Why e-cigarette taxation is backfiring on states – and consumers – InsideSources
As the coronavirus pandemic drags on, we are all worried about our health. But the latest efforts to clamp down on vaping in Massachusetts aren’t delivering the public health benefits promised by their proponents — and it’s not hard to see why.
While Massachusetts imposes a whopping 75% excise tax on the wholesale price of all vaping equipment and bans the sale of flavored products, many of its neighbors have taken a different approach. New York, for example, levies a 20% tax on electronic cigarettes, while Connecticut has adopted a 10% tax and Rhode Island has none. So while e-cigarette sales have declined in Massachusetts, the state’s draconian policies have led to a surge in cross-border purchases by users seeking lower prices and freer access to the products they ‘they like. The effect on overall consumption: negligible at best.
But it’s getting worse. By forcing consumers to travel to border states to purchase the products they want, these policies divert economic activity from Massachusetts, depriving businesses and workers of opportunity.
Lawmakers in the Bay State and elsewhere should consider the experiences of other jurisdictions that have attempted to legislate health behaviors. In 2011, for example, Denmark implemented a tax on saturated fat to promote healthier diets. The measure was repealed just 15 months later after increased cross-border shopping from Denmark to neighboring countries resulted in the loss of around 1,300 Danish jobs and no significant change in saturated fat consumption. When Philadelphia implemented a sugary drink tax in 2017, the same thing happened: Sales plummeted in Philadelphia and rose in surrounding areas, costing the city 1,200 jobs and nearly $80 million. dollars in economic output.
Like other states where restrictions have been put in place, Massachusetts is not just making a strategic mistake. The goal of discouraging e-cigarette use through sweeping, indiscriminate policies is fundamentally at odds with the best scientific evidence on harm reduction and public health.
When researchers examined the effects of the Massachusetts flavor ban and tax, they found that messages from health officials questioning the safety of e-cigarettes led to an increase in the use of combustible cigarettes in the community. Boston area.
It is now well established that e-cigarettes are far less toxic than regular fuel-powered cigarettes. In 2015, Public Health England conducted a review of the scientific literature and found that “e-cigarettes are 95% less harmful to your health than regular cigarettes and, when supported by a smoking cessation service, help most smokers quit smoking completely.
Indeed, studies have estimated that e-cigarettes are almost twice as effective as smoking cessation aids than FDA-approved products such as gum and nicotine patches. This helps explain why the rise in vaping in recent years has been accompanied by a drop in smoking rates.
By targeting e-cigarettes, Massachusetts risks bringing former smokers back into the pack and reducing the likelihood that current smokers will quit the habit. This danger is exacerbated by the fact that the excise tax rates that Massachusetts imposes on cigarettes, cigars and smoking tobacco are significantly lower than the rates that apply to vaping products.
A study in Minnesota, which has a tax rate as high as Massachusetts at 95%, found that if the tax had been removed, about 32,400 more smokers would have quit. Another study came to similar conclusions: raising taxes on e-cigarettes reduced e-cigarette use among teens, but increased sales of combustible cigarettes. “We conclude that the unintended effects of (e-cigarette) taxation could significantly undermine or even outweigh public health gains,” the researchers warned.
Additionally, concerns about the “epidemic” of youth vaping often ignore important facts. Among teenagers who vape often, almost all are or were smokers; for them, e-cigarettes offer a much healthier alternative to combustible cigarettes. According to the 2015 National Youth Tobacco Survey, only 0.3% of non-smoking teens vaped regularly.
It’s a matter of life and death for the 13.4% of adults and 5% of teenagers in Massachusetts who currently smoke. Because 9,300 people die each year from tobacco-related diseases.
Policies should be judged on their effectiveness, not on their good intentions. The people of Massachusetts and beyond deserve better than these misguided policies.