“[Alex] Brill said that the good news was that the clinical evidence clearly indicated that e-cigarettes were less risky substitutes for conventional cigarettes.
‘Given that a core objective of the European Commission Tobacco Products Directive is to ensure “a high level of health protection for European citizens”, the proper tax to levy on e-cigarettes should be self-evident: none,’ he wrote.”
As cigarette use decreases, it may be tempting to supplement declining tobacco tax revenues with a tax on e-cigarettes — a relatively new, less risky alternative to traditional cigarettes. Following actions by some European nations, the European Commission is now contemplating the proper tax treatment of e-cigarettes and has just finalised a public consultation on the topic. Taxing e-cigarettes would have a negative effect on nascent, but important, public health gains.
Talk last week about President Trump’s tax reform plan had two themes: The plan is too vague, and it is too costly. In other words, we don’t know what it is, but we know what it costs.
Despite Congress and President Trump needing to fill in many blanks, it is possible to analyze the economic effects of the elements that have been announced. And it is worthwhile to compare these effects to both current law and the more detailed House Republican tax plan.
