the distant future, there has been a great deal of speculation regarding what ballot propositions might appear on the 2016 General Election ballot in California.  Focusing on just those proposals having the potential for real harm to taxpayers, here is our short list:

SALES AND INCOME TAX EXTENSION — An extension of the temporary sales and income tax increase voters approved with Proposition 30 in 2012 is being advocated by public sector labor leaders.  The proponents will argue that, since Californians are accustomed to paying these higher rates, it should be more palatable to voters to make these tax increases permanent as opposed to some “new” tax.

OIL SEVERANCE TAX — An oil severance tax – taxing petroleum as it is extracted – is likely to be advanced by those who see an opportunity to soak an unpopular industry. They will count on the public not noticing that these taxes will be passed on to California drivers in the form of higher gas prices.

SPLIT ROLL PROPERTY TAX — Those on the far left are salivating over the prospect of an increase in property taxes for commercial property.  This attack on Proposition 13 would split the tax roll so that business property will pay much more. The impact on small business and jobs will be glossed over with the usual platitudes like, “It’s for the children.” They will totally ignore that higher taxes on businesses are passed through to consumers in the form of higher costs for goods and services.

TOBACCO TAX — A tobacco tax is also in the offing.  The state tax on a pack of cigarettes is 87 cents.  Those wanting more tax revenue would like to add another two dollars and will probably also claim it is a blow for public health because it will help smokers quit.  Even if one opposes smoking, it has to be acknowledged that tobacco taxes are highly regressive as well as leading to more black market commerce which, by the way, goes untaxed.

LOWERING OF THE TWO-THIRDS VOTE FOR BONDS AND/OR PARCEL TAXES – Of greatest concern to California homeowners is the possibility that the two-thirds vote requirement for local bonds and parcel taxes will be eliminated.  These levies are repaid only by property owners.  How realistic is this threat?  Considering that, for the first time since Prop 13 was passed in 1978, a house of the California legislature actually passed this anti-13 proposal (ACA 8) the threat is very real.

BAG TAX – The “bag tax” – a charge on single use bags – is actually not a tax increase proposal. Rather, this tax was enacted by the legislature but is now subject to repeal via the referendum power by those opposed to the tax. The tax reflects “nanny government” at its worst.

Here are a couple of observations about this potential tax “tsunami” at the ballot box. First, the threat from anti-taxpayer initiatives is even higher than in prior years because, for 2016, it is much easier to qualify initiative measures generally.This is due to the fact that the signature requirement is based on the most recent election’s voter turnout. 2014’s historically low turnout means that initiative measures now need far fewer signatures to qualify than in previous years.

Second, what happens if all these tax hikes appear on the ballot?  Would this be the ultimate “Dooms Day” for taxpayers?  Perhaps.   But, in an odd way, it might be a positive development. By overreaching and asking for the moon, the tax-and-spend crowd might ensure defeat of all the measures as voters begin to add up how much these proposals, in the aggregate, are going to cost.

Third, while Californians in the last election were fairly generous in passing local tax measures, this does not necessarily translate into support for state tax hikes. Voters’ recent support for Proposition 30, discussed previously, was based on a perceived crisis for education if the taxes were not approved. Plus, the hikes were sold as “temporary.” Those conditions are not currently present. Californians are increasingly aware that we live in a high tax state and resistance to higher taxes will be high for the foreseeable future.

In any event, expect to see the groundwork laid for these and other tax raising initiatives very soon.   It will be important for taxpayers to pay close attention and to keep a tight grip on their wallets.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

This article was originally published on HJTA.org

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