The Vermont Legislature is considering a new (vastly higher) tax on e-cigarettes and smokeless tobacco that would treat them very much like cigarettes. The revenue Vermont hopes to raise—$1.3 million—is relatively paltry. I doubt that it’s good policy for at least three reasons:
1. It’s likely to damage public health. As R Street’s Joel Nitzkin—a former Louisiana public health commissioner and head of the tobacco control efforts of the Association of Public Health Physicians— has written, e-cigarettes offer public health benefits if regulated and used properly. Raising taxes on them sends a signal that they are just as bad as tobacco cigarettes. E-cigs certainly aren’t healthy–they’re addictive for sure and, because they are a stimulant, aren’t good for heart health—but vaping is far better than inhaling huge amounts of organic matter into one’s lungs. As Nitzkin writes:
Experience to date with currently unregulated e-cigarettes strongly suggests they already are securing substantial public health benefits among current smokers without increasing teen initiation of tobacco/nicotine use and without adverse impact on quit rates.
Brad Rodu of the University of Louisville has observed similar positive health impacts (relative to smoking) for people who switch from cigarettes to snus.
2. The taxes are highly likely to be regressive. Overwhelming evidence indicates that tobacco taxes fall heavily on the poor. Here’s a take from the liberal webzine Slate and here’s an academic study showing the same thing. Smokeless tobacco users tend to be even more downscale than smokers. (The limited data we have on e-cigarette users suggest that they’re slightly wealthier.)
3. High cigarette taxes tend to create black markets that, in turn, fuel serious crime. It’s quite probable that much higher taxes on smokeless tobacco and e-cigarettes will do the same thing in some cases.
Snus and e-cigarettes aren’t exactly health foods and the Vermont Legislature has lots of reason to think about ways to control them. Taxes may, in some cases, in some places, even be a legitimate part of a control strategy. But the Legislature should look carefully at the data before deciding whether or not to approve these policies.