Last week, Gov. Jared Polis announced a last-minute proposal for a higher excise tax on all nicotine products, including e-cigarettes. Far from protecting consumers, Polis and Democrats in the legislature threaten to close consumers off from healthier options and put small business at risk.
Gov. Polis’s proposed issue for the statewide ballot recommends raising the tax on nicotine products from 40 percent to 62 percent of the listed price. In an effort to make this palatable to the public, the governor promises this will raise over $300 million and that those resources will be split among education and health care programs. But when smoking is responsible for more than 5,000 Colorado each year, imposing a hefty tax on e-cigarettes is hugely irresponsible.
Lawmakers frequently condemn the rise in teen vaping, referring to it as an “epidemic” and using it to justify government overreach. But the truth is that e-cigarettes are a critical form of harm reduction for adult smokers — and our public policies ought to reflect that. Public Health England determined that e-cigarettes are 95 percent safer than traditional cigarettes. E-cigarettes carry nicotine, but because they don’t burn tobacco, they don’t release the toxins that lead to most smoking-related illnesses like emphysema, asthma, heart disease, and lung cancer. What’s more, the New England Journal of Medicine published a rigorous academic article earlier this year that found that smokers who used e-cigarettes to quit were twice as successful as those who relied on other nicotine replacement therapies like gum or patches.
But Gov. Polis isn’t just ignoring these clear health benefits, he’s also misleading the public on the financial gain. In fact, there’s been little discussion of how much of the estimated $317 million would actually come from vapor products. Why rush through a last-minute tax plan for the ballot that could devastate a developing industry that’s having a huge, positive public health impact? They could focus instead on traditional cigarettes, which researchers and regulators have known for years are what truly put lives at risk.
The fact is, a 62 percent tax on vaping juice would cut into our profit margin so deeply, it would force Jvapes to close its doors. And we wouldn’t be the only ones. This is exactly what happened in Pennsylvania, when it passed a 40 percent excise tax on smokeless tobacco products in 2016.
And while Gov. Polis claims the tax is intended to curb teen vaping, previous experience suggests this isn’t the case. In fact, the Heartland Institute reported that after Pennsylvania imposed its tax, teen vaping increased. More concerning, however, is that a tax like this will deter lower income, adult smokers. According to the Cato Institute in Washington, D.C., cigarette taxes typically hurt lower-income Americans more than anyone else: “smokers earning less than $30,000 per year spent 14.2 percent of their household income on cigarettes.”
Colorado is just one of many states threatening crippling taxes and burdensome regulations on the vaping community. From California to New York to Massachusetts, lawmakers are piggybacking on the hysterical language coming out of Washington, D.C. in an effort to bring in new revenue. Just this week, a vaping advocate in New York made this case to his local paper arguing, “it’s time lawmakers stop trying to cover up their spending problems in the name of protecting our youth.”
New regulations and taxes ought to be viewed through a prism of harm reduction. Putting excessive pressure on the vaping industry will prevent more smokers from switching to a healthier option, signal to other innovators that there is no room for improvement in the marketplace, and force local retailers out of business.
Amanda Wheeler owns Jvapes E-Liquid and is also the vice president of Rocky Mountain Smoke Free Alliance, a non-profit organization representing small business owners in the Colorado vaping industry.