E-cigarettes or vaping has been in the news with reports of serious lung illnesses and deaths. President Trump is proposing restrictions on vaping products and several states have laws on vaping. Vaping has been restricted in Arkansas too. Earlier this year the Arkansas legislature passed a law prohibiting anyone younger than twenty-one (21) from purchasing vaping products, unless the person is in the military.[i]
The debate has heated up and will focus on what extent the government should add more restrictions on a practice that, at least in Arkansas, is legal only for adults. Some say more restrictions will have serious health consequences by driving more people back to smoking tobacco. Some in the e-cigarette business claim the health problems are not from their products but from the use of illegal THC oils, which are derived from marijuana. Advocates of legalizing marijuana have also jumped into the debate to claim legalization of marijuana is safer than vaping THC.
Health concerns and personal freedom would make an important topic, but this article is NOT about that. Nor is this article about liking or disliking vaping.
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This article is about Senator Jim Hendren and his effort to capitalize on the vaping health issue as yet another excuse to raise taxes. Is this a case of – never let a good issue go untaxed?
Earlier this year Senator Hendren tried to pass SB571 to impose a new tax on e-cigarettes and increase taxes on cigarettes.[ii] The Department of Finance and Administration estimated the part taxing e-cigarettes would bring in an additional $5.56 Million. Hendren wanted to use the new taxes cigarettes and e-cigarettes to establish a low-income tax credit. His low-income tax credit wasn’t really a credit against taxes paid. It would have been a redistribution of wealth bill and had nothing to do with whether the person paid any taxes.
The title of the bill starts out with “AN ACT TO CREATE THE SCHOOL SAFETY ACT.” What have schools got to do with it? Arkansas already prohibits the purchase of e-cigarettes if you are under twenty-one (21). Do we have a bunch of twenty-one-year olds going to high school? No.
Hendren wraps his tax bill in the flag of school safety by including a section saying the money is to be used by the “Department of Education to fund school facility safety improvements, security equipment, security personnel, and mental health counselors for students with an addiction or other mental health issue.”
That does NOT mean the schools will spend any more money on school safety since any money already being used for that purpose can be diverted.
Nor does it mean YOUR school will see any of the new tax money. The Arkansas Secretary of Education will set the rules, and those rules could provide school safety grants. What do you think? Will schools favored by Hendren and his uncle, Governor Asa Hutchinson, get all the money? If grants are used will it be yet another growing government plan with schools having to come up with money to match the grant? Remember it was Senator Jim Hendren who passed Act 808 of 2019 which raided your Homestead Property Tax Relief Fund to take $8 million of your funds and he gave it to grants for county voting systems but then Pulaski County had to turn down the grant money because they didn’t have the matching money.
Earlier this year Hendren wrapped his e-cigarette tax bill in the flag of redistribution of wealth. It didn’t work. Now he has wrapped his tax on e-cigarettes in the flag of school safety. If that doesn’t work what is next – an e-cigarette tax wrapped in the flag of caring for kittens and puppy dogs?
His draft bill should be two separate bills. One bill on vaping regulations to be debated by the Public Health Welfare and Labor Committee up or down. The other bill should be only on taxes and to be debated by the Revenue and Tax Committee.
But don’t expect him to divide the bill. Why not? By combining the two separate issues it gives legislators more excuses to vote for the bill. Some legislators will claim they voted for the bill not because of the tax but because of the vaping restrictions. Others will say they voted for the bill to raise money for school safety but didn’t like the restrictions or taxes in general. You think we are kidding? Senator Bob Ballinger is already testing this message.
For Senator Hendren (a Republican), the raising several taxes this year just wasn’t enough for his appetite.
- It wasn’t enough for him that Act 822 added an internet sales tax YOU pay when you buy from an out-of-state seller.
- Nor was it enough for him that Act 416 raised the tax on gasoline and diesel fuel.
- Nor was it enough for him that Act 550 raised the fee on cell phone service.
- Nor was it enough for him that Act 788 raised water bill fees.
- Nor was it enough for him that Act 580 increased the cigarette paper tax and repealed the border city cigarette tax exemption.
- Nor was it enough for for him for the legislature to propose putting a ½ % sales tax for highways and roads on your 2020 ballot through passage of HJR 1018.
Hendren wants a tax on e-cigarettes and wants to use the tax money for some purpose, any ole purpose will do. Guess he thinks – What is one more tax in addition to the taxes these retailers already pay, such as a sales tax, employment taxes, income tax, property tax, etc.
If Hendren get his e-cigarette tax, despite all the other taxes passed this year, then the question becomes – Who or what will he insist on taxing next?
Be thankful I don’t take it all
Cause I’m the taxman
Yeh! I’m the taxman
Yeh! I’m the taxman
Oh! I’m the taxman