After reducing the tax burden, lawmakers in Washington State are aiming to tax e-cigarettes and vaping devices. House Bill 1863 originally applied a 95 percent wholesale tax on vapor products, but it has since been amended to reduce the tax to 60 percent. Lawmakers are hopeful the draconian tax would discourage e-cigarette use among youths.
Although these Evergreen State lawmakers’ intent is laudable, there is no evidence vaping taxes discourage youth e-cigarette use.
Lawmakers are also seeking to provide tax parity between tobacco harm reduction products and combustible cigarettes, even though existing research shows e-cigarettes are significantly less harmful than tobacco and should not be subjected to sin taxes that might discourage their use among current adult smokers.
Despite fearmongering headlines, e-cigarettes are much safer than combustible cigarettes. In 2015, Public Health England, a leading health agency in the United Kingdom, found e-cigarettes are 95 percent safer than traditional cigarettes. Since then, other public health groups have noted the reduced harm of e-cigarettes, including the Royal College of Physicians, the National Academies of Sciences, Engineering, and Medicine, and the American Cancer Society. Even Mitch Zeller, director of the Center for Tobacco Products at the U.S. Food and Drug Administration, has noted that people switching from combustible tobacco cigarettes to vaping products “would be good for public health.”
Washington State lawmakers should also know that vaping taxes passed in other states have caused significant economic harm. In 2016, Pennsylvania enacted a 40 percent wholesale tax on vaping products. The tax led to the closure of 120 small businesses within just one year, and it had no effect on youth vaping, which increased after the tax was implemented.
According to the 2015 Pennsylvania Youth Survey (PAYS), 15.5 percent of middle and high school students reported using an e-cigarette within the past 30 days. In 2017, PAYS found this increased to 16.3 percent of middle and high school students reporting past 30 day use of e-cigarettes. Notably, e-cigarette use among 10th and 12th graders increased from 20.4 and 27 percent respectively, in 2015, to 21.9 and 29.3 percent of 10th and 12th graders reporting e-cigarette use in 2017.
Moreover, it’s important to note the proposed tax would not necessarily be used to help smokers quit or educate youths on tobacco use. Although 75 percent of the revenues received by the proposed tax would be deposited into a newly created “Essential Public Health Service Account” in the 2019–21 biennium, there is no set funding requirement mandating these tax revenues go toward tobacco prevention and cessation. The state currently dedicates very little money to such efforts. In 2018, Washington State received an estimated $563 million in tobacco settlement payments and taxes, yet in the same year, the state dedicated just $1.4 million—less than 2 percent of tobacco moneys—on tobacco prevention and cessation programs.
Rather than taxing tobacco harm reduction out of existence, Washington State lawmakers should reform how the state currently spends its tobacco funds. E-cigarettes are a proven smoking cessation tool, one that has helped millions of American adults quit using tobacco cigarettes. Their use should be encouraged, not thwarted with draconian taxes.
The following documents provide more information about e-cigarettes and tobacco harm reduction.
Vaping, E-Cigarettes, and Public Policy Toward Alternatives to Smoking
For decades, lawmakers and regulators have used taxes, bans, and burdensome regulations as part of their attempt to reduce the negative health effects of smoking. Recently, some have sought to extend those policies to electronic cigarettes. This booklet from The Heartland Institute urges policymakers to re-think that tax-and-regulate strategy. Policymakers should be mindful of the extensive research that supports tobacco harm reduction and understand bans, excessive regulations, and high taxes on e-cigarettes often encourage smokers to continue using more-harmful traditional cigarette products.
Research & Commentary: Vaping Taxes and Bans Hurt Smokers Trying to Quit
In this Research & Commentary, Heartland Institute Senior Policy Analyst Matthew Glans and State Government Relations Manager Lindsey Stroud examine vaping bans and taxes and consider how such measures block or limit what is for many smokers an effective method for halting the use of tobacco cigarettes.
Research & Commentary: Randomized Trial Finds E-Cigarettes Are a More Effective Smoking Cessation Tool than Nicotine Replacement Therapy
In this Research & Commentary, Lindsey Stroud, a state government relations manager at The Heartland Institute, examines a study in The New England Journal of Medicine that shows e-cigarettes and vaping devices are twice as effective as nicotine replacement therapy (NRT) in helping smokers quit using tobacco cigarettes. Nearly 700 participants were studied during a 52-week period. Researchers found that 18 percent of e-cigarette users reported abstinence, compared to 9 percent of those using NRT. Stroud wrote that “these latest findings provide more valuable information on the public health role that e-cigarettes and vaping devices provide for the 38 million cigarette smokers in the United States,” and she implores policymakers to regulate these devices in a way that promotes, rather than prohibits, their use.
Research & Commentary: Vaping Taxes Do Not Deter Youth Use of E-Cigarettes
In this Research & Commentary, Lindsey Stroud, a state government relations manager at The Heartland Institute, examines the effects of Pennsylvania’s 40 percent wholesale tax on youth vaping, enacted in 2016. Using data from the Pennsylvania Annual Youth Survey, Stroud found the tax did not curb youth e-cigarette use. In fact, from 2015 to 2017, use of e-cigarettes by young people increased in Pennsylvania.
Research & Commentary: Despite Scientific Evidence, More Americans Believe E-Cigarettes Are as Harmful as Tobacco Cigarettes
In this Research & Commentary, Lindsey Stroud, a state government relations director at The Heartland Institute, discusses a 2019 study that found the number of Americans who believe e-cigarettes are just as harmful as tobacco cigarettes has increased. Stroud says state legislation that regulates, taxes, and even prohibits e-cigarettes have helped to fuel Americans’ misperceptions and urge lawmakers to move forward with legislation that promotes the use of e-cigarettes as an important tobacco harm reduction tool.
Research & Commentary: Largest Vaping Survey Finds Flavors Play Important Role in Tobacco Harm Reduction
In this Research & Commentary, Heartland State Government Relations Manager Lindsey Stroud examines a survey of nearly 70,000 adult vapers in the United States. The survey was completed in response to the U.S. Food and Drug Administration’s recent Advanced Notice of Proposed Rulemaking seeking comment on the role of flavors in tobacco products. The authors found nearly 95 percent of survey respondents were at one time smokers and the majority reported using flavors at the point of e-cigarette initiation. Stroud compares this to other surveys. She concludes, “eliminating flavors will force [vapers] to vape only tobacco-flavored e-cigarettes, which would likely cause them to return to combustible cigarettes.” Stroud also found research has found e-cigarettes are a key tobacco harm reduction product and could help alleviate state budgets by mitigating health care costs.
Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit the Budget & Tax News website, The Heartland Institute’s website, our Consumer Freedom Lounge, and PolicyBot, Heartland’s free online research database.
The Heartland Institute can send an expert to your state to testify or brief your caucus; host an event in your state; or send you further information on a topic. Please don’t hesitate to contact us if we can be of assistance! If you have any questions or comments, contact George Jamerson, director of government relations, at [email protected] or 804-317-8837.