Washington House Proposal Would Increase Tobacco Taxes by 1000%, Penalize People for Quitting Smoking, and Kill Businesses

March 22, 2021 

Members of the Washington House 
From: Americans for Tax Reform 

Dear Representative, 

On behalf of Americans for Tax Reform (ATR) and our supporters across Washington, I urge you to reject HB 1550, legislation that seeks to increase the Business & Operations tax on tobacco manufacturers by an astounding 1000%. HB 1550 would significantly increase the tax on lifesaving reduced risk tobacco alternatives like e-cigarettes and vapor products. If enacted, this bill would have a disastrous impact upon not only business in the state of Washington, but public health as well. It is imperative that this proposal does not pass. 

Over 40% of cigarettes consumed in 2018 were  purchased through cross-border shopping and organized smuggling due to tax rates on tobacco that are already remarkably high in Washington. Contrary to popular belief that tobacco smuggling a victimless crime consisting of someone purchasing a few extra cartons across state lines, most tobacco smuggling is run by multi-million-dollar organized crime syndicates. These networks, who also engage in human trafficking & money laundering, have also been used to fund terrorist and the US State Department has explicitly called tobacco smuggling a “threat to national security”. Only three out of 32 state tobacco increases studied met tax revenue estimates and for this reason, economists and tax policy experts view tobacco taxes as unsound policy, and it is highly unlikely that revenue estimates will be met. 

Former President Barack Obama remarked when he was 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.” Amidst economic downturn brought about by the Covid-19 pandemic, HB 1550 flies in the face of that sage advice from the 44th President. 

Data from the National Adult Tobacco Surveys has consistently demonstrated that tobacco tax increases have no statistically significant impact on the prevalence of smoking among those with household incomes of less than $25,000. 72% of smokers are from low-income communities, and to increase taxes on people unable to quit as they are struggling with the costs of the Covid-19 pandemic will put unnecessary hardship on families who are already struggling to make ends meet.  

The Washington Legislature should embrace new methods that are proven to help reduce smoking rates and facilitate adult smokers quitting through reduced risk tobacco alternatives such as e-cigarettes. HB 1550 would tax these safer products at such a high rate that it would drive people to more deadly alternatives like traditional combustible cigarettes. This goes against every principle of sound public health policy. Minnesota is serving as a case study on this already. After the state imposed a tax on vaping products, it was determined that it prevented 32,400 additional adult smokers from quitting smoking. 

About E-Cigarettes and Vapor Products: 

  • Traditional combustible tobacco remains one of the leading preventable causes of death in Washington. The negative health effects of combustible tobacco come from the chemicals produced in the combustion process, not the nicotine. While highly addictive, nicotine is a relatively benign substance like caffeine and nicotine use “does not result in clinically significant short- or long-term harms”. 
     

  • Nicotine replacement therapies such as nicotine patches and gums have helped smokers quit for decades. In recent years, advancements in technology have created a more effective alternative: vapor products and e-cigarettes. These products deliver nicotine through water vapor, mimicking the habitual nature of smoking while removing the deadly carcinogens that exist in traditional cigarettes.  

Benefits of E-Cigarettes and Vapor Products: 

  • Vapor products have been proven to be 95% safer than combustible cigarettes and twice as effective at helping smokers quit than traditional nicotine replacement therapies. 
     

  • Vaping has been endorsed by over 30 of the world’s leading public health organizations as safer than smoking and an effective way to help smokers quit. 
     

  • Just last week, a new analysis by Public Health England demonstrated just how effective vaping is in helping people quit smoking, noting that in just one year, over 50,000 British smokers, who would have continued smoking otherwise, quit smoking with vaping. 
     

  • Studies have repeatedly shown that flavors are critical to helping adult smokers make the switch to vaping. Adults who use flavored vapor products are 43% more likely to quit smoking than an adult who uses un-flavored products, according to a recent study from ten of the world’s top experts in cancer prevention and public health. 
     

  • A University of Glasgow study showed that e-cigarettes particularly help disadvantaged persons quit smoking. HB 1550 will have a tremendously negative impact on public health and would increase socioeconomic disparities significantly. 
     

  • Evidence demonstrates that flavors play no role in youth uptake of vaping. Academic studies have found that teenage non-smokers “willingness to try plain versus flavored varieties did not differ” and a mere 5% of vapers aged 14-23 reported it was flavors that drew them to   e-cigarettes. National Youth Tobacco Survey results have shown no increase in nicotine dependency among youths since flavored products entered the market. 
     

  • Vapor products would save over 150,000 lives if a majority of Idaho smokers made the switch to vaping, extrapolating from a large-scale analysis performed by leading cancer researchers and coordinated by Georgetown University Medical Centre. 

For the reasons outlined above, in the interests of public health, preventing a boon in criminal activity, and protecting the Washington economy, we call upon the committee to reject HB 1550. Countless businesses, thousands of well-paying jobs, and over 150,000 lives quite literally depend on it. 

Sincerely, 

 

Ben Rajadurai 

State Affairs Manager 
Americans for Tax Reform