If passed this proposition will raise the excise tax – the tax levied on wholesalers – by $2.00 for tobacco products in addition to existing excise taxes, and will inaugurate similar excise taxes for e-cigarettes. On all three categories the final excise tax will be $3.37 per item. Because of the price increase of the retail item, it will also raise sales taxes based on higher cost. Increased revenue will provide $1-$1.4 billion but potentially less over time with a reduction in tobacco and possibly e-cigarette use.
The distribution of funds will be in part to replace funds lost by smoking and nicotine product reduction such as First Five childhood programs, then to state and local health programs including Medi-Cal, Public Health, etc. with other revenues to physician training to increase the numbers of primary care and emergency room physicians. Some revenue will go to the state Tobacco Control program to reduce smoking and also to school programs also designed to end use of tobacco by young people. Some funds (5% after revenue replacement is distributed) will be directed to administration of the tax and $48 million to agencies enforcing tobacco-related laws.
This excise tax places some of the costs of care on those who use tobacco and other products to offset the costs of tobacco-related diseases and impacts of users. Higher “sin taxes’ have always been a useful strategy for reducing addictive practices but do have the consequence of also limiting long-term income to the state and agencies supported by the revenues. However, the benefits in overall improved health offset the inherent flaw of income reduction in both diminished health costs and improvement in human well being.
The distribution of funds will be in part to replace funds lost by smoking and nicotine product reduction such as First Five childhood programs, then to state and local health programs including Medi-Cal, Public Health, etc. with other revenues to physician training to increase the numbers of primary care and emergency room physicians. Some revenue will go to the state Tobacco Control program to reduce smoking and also to school programs also designed to end use of tobacco by young people. Some funds (5% after revenue replacement is distributed) will be directed to administration of the tax and $48 million to agencies enforcing tobacco-related laws.
This excise tax places some of the costs of care on those who use tobacco and other products to offset the costs of tobacco-related diseases and impacts of users. Higher “sin taxes’ have always been a useful strategy for reducing addictive practices but do have the consequence of also limiting long-term income to the state and agencies supported by the revenues. However, the benefits in overall improved health offset the inherent flaw of income reduction in both diminished health costs and improvement in human well being.
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