Here's how an e-cigarette tax could backfire.
That’s according to researchers from the National Bureau of Economic Research, City University of New York and Bentley University. Higher e-cigarette taxes in Minnesota increased smoking rates and led to a fall in the rate of adult smokers who quit, “implying that e-cigs are a likely substitute for conventional cigarettes among current smokers,” they said.
Among Minnesota’s roughly 600,000 adult smokers in 2014, some 32,400 additional adults would have quit smoking during the sample period had that tax not been in effect, the researchers found. Applying the state’s tax at a national level would have deterred an estimated 1.83 million smokers from quitting over 10 years, they added.
There is no federal e-cigarette tax, but at least 20 states and Washington, D.C., have approved some kind of tax on e-cigarettes, according to the Campaign for Tobacco-Free Kids, a nonprofit advocacy organization. Minnesota in 2010 was the first state to implement an e-cigarette tax, and in 2013 hiked its tax from 35% of the wholesale price to 95%, the study authors said.
E-cigarette products have received close attention amid an ongoing youth vaping epidemic and a recent outbreak of e-cigarette-related lung illnesses linked to vitamin E acetate, an additive found in some THC products. President Donald Trump last month approved a spending bill that would, among other things, increase the minimum legal age from 18 to 21 for tobacco purchases, including e-cigarette products.
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