Build Back Better Act Nicotine Tax Fails to Improve Public Health and Funds Wasteful Spending | Citizens Against Government Waste

Build Back Better Act Nicotine Tax Fails to Improve Public Health and Funds Wasteful Spending

The WasteWatcher

As the wheels of bureaucracy turn and expand, higher taxes are inevitable to fund the massive spending spree in Congress.  The Build Back Better Act (BBBA), H.R. 5376, as passed by the House, includes a new excise tax to help pay for the $1.75 trillion price tag.  The bill applies the same federal cigarette excise tax of $1.01 per pack on to e-cigarettes, vaping liquids, and oral nicotine pouches.  While excise taxes are generally used to generate revenue and deter behavior, the BBBA’s new taxes on tobacco harm reduction (THR) products are flawed.  It will not only fail to discourage traditional cigarette use, but it will also have an adverse impact on public health. 

THR products have proved to be highly effective in reducing the number of cigarette smokers across the world, particularly in countries like England and Sweden.  But in the United States, there has been a longstanding effort to make it more difficult to purchase and use THR products like vaping and e-cigarettes. 

More than 3 million U.S. adults used these products to quit smoking from 2007 to 2015.  Even the American Cancer Society, which is certainly not a fan of any tobacco product, admits that e-cigarette use is likely to be significantly less harmful for adults than smoking regular cigarettes.  Unlike traditional cigarettes, electronic nicotine delivery systems (ENDS) do not have significant links to cancer or cardiovascular disease.   A conventional cigarette contains more than 6,000 ingredients and, when burned, releases more than 7,000 chemicals, including arsenic, formaldehyde, lead, and tar.  E-cigarettes and vaping products release nicotine without all the harmful effects.  A vote to tax these products is a vote against public health. 

Even though THR products have helped adults quit smoking, fearmongering is still a driving factor in the debate over their regulation.  Youth tobacco use dropped by 1.73 million from 2019 to 2020.   Yet, the continued attacks on eliminating flavors in vaping and heat-not-burn products to prevent teen use end up hurting adults that use the flavors to help them move away from smoking cigarettes.  Instead of attacking flavors and taxing THR products, the federal and state governments should be enforcing current laws that already forbid teen use of tobacco products.

There are both public health and economic arguments in support of THR products.  The new regressive tax will disproportionately harm low-income earners who are trying to quit smoking.  Inflation is already taking a toll on Americans’ wallets, and Congress should look for ways to ease this burden, not pile on more taxes.  Individuals should not be punished for finding healthier alternatives to smoking traditional cigarettes.  Consumers use nicotine to quit smoking and ENDS are harm-minimizing products that lead to better public health outcomes. 

There is no denying that the vaping industry is growing despite efforts to stifle innovation by burdening the market with unnecessary taxes and regulations.  The U.S. e-cigarette and vaping market was estimated at $6.1 billion in 2020 and is expected to grow to $7.4 billion in 2021.  Taxing THR products to fund unrelated (and wasteful) programs is unhealthy for both the economy and smokers.

A November 21, 2021, Wall Street Journal article cited a 2020 Journal of Risk and Uncertainty study by Georgia State University economist Michael Pesko, who receives funding from the National Institutes of Health.  Pesko “estimated that a tax on e-cigarettes equivalent to the one in the current House bill would result in 2.5 million additional adult cigarette smokers in the U.S.”  University of Michigan School of Public Health Dean Emeritus Kenneth Warner said, “This policy would be a public health disaster, guaranteed to increase smoking and deaths from it.”

Since Sens. Joe Manchin (D-W.Va.) and Catherine Cortez-Masto (D-N.M.) have expressed concerns over the new tax, it may be removed when the Senate considers the BBBA.

Even with all of the benefits provided by THR products, falsities spread like wildfire. Fearmongering tactics put public health at risk.  Instead of relying on science, legislators are feeding into the hype.  The government is in no place to use taxation as a way to legislate morality.  If the government wanted to engage on the issue, they should discuss the benefits of THR products as an alternative to traditional cigarettes. 

If the ultimate goal is to improve public health and safety, the answer is not to increase taxes on THR products.  Using excise taxes to fund unrelated social programs is not sound public policy, and Congress should avoid any tax increase on THR products.