A tax on public health

Shutterstock.com

Article Highlights

  • Taxing e-cigarettes like their cancer-causing alternative, traditional tobacco, is absurd.

    Tweet This

  • The evidence to date tells us that e-cigarettes are safe when compared to conventional cigarettes.

    Tweet This

  • States may be pursuing this tax because revenue from taxing traditional cigarettes has been declining.

    Tweet This

  • But that’s no excuse for taxing a product that can help people quit smoking, improve health outcomes and ultimately save lives.

    Tweet This

Last week, the Food and Drug Administration issued a proposal to regulate electronic cigarettes as a tobacco product. While public health and industry experts debate this much-anticipated regulation, a handful of Senate Democrats are quietly promoting the pernicious idea of extending tobacco taxes to e-cigarettes. Taxing e-cigarettes would threaten public health by penalizing a product that holds the promise of luring people away from the traditional cigarettes that have caused so much death and disease.

Sens. Tom Harkin, D-Iowa, Dick Durbin, D-Ill., Richard Blumenthal, D-Conn., Jack Reed, D-R.I., Sheldon Whitehouse, D-R.I., and Jay Rockefeller, D-W.V., have each introduced or co-sponsored one or more bills that, if enacted, would extend federal tobacco taxes to e-cigarettes once the FDA finalizes its proposal. Taxing e-cigarettes like their cancer-causing alternative, traditional tobacco, is absurd. The evidence to date tells us that e-cigarettes are safe when compared to conventional cigarettes.

Because no tobacco leaves are combusted, there are no carcinogenic tars and gases in e-cigarettes. Instead, a heating element converts a liquid solution of nicotine into an aerosol that users inhale as a vapor. Surveys show that users are predominantly former heavy smokers who switched completely or cut down on smoking. Many of them turned to e-cigarettes after failing to get results with nicotine gum or patches. Of course, e-cigarettes do provide nicotine, but the health effects of nicotine are generally benign. And the other ingredients in e-cigarettes – propylene glycol and glycerin, as well as nitrosamines, cadmium, lead and nickel in small amounts – are either generally accepted as safe or are present in such low levels as to likely be harmless.

Imposing a federal excise tax on a product that has health benefits may sound impossible, but it’s not. In fact, lawmakers recently did just that. The Affordable Care Act imposes excise taxes on brand pharmaceuticals and medical devices. The Affordable Care Act even imposes an excise tax on health insurance coverage, the very thing the law seeks to promote. These taxes seem to have been adopted simply to provide the additional revenue needed to cover the cost of other provisions of the bill.

Also, many states are moving toward taxing e-cigarettes. Minnesota already imposes tobacco taxes on e-cigarettes and similar proposals have emerged in Hawaii, Indiana, Kentucky, Massachusetts, New Jersey, Ohio, Oklahoma, Rhode Island, South Carolina, Utah, Washington and Wisconsin. States may be pursuing this tax because revenue from taxing traditional cigarettes has been declining. As with the federal taxes on pharmaceutical and medical devices, it’s all about needing the money.

But that’s no excuse for taxing a product that can help people quit smoking, improve health outcomes and ultimately save lives. Any e-cigarette tax would raise the price of e-cigarettes for consumers, discouraging smokers from switching away from cigarettes. Governments have plenty of more efficient, and less regressive, tax policies to consider if they need more revenue. Budgetary concerns can’t justify adopting a tax that would undermine public health objectives.

At a hearing last December before the New York City Council’s health committee, the Campaign for Tobacco-Free Kids pushed for treating e-cigarettes like cigarettes by arguing, "If it walks like a duck and it talks like a duck and it sounds like a duck and it looks like a duck, it is a duck." That’s a nonsensical argument for setting tax policy. The reason we tax cigarettes is not because of the way they look – it’s because they kill people. E-cigarettes may look like cigarettes, but they don’t kill like cigarettes. If we care about public health, we shouldn’t tax them like cigarettes. 

Alex Brill is a research fellow at the American Enterprise Institute. Alan D. Viard is a resident scholar at the American Enterprise Institute.

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Alan D.
Viard

 

Alex
Brill

What's new on AEI

AEI Election Watch 2014: What will happen and why it matters
image A nation divided by marriage
image Teaching reform
image Socialist party pushing $20 minimum wage defends $13-an-hour job listing
AEI on Facebook
Events Calendar
  • 27
    MON
  • 28
    TUE
  • 29
    WED
  • 30
    THU
  • 31
    FRI
Monday, October 27, 2014 | 10:00 a.m. – 11:30 a.m.
State income taxes and the Supreme Court: Maryland Comptroller v. Wynne

Please join AEI for a panel discussion exploring these and other questions about this crucial case.

Tuesday, October 28, 2014 | 9:30 a.m. – 12:15 p.m.
For richer, for poorer: How family structures economic success in America

Join Lerman, Wilcox, and a group of distinguished scholars and commentators for the release of Lerman and Wilcox’s report, which examines the relationships among and policy implications of marriage, family structure, and economic success in America.

Tuesday, October 28, 2014 | 5:30 p.m. – 7:00 p.m.
The 7 deadly virtues: 18 conservative writers on why the virtuous life is funny as hell

Please join AEI for a book forum moderated by Last and featuring five of these leading conservative voices. By the time the forum is over, attendees may be on their way to discovering an entirely different — and better — moral universe.

Thursday, October 30, 2014 | 2:00 p.m. – 3:00 p.m.
A nuclear deal with Iran? Weighing the possibilities

Join us, as experts discuss their predictions for whether the United States will strike a nuclear deal with Iran ahead of the November 24 deadline, and the repercussions of the possible outcomes.

Thursday, October 30, 2014 | 5:00 p.m. – 6:15 p.m.
The forgotten depression — 1921: The crash that cured itself

Please join Author James Grant and AEI senior economists for a discussion about Grant's book, "The Forgotten Depression: 1921: The Crash That Cured Itself" (Simon & Schuster, 2014).

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled today.
No events scheduled this day.