Research & Commentary: Washington State’s Tax Proposal Ignores E-Cigarettes’ Public Health Benefits

Published February 5, 2018

Legislators in Washington State are considering a proposal to implement a 60 percent floor tax on vaping and e-cigarette products. The monies raised by the levy would “help offset lost revenue from any legislation that raises the legal smoking age,” according to the bill’s text. The proposal would allocate 60 percent of the funds raised to the state’s general fund and the remaining 40 percent would be distributed to “the essential health services account,” a new fund created by the legislation to fund health services and tobacco and nicotine use prevention programs and to increase public health training. Funds from the tax would also be used to pay for the enforcement of the proposed legislation.

Opponents of taxes on e-cigarettes and vaping products argue they are counterproductive and offset some of the public health gains these tobacco harm reduction tools offer to combustible cigarette smokers, a claim supported by the available research, which shows e-cigarettes and vaping products are significantly less harmful than tobacco cigarettes.

In 2018, the National Academies of Science, Engineering, and Medicine (NAS) issued a report in favor of e-cigarettes. NAS found “substantial evidence that completely switching from regular use of combustible tobacco cigarettes to e-cigarettes results in reduced short-term adverse health outcomes in several organ systems.”

In 2017, NHS Health Scotland issued a statement promoting the use of tobacco harm reduction products.

In 2016, the Tobacco Advisory Group of the Royal College of Physicians concluded the harms to health from the use of electronic cigarettes are “unlikely to exceed 5% of the harm from smoking tobacco.” The group urged smokers to use e-cigarettes and vaping devices, which they referred to as a “massive opportunity for a consumer – as well as healthcare – led revolution in the way nicotine is used in society.”

In 2015, Public Health England released a significant report finding “best estimates show e-cigarettes [as] 95% less harmful to … health than normal cigarettes.”

Washington State policymakers should reject burdensome taxes and regulations on e-cigarettes and vaping products. Not only do they help people quit using tobacco products, they also have the potential to save the state a significant amount of money. J. Scott Moody, chief executive officer and chief economist at State Budget Solutions, says if e-cigarettes and vaping devices had been fully adopted in place of combustible cigarettes, savings to Medicaid could have amounted to $48 billion in 2012.

An extreme tax such as the one recently proposed in Washington State would negatively impact the vaping industry. This has already occurred in Pennsylvania. The Keystone State passed legislation in 2016 imposing a 40 percent wholesale tax on vaping products. Since the tax’s implementation, an estimated 120 vaping businesses have shut down. Research indicates vape shops “generate annual non-online sales of more than $300,000 per store,” and average $26,000 in monthly sales. Higher taxes will cause shops in Washington State to close their doors and consumers will be forced to look elsewhere, including online and out of state, for their vaping and e-cigarette needs.

The Evergreen State should avoid creating burdensome taxes on tobacco harm reduction products such as e-cigarettes and vaping devices. These products offer a valuable alternative for millions of combustible tobacco cigarette smokers and help governments save money and numerous small businesses obtain more revenue.

The following documents provide further information on 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: Study Finds ‘No Detectable Changes in Lung Health’ of E-Cigarette Users Who Have Never Smoked–commentary-study-finds-no-detectable-changes-in-lung-health-of-e-cigarette-users-who-have-never-smoked
In this Research & Commentary, Heartland Institute State Government Relations Manager Lindsey Stroud discusses a 2017 study that examined health outcome differences between tobacco cigarette smokers and electronic cigarette users. Stroud says researchers “found no significant changes in any of the health outcomes investigated” and urges policymakers to promote the use of such products instead of imposing burdensome taxes and regulations.

Research & Commentary: Study Finds E-Cigarettes Would Prevent 6.6 Million Premature Deaths–commentary-study-finds-e-cigarettes-would-prevent-66-million-premature-deaths
In this Research & Commentary, Heartland Institute State Government Relations Manager Lindsey Stroud examines an October 2017 Tobacco Control study that found electronic nicotine delivery systems (ENDS) might help extend life for millions of people. The authors of the study found there was an estimated 6.6 million fewer deaths and more than 86 million fewer-life-years lost over a ten year period because of ENDS products. Stroud concludes the use of ENDS could also help improve the budgets of numerous state programs, including Medicaid.

Research & Commentary: Vaping Taxes and Bans Hurt Smokers Trying to Quit–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: Public Health Officials Urge Use of Electronic Nicotine Delivery Systems
In this Research & Commentary, Heartland Institute State Government Relations Manager Lindsey Stroud notes the importance of NHS Health Scotland’s joint statement encouraging the use of electronic nicotine delivery systems (ENDS) as an alternative to tobacco products. NHS Health Scotland, Public Health England, and other groups have found ENDS are 95 percent less harmful than tobacco cigarettes.

Qualitative Study on E-cigarettes Shows More Evidence of Tobacco Harm Reduction
In this Research & Commentary, Heartland Institute State Government Relations Manger Lindsey Stroud examines a study, published in The International Journal of Environmental Research and Public Health in June 2016, that provides additional evidence showing e-cigarettes and vaporized nicotine products (VNPs) are an effective tobacco harm-reduction tool.

Nicotine without smoke: Tobacco harm reduction
This report aims to provide a fresh update on the use of harm reduction in tobacco smoking, in relation to all non-tobacco nicotine products but particularly e-cigarettes. It concludes that, for all the potential risks involved, harm reduction has huge potential to prevent death and disability from tobacco use, and to hasten our progress to a tobacco-free society. 

E-Cigarette Primer for State and Local Lawmakers
Joel Nitzkin provides evidence e-cigarettes work as a tobacco harm reduction modality and reviews the arguments against them. He closes with recommendations for actions state and local lawmakers should and should not consider regarding tobacco harm reduction and e-cigarettes. 


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 Lindsey Stroud, Heartland’s state government relations manager, at [email protected] or 757/354-8170.