What’s Proposition EE: Tobacco and vaping tax

Proposition EE asks voters to approve a phased tax increase on tobacco products and a new tax on vaping products such as e-cigarettes. The tax on a pack of cigarettes, currently 84 cents, would increase to $2.64 by 2027. Other tobacco products’ taxes would increase to 22% of the manufacturer’s list price by 2027. Nicotine products would be taxed 62% of the manufacturer’s list price by 2027. Revenue would go toward public education, universal preschool, and vaping cessation and educational programs.

The case for: Funding from the taxes would go to children’s health and education efforts and help public education, which has been underfunded for years in the state. The tax on nicotine products is seen as a way to at least partly address Colorado’s teen vaping problem and the tobacco tax increase as a way to curb adult and teen smoking. Higher taxes are expected to decrease consumption.

The case against: Small businesses worry that approval of the measure would put them out of business but keep big tobacco companies up and running. Tobacco taxes tend to disproportionately affect people from lower-income households. Some also argue that a recession isn’t the right time for a tax increase. The revenue would decrease over time and the state shouldn’t be relying on this source for education funding, opponents say.

Ballot question: “Shall state taxes be increased by $294,000,000 annually by imposing a tax on nicotine liquids used in e-cigarettes and other vaping products that is equal to the total state tax on tobacco products when fully phased in, incrementally increasing the tobacco products tax by up to 22% of the manufacturer’s list price, incrementally increasing the cigarette tax by up to 9 cents per cigarette, expanding the existing cigarette and tobacco taxes to apply to sales consumers from outside of the state, establishing a minimum tax for moist snuff tobacco products, creating an inventory tax that applies for future cigarette tax increases, and initially using the tax revenue primarily for public school funding to help offset revenue that has been lost as a result of the economic impacts related to COVID-19 and then for programs that reduce the use of tobacco and nicotine products, enhance the voluntary Colorado preschool program and make it widely available for free, and maintain the funding for programs that currently receive revenue from tobacco taxes, with the state keeping and spending all of the new tax revenue as a voter-approved revenue change?”

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