An increase in vape retail price just meant that most vapers reverted back to purchasing cigarettes.
Senate Bill 89, would set in place the first-ever statewide tax on vaping products. It would also align the age limit to purchase the products with the federal one, from 19 to 21. Stevens said that the measure comes in response to the most recent state tobacco report.
“Alaska has an active underage sales enforcement program which has reduced sales of smoking products to minors, but more steps are required to see Alaska’s tobacco use rate decline, especially among young Alaskans,” he said in a recent statement. “This is about protecting our children from the addiction of nicotine and their ability to get access to these products,” he added.
A similar bill introduced, passed and then vetoed last year, would have imposed a 35% tax on the wholesale price of vaping products. Stevens said that taxes are an effective way to curb tobacco use, however data indicates otherwise.
The documented effect of vape taxes
In line with previous findings, a 2020 paper published in the Journal of Health Economics suggests says that setting harsh vape taxes on vaping products just leads to an increase in cigarette sales.
A group of researchers including US leading tobacco economist Michael Pesko, a leading tobacco economist in the United States, carried out a study to determine the effectivity of taxes. They tracked the weekly sales of a large percentage of national retailers and the total sales among drug stores, food stores, dollar stores, club stores and mass merchandisers.
The compiled data indicated that the burden of vape taxes is felt mostly by consumers as the tax tends to be translated into higher consumer prices. Moreover they found, this increase in retail price just meant that most vapers reverted back to purchasing cigarettes. “Our study finds that for every one Juul-sized e-cigarette eliminated as a result of an e-cigarette tax, 1.9 packs [of cigarettes] are purchased instead,” said Pesko.
On a similar note, in a recent episode of RegWatch, tobacco control experts Dr. Kenneth Warner and Cliff Douglas discussed Canada’s imminent excise tax and its likely ramifications. The nationwide excise tax is going into effect soon and tobacco control experts are highlighting that this could be a massive public health blunder.
Study: Countries With Higher Tobacco Taxes Had Higher Teen Vaping Rates