August 14, 2015
Differential Taxes for Differential Risks
It is time to rethink conventional wisdom on tobacco taxation, say Tobacconomics researchers in a new Perspective in the New England Journal of Medicine. For decades now, the evidence-based best practice has been to tax all tobacco products at similar levels since they all harm health. The rapid evolution of the nicotine-delivery product marketplace, however, has led researchers to reconsider.
Tobacco control experts Frank J. Chaloupka, David Sweanor, and Kenneth E. Warner argue that taxing products according to their level of risk would maximize incentives for tobacco users to switch to less harmful products. E-cigarette taxes could be set high enough to discourage youth from taking up their use, while taxes on combustible products could be set even higher to encourage adults to quit or switch to less harmful products.
The science is now established that e-cigarettes pose significantly less danger to health than traditional combustible products. A differential taxation strategy could hasten the 50-year declining trend of cigarette smoking in the U.S. and alleviate its many associated harms.