E-Cigarette Taxes Keep Smokers Smoking

The Tobacco Tax Equity Act of 2021 (TTEA) was introduced at the end of April in both Houses of Congress by U.S. Senators Dick Durbin (D-IL).Ron Wyden (D-OR), and Representative Raja Krishnamoorthi (IL-D-08). If passed, the bill would establish new tax rates on both e-cigarette and tobacco products potentially causing an increase in the smoking rate among American adults.

TTEA would equalize tax rates on all tobacco products including e-cigarettes, which are currently untaxed at the federal level whereas combustible cigarettes are taxed at just over one dollar per pack. TTEA’s proponents claim imposing an equal rate to tobacco products on e-cigarettes “would help reduce youth tobacco use” by increasing the cost of e-cigarettes, making them more unaffordable for young people.  

By equalizing tax rates on tobacco products and vapes, the bill’s proponents also hope to disincentivize smoking in America more generally and improve “public health for generations to come.” The Center for Disease Control (CDC) estimates that 34.1 million American adults currently smoke cigarettes and around 8 million adults use e-cigarettes.

While the motive to improve the health outcomes of smokers should be commended, equalizing tax rates for e-cigarettes and harmful tobacco products would have the opposite effect. Levying taxes on electronic cigarettes would only discourage adult smokers from choosing these less harmful alternatives and proven smoking cessation devices. Congress should recognize the health benefits vapes can have for smokers and set a tax rate that is proportionate to their harm.

Research has shown that taxes on e-cigarettes do little to deter initiation among young adults. A 2021 study published in the National Library of Medicine found that e-cigarette excise taxes “were not associated with decreasing prevalence of youth e-cigarette use.” Another study from the National Library of Medicine published a year prior corroborated the findings.

Despite taxes not deterring younger vapers from using electronic cigarettes, high taxes on e-cigarettes would force millions of adults to switch to more harmful traditional tobacco products. A study conducted by researchers at Georgia State, Temple University, and the University of Kentucky in 2020 concluded that a $1.65 per milliliter national tax on vaping liquid would translate to “2.5 million extra adult daily smokers.” A new federal tax on e-cigarettes in the TTEA would have a similar effect and push smokers away from e-cigarettes to these more harmful products.

Research has shown e-cigarettes to be a much healthier alternative to tobacco products. A study from Public Health England in 2015 concluded that vapes are at least 95% safer than traditional cigarettes. Similarly, an analysis from the Georgetown University Medical Center showed that smokers switching to e-cigarettes could save 6.6 million lives over the next ten years. Incentivizing the use of vapes would be a more efficient harm reduction strategy than imposing taxes.

In addition to being safer than traditional tobacco products, e-cigarettes have also shown success as a cessation device. A recent study from King’s College London published in March 2021 discovered that people who used e-cigarettes daily were “five times more likely to achieve abstinence from tobacco smoking for one month than those using no quitting aids at all.”

Vapes are even more effective at helping people quit than other therapies. A summary published in the Cochrane Library Database of Systematic Reviews concluded that the use of e-cigarettes prevented 67% more smokers from returning to cigarettes than those using nicotine-replacement therapies such as patches or gum. Imposing federal taxes on e-cigarettes would make vapor products less affordable for those trying to quit, especially for lower-income smokers.

Americans below the poverty level are nearly twice as likely to smoke than Americans at more than twice the poverty level, according to the CDC. Several studies published by the CDC and BioMed Central, a U.K. based peer-reviewed journal, have shown strong evidence that reducing the cost of cessation therapies increases quit rates among smokers. New taxes on a friendly cessation device like e-cigarettes would significantly increase the cost of quitting through the use of vapes for all demographics. Those affected the most by a cost increase for electronic cigarettes would be those at the lowest incomes, making the TTEA highly regressive.  The TTEA would be devastating to the health of American consumers. Raising tax rates on e-cigarettes to the level of tobacco products would dissuade smokers from purchasing vapes, which are safer and highly effective at helping smokers quit. Instead of equalizing the tax rates on e-cigarettes and tobacco products, Congress should aim to tax e-cigarettes at a rate proportional to the harm they pose to consumers. Doing so would ensure consumers are motivated to make the best choice for their health.

FacebooktwitterredditlinkedinFacebooktwitterredditlinkedin