Its no secret one of the driving forces behind state law makers all out war on vaping is the loss of tax revenue. Tobacco taxes are a massive money maker for federal and state government, generating billions a year.
The federal government alone collects over $15 billion a year from tobacco taxes. In fiscal 2015 it is estimated state governments will collect a combined $25 billion annually from tobacco excise taxes. Some states in particlar have sky high taxes attached to cigarette purchases, in New York state the tax alone for a pack of cigarettes is $4.35. Ironically with the $25 billion collected by states, they will only spend a combined $490 million on smoking prevention and cessation programs. Which as we noted $70 million of which will be allocated towards the ridiculous anti vaping propaganda that has arisen this year.
Although tobacco is a major money maker for the government, the resulting health care cost of smoking is exponentially greater. Smoking related illnesses account for $170 billion a year in health care costs. Over $80 Billion of which is paid for by our medicare and medicaid system, along with an additional $23 Billion a year spent by the VA fund.
To put that in context, the average median price for a pack of cigarettes is $6.35 but the total health care cost per pack sold is $35.
According to a new study by Scott J. Moody a leading contributor for State Budget Solutions, Vaping could potentially save our medicaid system billions a year. Using data from 2012, Moody`s research concluded “ The potential savings of e-cig adoption, and the resulting tobacco smoking cessation and harm reduction, could have been up to $48 billion in 2012. This savings is 87% higher than all state cigarette tax collections and tobacco settlement collections ($24.4 billion) collection in that same year.”
Law makers continue to cite the rise of vaping among underage children the real reason they have set the vape industry in their cross hairs. Yet as we have pointed out, the data also shows underage smoking rates to be in single digits for the first time in a generation and continuing to decline.
The healthcare savings greatly exceeds the tax revenue lost, not to mention the number of lives which would be saved. Along with siphoning off the $70 billion a year in cigarette profits from big tobacco into the hands of vape industry entrepreneurs who are creating jobs.
Then again, it seems like given the state of our government, expecting rational and logic is too much to ask for in this day and age. Perhaps when the vape industry fills the pockets of politicians the same way big tobacco does, they`ll finally see reason.