February 24 2021
To: Hawaii House Committee on Finance
From: Americans for Tax Reform
On behalf of Americans for Tax Reform (ATR) and our supporters across Hawaii, I urge you to reject HB 598 and HB 476, misguided legislation that seeks to impose taxes upon life-saving, reduced risk tobacco alternatives, such as electronic cigarettes and other vapor products. If enacted, these bills would not only harm small businesses, but would also have a disastrous impact on public health throughout the Aloha State, and lead to an increase in tobacco-related deaths.
Aside from the public health harm caused by increasing taxes on a product proven to save lives, this bill would also cause considerable economic harm, particularly given the current pandemic-related economic downturn. Even former President Barrack Obama remarked when he was in office: “The last thing you want to do is raise taxes in the middle of a recession because that would just suck up, take more demand out of the economy and put businesses in a further hole.” Yet HB 598 and HB 476 fly in the face of that sage advice from the 44th President.
Rather than repeating the failed policies of the past and continuing to punish low-income smokers, who are unable to quit nicotine, with another tax increase, the Hawaii Legislature should embrace new methods that are proven to help reduce smoking rates, and aid those looking to quit by allowing tobacco alternatives, such as e-cigarettes, to remain within financial reach.
E-cigarettes have been overwhelmingly proven to be 95% safer than combustible cigarettes, and twice as effective as more traditional nicotine replacement therapies. It must be stressed that the negative effects of smoking combustible tobacco come not from the nicotine, a relatively benign, yet highly addictive substance much like caffeine, but rather the chemicals produced during the combustion process – “people smoke for the nicotine but die from the tar.” Scientific data shows that the blood levels typically achieved by consuming nicotine via harm reduction products “does not result in clinically significant short- or long-term harms” which is why smokers have been using nicotine replacement therapies (NRT) for decades without incident. For this reason, over 30 of the world’s leading public health organizations have endorsed nicotine vaping as safer than smoking and an effective way to help smokers quit. This list includes Cancer Research UK; the British Medical Association; the British Lung Foundation; the New Zealand Minister of Health; the US National Academies of Sciences, Engineering, and Medicine; the American Association of Public Health Physicians; the Royal Australian College of Physicians; the French National Academy of Pharmacy; and the German Federal Institute for Risk Assessment.
Furthermore, a recent study performed by researchers at the University of Glasgow has shown that e-cigarettes particularly help disadvantaged persons quit smoking. The impacts of this on health inequalities would be monumental, however measures like HB 598 and HB 476 would widen even further these socioeconomic disparities in health. Another recent analysis by Public Health England offers more evidence in favor of vapor products as an indispensable tool to help smokers quit. In 2017, over 50,000 British smokers stopped smoking with a vaping product who would have continued smoking otherwise.
Taxing safer products at an equal rate, thereby failing to incentivize people to move away from deadly alternatives, goes against every principle of sound public or health policy. As the price of a product increases, it is likely that its use decreases. In previous instances, levying taxes on vaping products has been proven to increase smoking rates as people shift back to deadly combustible cigarettes. Minnesota is serving as a case study on this already. After the state imposed a tax on vaping products, it was determined that the tax increased adult smoking and prevented 32,400 additional adult smokers from quitting smoking.
Extrapolating from a large-scale analysis by the US’s leading cancer researchers and coordinated by Georgetown University Medical Centre, if a majority of smokers in the state of Hawaii made the switch to vaping, over 40,000 lives would be saved. In seeking to tax these life-saving products, these bills place these lives in jeopardy. Small increases in projected revenue should never come at the expense of human lives.
For the reasons outlined above, in the interests of public health, and protecting the most vulnerable in society from financial hardship at a time they can least afford it, we call upon the Committee to accept the science and vote against HB 598 and HB 476. Tens of thousands of lives depend upon it.
Director of Consumer Issues
Americans for Tax Reform