Five Figures to Consider
Buy a pack of Marlboros in New York City, and you will pay $5.85 in cigarette taxes. Buy a Juul e-cigarette device and liquid nicotine pod, and you won’t be taxed a penny. The total price of your Marlboro pack? About $15. Total price of your Juul pod in mint, mango, cucumber or fruit flavor? About $4. Both the Marlboro and the Juul pod contain about 200 puffs of nicotine, a chemical that is as addictive as heroin and cocaine. It rewires the prefrontal cortex of young people, priming them for addiction and interfering with executive function. Yet millions of American youth, enticed by peers, tasty flavors and their excitement-seeking, young brains, are heading back to school with Juuls in their pockets. Our tobacco tax policy makes it easily affordable – even for someone limited to babysitting and lawn mowing funds.
Cigarettes have been taxed by the federal government since 1864, yet e-cigarettes have so far escaped federal and most local taxation (excluding sales tax.) Only eight states and the District of Columbia currently levy a liquid nicotine tax. New Jersey will impose one beginning October 1st. Meanwhile other tobacco products including snuff, chewing tobacco and cigars are subject to federal and local tobacco taxes. Why not e-cigarettes? Because tobacco taxes are written to apply to specific products such as a pack of 20 cigarettes or an ounce of snuff, not to their ingredients, e.g. nicotine or tobacco. In order to tax e-cigarettes, new laws must be written.
One argument against taxing e-cigarettes is that the aerosol that delivers nicotine in an e-cigarette is considered less toxic than the smoke that delivers nicotine in a combustible cigarette. Indeed, if all smokers switched from combustible tobacco to e-cigarettes, the $170 billion in annual health care costs related to the harm caused by tobacco smoke would drop. But what new harms would occur? We don’t know all of them, in part because the FDA did not act to regulate e-cigarettes until 2016, one year after Juul introduced its device. When the FDA did finally act, it gave e-cigarettes that were on the market before August 9, 2016, until 2022 to submit evidence of their safety. As far as vaping nicotine goes, we are in the early days of scientific research, somewhat like the time when medical doctors promoted Camel cigarettes.
Already in 2016 two million middle and high school students were using e-cigarettes. News reports – as well as sales figures at Juul Labs – suggest that number is rising. Juul sales are growing at more than a Sendin annual clip, reaching almost $1 billion in a recent 12-month period. Teens now signal their style not just with iPhone covers and Instragram posts, but with Juul wraps available on Amazon. Increasing concern about the threat to public health caused by teen e-cigarette use prompted the American Academy of Pediatrics, the Cancer Action Network, the American Heart Association, the American Lung Association, the Campaign for Tobacco-Free Kids and the Truth Initiative in April to request immediate FDA action to protect young people particularly from Juul electronic cigarettes. In response to this and FDA action, Juul Labs, a private company that was founded by two ex-smokers and has a stated mission to improve the lives of adult smokers, has implemented a minimum age of 21 for its online sales and a new age verification process. In retail shops the minimum age to buy an e-cigarette is 18. However, buyers are not always carded, and fake IDs are easily purchased online.
What are the e-cigarette harms we know? E-cigarettes are attracting new users to nicotine, which is known to cause nicotine dependence and addiction. According to research published in the Annals of Internal Medicine, 15% of e-cigarette users had never smoked cigarettes. Nicotine also damages fetal brain development, exacerbates existing cardiovascular disease and, when used during adolescence, may have long-term impacts on brain development. Moreover, e-cigarettes appear to be an on-ramp to traditional cigarette smoking for young adults; those who vape for 16 months are four times more likely to try combustible cigarettes. Finally, e-cigarette aerosol contains potentially toxic substances and has been shown to contain toxic metals, including chromium, nickel and lead.
It will take time and research to fully understand the net public costs and benefits of e-cigarettes. Will e-cigarettes wean smokers off of combustible tobacco? Or will e-cigarettes simply be an adjunct to combustible cigarettes for current smokers while priming new nicotine addicts? Either way, there is a public cost to e-cigarette smoking that makes e-cigarette products a reasonable target for a so-called “sin tax.” Taxation has been shown to cause a reduction in cigarette smoking. Taxes could be written to particularly target the flavored tobacco that has attracted youth vapers. (Without added flavor, the nicotine liquid in an e-cigarette has no taste, but would still be useful for those trying to quit smoking.) E-cigarettes may not deserve the same tax rate as Marlboros, however they should surely be taxed higher than kale – and out of reach of most youth.
FIVE FIGURE THINKING
Relatively speaking, e-cigarettes are less harmful than combustible cigarettes. Nevertheless, they are not harm-free and therefore should be subject to a tobacco tax just like snuff, cigars, cigarettes and chewing tobacco.
American Journal of Medicine, Annals of Internal Medicine, Campaign for Tobacco-Free Kids, Centers for Disease Control, Consumer Advocates for Smoke Free Alternatives Assoc., Food and Drug Administration, National Academies of Science, Engineering and Medicines, National Conference of State Legislatures, Tax Foundation, Tax Policy Center, Truth Initiative