Prop 56 raises the excise tax on tobacco products by $2.00 per pack to bring it to $2.87. An excise tax is a tax on a specific good. Also, the excise tax on products classified as “other tobacco products” will increase by $2.00 to $3.37. E-cigarettes, which are not currently tax will now be taxed at $3.37. The revenue raised by the proposition will mostly go towards services related to Medi-Cal, with the remaining 13% going towards tobacco-related prevention programs and early childhood development programs.
A YES vote enacts a larger excise tax on cigarettes and other tobacco products, as well as enacting a new excise tax on E-cigarettes which never existed before. This would raise an estimated $1.3 – $1.6 billion in revenues for Medi-Cal and other health programs.
A NO vote maintains current taxes on cigarettes and other tobacco products. E-cigarettes will continue to not have an excise tax.
For more detailed information please see the state’s Legislative Analyst’s Office’s explanation: www.lao.ca.gov/BallotAnalysis/Proposition?number=56&year=2016