WASHINGTON—Senate Democrats are dropping a proposal that would have imposed taxes on vaping, removing a $9 billion provision backed by some public-health advocates from the party’s healthcare, education and climate-change bill, people familiar with the matter said.
Lawmakers made the decision as they wrap up the details of the $2 trillion Build Back Better package and attempt to get it through the Senate before Christmas. Sen. Catherine Cortez Masto (D., Nev.), a Finance Committee member in a tough re-election race, pushed to remove the tax and helped force its deletion.
The $9 billion tax increase was included in the bill the House passed last month, and it is much smaller than a broader tobacco-tax increase that House members had advanced earlier in the year. The smaller version would have imposed a tax on vaping products designed to parallel the existing federal cigarette tax rate of $1.01 a pack. Under the House-passed plan, e-cigarettes, vaping liquids and oral nicotine pouches would have been taxed.
All of the tax increases on tobacco and nicotine drew objections from Republicans, who said the burden would fall on lower-income and middle-income households. Many of the proposals would have affected people with incomes below $400,000, the cutoff below which President Biden said Americans wouldn’t face tax increases.
In a statement, Ms. Cortez Masto pointed to the impact the tax could have on people with incomes below $400,000. She has also opposed Democratic proposals on mining and changing how unrealized capital gains are taxed.