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Are Taxes On E-Cigarettes In The US Climbing?

For years, concerned persons in the public health sector have been lobbying for higher tobacco taxes. This is in keeping with trying to lower the amount of smokers that pose a risk to themselves because of cigarette smoking. However, now public health lobbyists are going after e-cigarette smokers as well by lobbying for an increase of tax on the e-product. Some of the best electronic cigarette companies are now facing a prospective hike in taxes and electronic cigarette review websites are combing for information to report to the public. In the meantime, while taxes is a growing concern for key players in the tobacco niche, some of the best e-cigarette products are still making waves in the market.

Lobbyists in the US who want to decrease smoking are concerned about the growing needs of tobacco and e-cigarette smokers that are buying the products, thus, turning the market into an extremely lucrative industry. In the past, cigarette "sin" taxes have increased proportionately to try to discourage the use of nicotine. Smokers who decided to brave the storm and continue smoking found they had to pay more over to the government if they want to continue enjoying the practice of puffing a traditional cigarette.

While lobbyists are trying to do their job, which is to raise e-cig taxes, the public is doubtful and often wondering if this is a ploy to take money out of the hands of the consumers and put it into government funds. Consumers saw this played out when President Barack Obama went against his own promise of not charging any taxes to citizens of the US who are earning under $250,000 yearly. After he took over the presidency of the US, Mr. Obama signed a statement giving the go ahead for an increase of 156 percent to go on federal cigarette tax. Although e-cigs were exempted from paying increased taxes over to the government, some $500 billion was lost to the government because of the growing increase of change over from traditional tobacco smoking to e-cig smoking by some smokers whom later view themselves as the best electronic cigarette smokers to be smoking e-cigarettes. Since the sharp increases of tax over the years on traditional tobaccos, many smokers started turning to e-cigs as a way to cut back on expenses.

States are seeing financial loses mounting up each time an e-cigarette smoker buys the item and this is a matter of concern to legislators. Take for example Michigan State that loses $2 from each sale of e-cigarettes, Illinois loses $1.98 and New York is out by $4.35 all because of the sale of e-cigs. Whenever big spenders in state capitals buy any of the best e-cigarette brands, financial losses mount up for those states.

Since e-cigarette sales are mounting, legislators are trying hard to bridge the gap. Today, legislators are spending time around the negotiating table by taking a closer look at how the e-product industry has grown and is trying to bring about an electronic cigarette review process that they hope will eventually address the situation.

Most revenues from traditional tobacco sales in the US go towards paying transportation issues, education concerns and pensions for public employees as well as other interests in the nation. Since 2014, many states are seriously looking into the benefits of applying taxes to e-cigarettes sales because of the billions in revenue that is at stake. To pull in some revenues from e-cigs, legislators are discussing charging a 95 percent tax that will see the e-product putting in money into the pot. Recently, the governor in Ohio known as Governor Kasich is giving out sounds about imposing a 700 percent tax on all e-cig products.

Many of the best e-cigarette consumers are already fed up with government intervention into the market. So far, they are taking a "leave me alone" attitude in the hope that the authorities will slacken their intention to tax the products. In the past before e-cigs hit the market, health officials used to try to reach smokers by asking them to give up cigarette smoking or at least cut back on the amounts smoked each day or week. These health workers would attempt to introduce to smokers such things as a patch or gum, which in some cases proved a bit helpful for short-term bases but in the end did not last.

Big Tobacco is turning to e-cigs sales in order to enjoy a greater profit margin as well as a large part of the e-cigarette market. The company's strategy to dominate the channels of distribution by taking over Altria Group Inc. (NYSE:MO) and Reynolds American Inc. (NYSE:RAI) might just prove to be a winner for them.

The e-cig industry in the US stands at about $3 billion because of the many smokers residing there. So well positioned is the e-cig business that recently the Electronic Cigarettes International Group (ECIG) residing in Grand Rapids, which is a trader dealing with over-the-counter stocks is looking forward to arranging a $150 million public offering of common stocks in keeping with the company's listing on the NASDAQ.

So far, ECIG, which has a $325.85 million in market capitalization, has filed a registration statement with the Securities and Exchange Commission and is still awaiting a response for the offer to become effective. ECIG shareholders are looking to offer to the public about 4,890,200 common stock shares while the company will provide the balance. Underwriters have the option of purchasing common stocks of up to $22,500 million if they so desire.

While legislators continue their electronic cigarette review process, still, they are lobbying for the traditional tobacco industry to start paying higher taxes, which puts pressure on smokers to turn to e-cigs for their continuous enjoyment of smoking. So far, some of the best electronic cigarette companies CEOs are keeping their fingers crossed and hoping that e-cigs will not come under much taxation in the future. While many consumers view the products as being among some of the best e-cigarette brands on the market that should not come under heavy taxation, they are in the meantime voicing their concern to the proper authorities by forming lobbying groups and attending rallies. Still other consumers are taking the approach of wait and see as to what law the legislators will introduce next.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.