Last election day, Oregon voters overwhelmingly approved a new tax measure on nicotine products in an attempt to reduce the rate of smoking and save its citizens money on healthcare costs. This proposal, also called the Tobacco and E-Cigarette Tax Increase for Health Programs Measure, took effect this year and increased the current excise tax by 10 cents per cigarette ($2 per pack of twenty) and implemented a 65% tax on the wholesale price of vapor products and cigars.
This decision has put smokers in an exceedingly difficult bind. The added costs naturally make harmful nicotine products less affordable, but the current rates as they stand are flawed. The state is taxing the sale of vapor products at a similar rate to tobacco products, even though they are much less harmful than cigarettes and more effective than traditional nicotine-replacement therapies at helping people quit smoking.
If Oregon is serious about cracking down on smoking, it should be taxing e-cigarettes at a lower rate to incentivize Oregon smokers off traditional tobacco and onto electronic substitutes.
According to an evidence review by Public Health England, e-cigarettes are at least 95% less harmful than smoking combustible cigarettes. While not free from harm, vaping products serve as a much better alternative to traditional cigarettes for people who already smoke.
Likewise, a summary published in the Cochrane Library Database of Systematic Reviews surveyed 50 studies in the U.S. and the rest of the world and found evidence that e-cigarettes were more effective in helping people quit smoking than nicotine-replacement therapies and nicotine-free alternatives. The 6-month abstinence rate for those assigned e-cigarettes was 10%, compared with 6% of people assigned nicotine-replacement therapies, and 4% assigned only behavioral support. Unwanted effects associated with the use of e-cigarettes such as throat or mouth irritation or headaches were reported by all groups but reduced over time as participants continued use of e-cigarettes.
Equating e-cigarettes with traditional cigarettes is disingenuous and dangerous. The Center for Disease Control’s (CDC) list of long-term health effects from cigarette smoking is extensive, and e-cigarettes have yet to be proven to cause the same negative effects. E-Cigarettes, however, do contain nicotine, which is addictive, and should be used as a replacement therapy for smokers only. Because the risks of e-cigarettes are inferior to that of traditional cigarettes, Oregon should follow Connecticut, Kentucky, North Carolina, Washington, and Utah who have already added a Modified Risk Tobacco Product (MRTP) provision. An added MRTP provision would allow these products to be taxed at rates more in step with their actual risk.
A lower tax rate on e-cigarettes will incentivize Oregon’s 14% of adults who smoke to choose the less harmful option and will save Oregonians a lot of money on healthcare costs.
Published in The Economic Standard