Washington State's House Bill 1416 and Tobacco Tax Increases

Currently in consideration, Washington State's House Bill 1416 would raise tobacco taxes—exacerbating those levied on cigarettes, cigars, and vape products. The main intention of this bill is to increase funding for public health and investments in cancer research, a cause certainly worthwhile. But this catch-all legislation goes further than necessary to lump premium cigars in with cigarettes and vape products for regulatory purposes—a very real misunderstanding of the pattern of consumption of tobacco, which seriously threatens the culture and economy built upon premium tobacco.

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A One-Size-Fits-All Approach That Falls Wide of the Mark

Perhaps the most unsettling characteristic of the bill regarding taxation treats premium cigars no differently from cigarettes or e-cigarettes.

The proposal would tax cigars at 95% of their sales price, up to $0.72 per cigar, up from the current $0.65, a marginal increase. But that relatively small-sounding tax rate could be a sledgehammer blow to the premium cigar market, which differs in several important ways from the cigarette and vaping markets. However, unlike cigarettes, which are used habitually and sometimes by younger people, premium cigars are for occasional use, typically by an adult consumer who also enjoys the artistic and cultural qualities of the product. Premium cigar smoking is not a widespread habit among minors or younger people, and it does not pose the same public health risks as frequent cigarette smoking or vaping.

The Economic and Cultural Impact

The Premium Cigar business is significant to the Washington State economy and culture. The small businesses engaged in premium cigars provide jobs for people but, more importantly, also a community gathering place for consumers who will smoke tobacco products in a far more controlled, responsible fashion.

This is the very tax increase that has the potential to decimate such small businesses by forcing them either to absorb the increased costs or pass them on to consumers, both of which could lead to a decline in sales and the possible closure of these shops.

Premium cigars are not a commodity but part of the cultural tradition that goes back many years. They are smoked in social settings, from celebrations to quiet moments, and on many other occasions. Forcing these products into a blanket taxation with cigarettes and vaping products disproportionately burdens consumers who engage them in a completely different way, often with a greater sense of responsibility and moderation.

A Call for Nuanced Policy Making

Premium cigars have unique characteristics and should, therefore, be subject to a more tailored approach to taxation, one based on actual usage of the product. Premium cigars are not cigarettes and should not be taxed as such. Neither should they be placed under the same legislative heading as vapor products. A better thought-out policy would differentiate the regular, everyday pattern of consumption of cigarettes and the less habitual, more occasional use of premium cigars. This approach would be much fairer to consumers and better reflect the relative public health risks associated with each product. The current proposal, as it stands, unfairly targets a specific segment of tobacco users, ignoring their differences from cigarette and vape users.

A Misstep That Needs Correction

Washington's HB 1416 does have merit in providing additional funding for public health and cancer research, but it fails to continue this differentiation between premium cigars and other tobacco products. That is a severe setback in the policy, one in which legislators will need to revisit with a more nuanced view of the nature of premium cigars before passing tax hikes that harm small businesses and overburden responsible consumers.

In all, if Washington is to have any hope of forging an effective public health strategy, it will need policies reflective of the diverse tobacco products and their users—not a one-size-fits-all solution serving none of the constituencies equitably.

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