Study: higher e-cigarette taxes may encourage use of traditional tobacco

Raising taxes on e-cigarettes and other vaping devices to discourage consumers from using the products may drive people to buy traditional tobacco products, according to a new study.

Through Feb 4, some 2,758 people have been hospitalized in all 50 states for vaping-related lung injuries, and 64 people have died, the US Centers for Disease Control and Prevention (CDC) reported.

That has led to state and federal efforts to curb vaping through higher taxes. Last October, the Ways and Means Committee of the US House of Representatives approved an excise tax on e-cigarette vaping products that would be equivalent to the current $1.01 federal excise tax on a standard pack of cigarettes. The bill has not advanced in the Senate.

The study by the National Bureau of Economic Research found that "while cigarette taxes reduce cigarette use and e-cigarette taxes reduce e-cigarette use, they also have important interactions on each other", said Michael Pesko, a health economist and assistant professor at Georgia State University, in a statement. "E-cigarettes and cigarettes are economic substitutes. So, if you raise taxes on one product, you will increase use of the other."

Pesko and other researchers drew upon sales data from 35,000 retailers across the nation for a seven-year period and concluded that for every 10 percent increase in e-cigarette prices, sales of the vaping product dropped 26 percent.

But the higher tax on e-cigarettes resulted in an 11 percent increase in sales of traditional cigarettes, the researchers concluded in a study released last month.

"We estimate that for every one e-cigarette pod no longer purchased as a result of an e-cigarette tax, 6.2 extra packs of cigarettes are purchased instead," Pekso said. "The public health impact of e-cigarette taxes in this case is likely negative."

Through December, 12 states have imposed new taxes on e-cigarettes. The tax rate ranges from 15 percent in Illinois to 92 percent in Vermont, according to the Public Health Law Center at the Mitchell Hamline School of Law in St. Paul, Minnesota.

The US Food and Drug Administration last month announced a ban on flavored e-cigarette products aimed at teenagers but exempted tobacco-flavored and menthol pods.

Some have argued that e-cigarettes can be used in helping quit tobacco products because the level of nicotine can be gradually reduced to eliminate, or at least moderate, the craving for another smoke. The FDA has not approved e-cigarettes as a smoking cessation device.

US Surgeon General Jerome Adams said the evidence is mixed: Rather than helping smokers quit, e-cigs may get nonsmokers to start.

The Surgeon General's 2020 report on tobacco use in the US said 20 percent of all deaths in the nation can be linked to smoking, making it the leading preventable cause of death in the country.