Imposing High Taxes on E-cigarettes Misses the Bigger Picture
Despite academic research showing e-cigarettes are 95 percent less harmful than combustible cigarettes, lawmakers and public health “advocates” continue to wage a war on vaping, pushing for higher taxes on e-cigarettes throughout the U.S.
And it’s working. Illinois and Vermont recently enacted higher e-cigarette taxes, joining ten other states that have enacted similar tax hikes since 2010. Some cities – including Chicago and D.C. – have recently implemented vaping taxes, too. The goal is to make e-cigarettes as expensive as combustible cigarettes. "We are trying to keep the tax across all nasty things the same," explained a Vermont lawmaker.
But in seeking to discourage e-cigarette sales through onerous taxes, policymakers have lost sight of the bigger picture and ignored the economic and public health benefits of e-cigarettes as smoking cessation aids.
A recent randomized study suggests that vaping is twice as effective as other nicotine replacement therapies at getting smokers to kick the habit. Today, e-cigarettes are the most popular smoking cessation device in the U.S. And while e-cigarettes do carry health risks, a growing number of health organizations, including the Royal College of Physicians, National Academies of Science, Engineering, and Medicine, and American Cancer Society, have acknowledged that vaping is far safer than smoking and can play a role in tobacco harm reduction.
With 480,000 dying of smoking-related diseases each year, policymakers should be jumping at the chance to mitigate the scourge of cigarette smoking.
The payoff could be enormous. A 2018 study in the journal Tobacco Control projected that if cigarette use in the U.S. were largely replaced by vaping over a 10-year period, as many as 6.6 million premature deaths would be averted and the lifetime smoker would live 6 months longer.
Happily, smokers are already turning to e-cigarettes as a safer source of nicotine. Government surveys revealed that 2.6 million former smokers were vapers in 2016, suggesting that e-cigarettes have already done a lot of good at helping smokers quit. And as the popularity of vaping surged over the last five years, smoking rates dropped to historic lows, providing further evidence that e-cigarettes are replacing more harmful tobacco products.
High taxes on e-cigarettes will deter current smokers from switching to these safer alternatives. Economists estimate that a 10% increase in price reduces sales of disposable e-cigarettes by approximately 12%, and by about 19% for reusable e-cigarettes.
Smoking initiation through vaping is a fringe phenomenon (only 0.3 percent of non-smoking adolescents regularly vaped in 2015), and there are better, targeted ways of preventing teen vaping than blanket tax increases. Current and former smokers are by far the largest group of e-cigarette consumers, and making it more expensive for them to vape is the wrong approach.
Taxpayers and the public also stand to benefit from smokers transitioning to vaping. Smoking results in nearly $170 billion in direct medical spending and more than $156 billion in lost productivity. Secondhand smoke alone accounts for more than 40,000 deaths annually. Medicaid is estimated to save $2.8 billion over 25 years from every 1 percent of smokers who permanently switch to e-cigarettes.
The bottom line: If policymakers are serious about curbing the high economic and human cost of smoking, they should not enact high taxes on e-cigarettes that hurt smokers trying to live healthier lives.
Liam Sigaud works on economic policy and research for the American Consumer Institute, a nonprofit educational and research organization. For more information about the Institute, visit www.TheAmericanConsumer.Org.