What if a Vaping Tax Encouraged Cigarette Smoking?

Policies aimed at youth vaping may have negative effects on adult smokers.


The surging popularity of vaping among young Americans is driving lawmakers to use one of their favorite tools to discourage unwanted behavior: taxes.


In December, the Massachusetts legislature passed a 75 percent tax on all e-cigarettes. Twenty states have already done so, along with the District of Columbia, and several more are considering similar policies. The House Ways and Means Committee passed a bill last year that would make federal tobacco taxes apply equally to cigarettes and vaping products that deliver nicotine, the addictive drug in tobacco.


Taxes have proved effective in reducing cigarette smoking. But what if a vaping tax actually encouraged smoking instead of reducing it?


A new study suggests that these new taxes have the potential to do just that — by discouraging adult smokers from considering nicotine vaping, a safer way to ingest nicotine, or encouraging vapers to switch to cigarettes instead. The study, published by the National Bureau of Economic Research, examined what happened in Minnesota, one of the first states to impose a steep vaping tax (95 percent). The effect was that declines in smoking there leveled off, while they continued to fall in similar states that hadn’t imposed such taxes.


“By decreasing the extent to which people use e-cigarettes, you decrease quitting of conventional cigarettes,” said W. Kip Viscusi, a professor of law, economics and management at Vanderbilt University, who was not involved in the research but has studied tobacco policy extensively.


The research was conducted by Henry Saffer, Michael Grossman, Daniel L. Dench and Dhaval M. Dave, who used data from a detailed census survey about tobacco use to measure what happened to the smoking rate. Their goal was to find out whether e-cigarettes helped adult smokers quit smoking cigarettes, which are linked to a wide range of illnesses and are estimated to contribute to one in five deaths in the United States.


It’s possible, they figured, that vaping might encourage more people to smoke, by providing a new way to try nicotine for the first time. It might also cause people who might have quit to just keep smoking, by providing a second way to get nicotine where smoking is restricted. The natural experiment of the Minnesota tax helped them measure what some overall effects really were.


When Minnesota made vaping more expensive, they found, smokers kept smoking instead of switching to e-cigarettes. A longstanding decline in adult smoking in the state slowed way down, while smoking in states that hadn’t imposed big vaping taxes continued to fall. The researchers concluded that making e-cigarettes more expensive discouraged Minnesota smokers from trying them and caused fewer of them to switch away from smoking. By measuring the difference in the trends, the researchers estimated that Minnesota caused around 32,000 more adults to keep smoking cigarettes.


The paper didn’t include close measures of whether people who stopped smoking completely quit nicotine, the most healthful possible outcome for smokers. While it is clear that most vaping products are safer than cigarettes, it is not yet clear by how much. New research is emerging that vaping products may cause some long-term lung and heart disease. And a recent poisoning outbreak associated mainly with THC, in which 55 people died, suggests that there can be acute health risks for some users.


But in general, nearly all public health researchers agree that it’s better to switch to regulated e-cigarettes than to continue smoking cigarettes. They tend to describe a move from smoking to vaping as a form of “harm reduction,” a more safe choice, even if it is not totally safe.


Some tobacco opponents were skeptical of the study’s findings. Matthew L. Myers, the president at the Campaign for Tobacco-Free Kids, which endorses high vaping taxes, said the Minnesota results could be explained by unmeasured differences between that state and the states the researchers used for comparison. He pointed to other research that shows that only a fraction of adult smokers who start vaping ever switch over entirely.


“One has to be skeptical that e-cigarette use, including taxes on e-cigarettes, have been powerful enough in Minnesota or anywhere to actually have a meaningful measurable effect on adult cessation rates,” he said.


Mr. Myers supports high taxes on e-cigarettes primarily because he sees them as a good way to discourage young people from starting to use nicotine in the first place. Since vaping products have entered the market in the United States, youth use of them has increased rapidly, outpacing a simultaneous decline in cigarette smoking among young people. Federal officials have described the development as a public health crisis.


The result has been a flurry of policy action to regulate vaping. In December, Congress passed a law that raises the legal age to purchase any tobacco product to 21. On Thursday, the Food and Drug Administration said it would crack down on the manufacturers of a subset of nicotine vaping devices that are sold in flavors other than tobacco or menthol. These measures are also intended to prevent youth vaping.


Strong evidence from states suggests that raising the tobacco purchasing age reduces smoking among both young adults and younger teenagers, who are less likely to have friends who can buy them cigarettes. Flavored products are particularly popular among younger vapers, according to surveys.


But Mr. Saffer, one of the Minnesota paper’s authors, says his results suggest that a tax may be a blunt tool that reduces youth vaping at the expense of decreasing the number of adults who quit smoking.


“The research shows that e-cigarette taxes would be bad for adult smokers,” he said. “To stop youth use, we know there are other alternatives.”


Teen vaping rates have risen sharply in Minnesota, too, despite the large tax on the products.


Abigail Friedman, an assistant professor of health policy at Yale, and an author of two studies on state Tobacco 21 laws, said policymakers needed to strike a delicate balance in regulating e-cigarettes. Regulations need to deter teen vaping, she said, but also do as much as possible to help adult smokers switch to safer alternatives.


“We need to make it attractive as an alternative, and we need to make it unattractive otherwise,” she said.


After reading the Minnesota paper, she concluded that broad vaping taxes had failed the first test.


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