Across the country, local and state lawmakers are proposing to enact new taxes and/or increasing existing excise taxes on e-cigarettes. Some are introducing these measures ostensibly to address youth vaping. Others want to impose taxes that match existing cigarette and other tobacco taxes. A few—like West Virginia Governor Jim Justice—have introduced outrage vapor taxes in order to generate the revenue to eliminate other taxes.
Taxing vapor products is unlikely to be effective in addressing lawmakers’ concerns. Data from the Centers for Disease Control and Prevention’s (CDC) youth surveys indicate that vaping rates among high school students increased between 2017-2019, after vape taxes were imposed in several jurisdictions. These moves also disregard the harm reduction potential of vaping. E-cigarettes are significantly less harmful than combustible cigarettes. Even former Food and Drug Administration Commissioner Scott Gottlieb, no noted vaping proponent, stated that e-cigarettes “offer an important opportunity for adults to transition off combustible tobacco.”
While vape taxes have been unable to reduce youth vaping, they could also be helping to increase smoking among 18-to-24-year-olds.
Despite all this, lawmakers still continue to offer up legislation that imposes sin taxes on tobacco harm reduction products. They should know this: While vape taxes have been unable to reduce youth vaping, they could also be helping to increase smoking rates among 18-to-24-year-olds—which, until such taxes were imposed, were at all-time lows, according to CDC surveys.
Data from the CDC’s Behavioral Risk Factor Surveillance Survey (BRFSS) is limited to 2019, and identifies the proportions of different age groups among current smokers in a given state, rather than their absolute numbers. But of only eight states that had e-cigarette taxes prior to the start of that year, seven saw an increase in proportions of young adult smokers after their state e-cigarette tax went into effect.
For example, California’s vapor tax went into effect in 2017, when 6.7 percent of current smokers in the Golden State were aged 18-24. In 2018, this proportion had increased by 34 percent, to 9 percent. Delaware’s e-cigarette tax took effect in 2018, when only 10.5 percent of current smokers were aged 18-24. In 2019, this had increased by 48.6 percent, to 15.6 percent.
Pennsylvania’s whopping 40 percent wholesale tax closed nearly one-third of vape shops when it went into effect in late 2016. It also saw increased smoking rates among this age group. In 2016, only 12.6 percent of current smokers in the Keystone State were between 18-24. In 2017, this increased by 19 percent, to 15 percent. (This is similar to smoking rates prior to the tax, as in 2015, 15.3 percent of current smokers were young adults.)
Other states, including Kansas, Louisiana, Minnesota and West Virginia, all saw increases in smoking rates among young adults in the years after the tax increase. In fact, the only outlier in the series was North Carolina, with a $0.05-per-milliter tax which took effect in 2015, but smoking rates have not consistently fallen there. In 2015, 22.9 percent of current smokers in the state were aged 18-24; this decreased to 16.9 percent in 2016 and to 13 percent in 2018. Unfortunately, smoking rates among young adults rose in 2019, to 15.6 percent of current North Carolina smokers.
Now, this is all precursory correlation data. But it provides a compelling suggestion that making vapes less affordable to young adults increases the likelihood that they will smoke instead.
In addition, peer-reviewed studies have found that high taxation rates on e-cigarettes increase smoking and/or prevent adult smokers from transitioning to less harmful alternatives. A 2019 study published by the National Bureau of Economic Research concluded that taxes on vapor products “will increase the purchase and use of cigarettes.” Another 2019 study published in SSNR examined the impact of Minnesota’s 95 percent e-cigarette and found that the tax rate “increased adult smoking relative to what it would have been in the absence of [the] tax.”
Lawmakers must be wary of imposing draconian sin taxes on these harm reduction tools.
Although e-cigarette taxes don’t appear to reduce vaping among younger teenagers—perhaps because they are more likely to receive financial support from parents than their older peers—there are other threats to this age group.
Smoking rates among high school students are at all-time lows. According to the CDC, in 2019, 24.1 percent reported ever trying combustible cigarettes, only 6 percent reported smoking cigarettes in the past month, and only 1.1 percent reported daily cigarette use. This is a significant decline from 1991, when 70.1 percent reported ever using cigarettes, 27.5 percent reported past month use, and 9.3 percent reported daily cigarette smoking.
But unfortunately, other measures by lawmakers, including bans on vapor products, have coincided with local reversals in the declining youth smoking rates. For example, San Francisco banned flavored e-cigarettes in 2018. Between 2017 and 2019, past-month cigarette use among high school students there increased by 38.3 percent, from 4.7 percent to 6.5 percent.
Vaping products have helped millions of American adults quit smoking. Lawmakers must be wary of imposing draconian sin taxes on these harm reduction tools. Evidence continues to suggest that such taxes actually increase smoking rates—and that measures purportedly introduced to reduce harms are therefore creating them.
The author was previously a recipient of a Knowledge-Action-Change scholarship to support her work in tobacco harm reduction. The Influence Foundation, which operates Filter, has also received tobacco harm reduction scholarships from KAC.