For decades, lawmakers have used the negative health consequences associated with tobacco use as a justification to raise tobacco taxes. In fact, over just the last thirteen years, federal and state governments have raised tobacco excise taxes more than 120 times. The argument has always been that smoking is bad for you, so the government should discourage it by raising costs.
So-called public health advocates claimed the tax hikes were about improving public health. In reality, it was about filling government coffers. Between taxes and the federal Master Settlement Agreement, governments have collected more than $500 billion from tobacco companies for a wide range of spending programs since 1998. However, a new disruptive technology has exposed the fact that many politicians who wanted to raise taxes on cigarettes didn’t care about improving health; they really just wanted more money.
Electronic cigarettes and vapor products that have come on the market in recent years are tobacco-free and don’t contain the tar or countless carcinogens that can produce cancer, illness, and disease. Where some see a new technology that is helping people quit smoking, cash-hungry politicians see a new target to tax.
In 2014, 15 states, along with Democrats in Congress, seriously considered legislation that would have raised taxes on e-cigarettes by as much as 95 percent. In all but one of those states proposals failed because, unlike smokers, vapers stood up for themselves by getting politically active and organizing grassroots movements to kill tax hikes.
It hasn’t been an easy fight. Everyday, junk science is reported as fact by websites and news outlets looking to generate page clicks and television headlines. The New England Journal of Medicine recently tweeted out a letter claming, “Chemical analysis of e-cigs’ vapor show high levels of formaldehyde. Authors project higher cancer risk than smoking.” Even the New York Times attacked such overblown claims as ludicrous and dismissed them as scare tactics.
2015 looks to be another year where such scare tactics will result in a number of bills being proposed in state capitals that discourage or outright ban vaping. Proposals to tax electronic cigarettes like tobacco products have been put forth in Washington, California, Oregon, Utah, Indiana, Connecticut, Ohio, New Mexico, New York, and others.
Washington Gov. Jay Inslee’s (D) new budget bans the sale of vapor products online and imposes a 95 percent tax on products sold in stores. Companies like Mount Baker Vapor, who do a significant amount of online business would be forced to close their doors or leave the state, adversely affecting more than 100 of their employees who live and pay taxes in Washington. As a result, Gov. Inslee’s tax hike would result in forgone revenue.
What’s odd is that even some Republicans have adopted the language of the tobacco-control crowd who have long pushed for tax hikes and spending increases. A spokesman for Utah Gov. Herbert (R) recently remarked, “We don’t want to be in the business of incentivizing” e-cigarettes. Gov. Herbert has called for a tax increase on e-cigarettes in order to discourage kids from buying the product.
Just this week, California Senator Mark Leno (D) introduced Senate Bill 140, legislation that would reclassify electronic cigarettes as tobacco products, even though they contain no tobacco, and assess the regulations that apply to tobacco products, include banning use in certain locations.
“We’re going to see hundreds of thousands of family members and friends die from e-cigarettes use just like we did from traditional tobacco use,” said California Sen. Leno. This claim is absurd and not supported by science. Despite claims from big government politicians like Sen. Leno, there are at least six to seven million daily users of vapor products and not one has died from using the products properly. Not one. It’s ironic that lawmakers in a state that is home to Silicon Valley are going after innovative new technology that is helping people quit smoking and is saving lives.
California Senator Mark Leno
Efforts to tax e-cigarettes and vaping devices could have negative unintended consequences. Raising the cost of e-cigarettes would create a disincentive for smokers to transition to these tobacco-free products. Adult smokers are overwhelmingly low and middle-income consumers, many of which spend a quarter of their income on cigarettes. Increasing the costs of products that stand to improve these peoples’ health flies in the face of the public health initiatives of the past two decades.
John Britton with the Royal College of Physicians says vaping is much safer than smoking tobacco cigarettes. During a BBC radio interview, Britton compared e-cigarettes and tobacco cigarettes on a danger scale, ranking tobacco cigarettes as 100 and e-cigarettes as “under five.”
If all U.K. smokers switched to e-cigarettes, Britton said, “five million lives would be saved just in those who are alive today.” The Economist was correct when it pointed out that the “right approach is not to denormalise smoking, but to normalise e-smoking.”
Because raising the cost of e-cigarettes by even one quarter could discourage a smoker from making the switch to tobacco-free products, tax hikes should be rejected. That should be the standard of review for taxation and regulation on these products. The fraudulent movement to ban, tax, and over-regulate e-cigarettes says a lot about those who take part. It says they’re more interested in protecting the state’s monopoly on cigarette sales than they are in public health.
Patrick Gleason is director of state affairs at Americans for Tax Reform (ATR) and a senior fellow at the Beacon Center of Tennessee. Paul Blair, state affairs manager for ATR, contributed to this article.
