States turn to taxes to curb vaping by teenagers
Kathleen Hambleton once used to spend $100 a week on Marlboro Reds.
The 43-year-old nurse from Saxtons River, Vermont, paid a high price for her addiction to smoking, undergoing multiple throat surgeries. The financial hit was also a big burden.
After lozenges, patches and hypnosis failed to help Hambleton quit, she tried vaping. She’s convinced she’s healthier now and spends less than $40 a month on her vaping supplies.
But Vermont recently passed a 92% wholesale tax on vaping and e-cigarette products. Hambleton believes the sudden and sharp price hike is prohibitively expensive.
“When they imposed the 92% tax, I can’t affordably pay that,” she said. “No one can.”
Historically, taxation has been an effective tool in reducing the number of people who smoke.
The World Health Organization estimates that a 10% rise in prices causes overall smoking rates to drop about 4% in highincome countries. Some states are relying on this strategy to work again — this time to discourage consumers, especially teenagers and young adults, from using e-cigarettes and vaping products.
Twenty states and the District of Columbia have passed those taxes, according to the Campaign for Tobacco-Free Kids, a nonprofit advocacy group. But whether taxes would be as effective in combating vaping as they have been with smoking is unknown, state officials and researchers say.
Early studies suggest that hiking prices on vapers would have the same effect as on smokers.
“There are so many parallels here, and that’s why we’re taxing them like cigarettes,” said Richard Auxier, a researcher at the Urban-Brookings Tax Policy Center who specializes in state and local tax policy. “But (vaping) is new, and we should all just take a minute to know that it all might play out a little differently.”
The interest in taxes comes as states grapple with a marked increase in e-cigarette use among teens. Nearly 28% of high school students reported using e-cigarettes in 2019, the latest National Youth Tobacco Survey reported. More than 5 million youth reported using e-cigarettes that year.
At the same time, public health officials are investigating an outbreak in serious lung injuries associated with some vaping products.
Molly Moilanen, vice president for communications of ClearWay Minnesota, a nonprofit advocacy and research organization, said increasing the cost of tobacco products adds muscle to reduction strategies.
“We know from tobacco prevention that price is king when it comes to inspiring people to quit, and when it comes to preventing youth from ever starting,” said Moilanen.
At the federal level, Congress has introduced several bills that would establish a nationwide e-cigarette and vaping tax. None has become law.
One major vaping advocacy organization supports the fiscal move. Tony Abboud, executive director of the vaping lobbying group Vapor Technology Association, said that a federal tax could help deter young people from buying these products and give the Food and Drug Administration more resources “to better enforce the laws” that regulate them.
States impose the vaping product taxes in a variety of ways. Among the most common: Retailers pay the tax as a percentage of the product’s wholesale price or a set price for each milliliter of nicotine in the vaping liquid.
The available data shows promise. A 2014 study tracked e-cigarette sales in 52 major U.S. markets using store scanner data and found that a 10% price increase reduced sales of disposable cigarettes by about 12% and about 19% for reusable ones. A separate 2018 analysis estimated that higher prices were linked to a decline in how often middle and high school students vaped.
However, Frank Chaloupka, an economist and research professor at the University of Illinois at Chicago who co-authored these studies, acknowledged the data does not reflect some important aspects of the e-cigarette market, such as sales from online vendors or local vape shops. Many vapers purchase their products from these retailers.
The studies also did not capture Juul’s impact. The popular device hit the market in 2015, after the study concluded, and that brand of e-cigarette accounts for more than half of the market share.
Implementing the taxes can also be complicated. Many e-cigarette products do not go through the usual distribution chain, so assessing wholesale taxes doesn’t capture all product sales, Chaloupka said.
On the other hand, he added, a per-milliliter tax may create a market where products with little liquid but high levels of addictive nicotine may cost less than items with a greater volume but lower amounts of nicotine.
“In some ways, if you’re trying to … reduce the use of products like Juul that are popular among kids,” Chaloupka said, “that’s not going to do that.”
The products eligible for the charge also vary. Some areas tax only the nicotine, while others attempt to tax all e-liquids and devices. Pennsylvania revised its rules after a 2018 court decision that said separately packaged components like heating coils and batteries could not be taxed under the state’s tobacco law. A bare-bones list of taxable products could undermine state efforts to stop vaping, Chaloupka said. However, including too many devices and eliquids might make it difficult to enforce a tax, he suggested.