David Michael Miller
The first time I saw someone vaping was about seven years ago, in Fairhope, Alabama. It was a postal worker, in maybe his late 50s. When I asked about the cylindrical contraption he was holding, he told me he’d be dead without it. He had been a two-pack-a-day smoker since his youth, and could simply not quit until he bought a vaporizer, which is a type of e-cigarette.
Now, in early 2019, a new Wisconsin governor has proposed a massive tax on vape products. If the tax is implemented, it will almost certainly decimate the state’s burgeoning retail vape industry. Cutting off small business owners and employees from their livelihoods is bad policy. Making it harder for tobacco addicts to access potentially life-saving alternatives is positively cruel.
The E-Cigarette Excise Tax is part of Gov. Tony Evers’ “People’s Budget” proposal. At 71 percent, it would be among the highest vape tax in the country. Why 71 percent? Because that is the excise tax rate on tobacco products in Wisconsin. In explanatory detail that accompanied the budget, the administration justified this as “tax equity,” as if smoking and vaping deserve equal treatment in public policy.
The science on nicotine vapor is still developing. So we do not yet know the precise health advantage of switching from smoking to vaping. We do, however, know that the advantage is significant. According to a 2018 report from the National Academy of Sciences, “laboratory tests of e-cigarette ingredients, in vitro toxicological tests, and short-term human studies suggest that e-cigarettes are likely to be far less harmful than combustible tobacco cigarettes.” A peer-reviewed paper published this past December by the Journal of the American Medical Association network found that “compared with cigarette smoking, biomarker concentrations of nicotine and toxicants among e-cigarette-only users were much lower.”
Shouldn’t people just quit inhaling nicotine altogether? Yes, that’s the ideal. But enlightened societies subscribe to the principle of harm reduction, which emphasizes damage mitigation instead of ineffectual battles against human fallibility. We provide free condoms to teenagers, even if we’d prefer they wait to have sex. Many states explicitly authorize needle exchanges, to keep intravenous drug users safe from infectious diseases.
Some of the earliest scientific studies comparing smoking and vaping were done in Britain, a nation with a historical commitment to harm reduction. In 2015, a study commissioned by Public Health England concluded that “e-cigarettes are 95 percent less harmful to your health than normal cigarettes, and when supported by a smoking cessation service, help most smokers to quit tobacco altogether.” The British government now officially promotes vaping as a safer alternative.
“If nicotine is what people need, they will get it one way or another,” says Jason Clark, owner of Smokes on State, a vape shop with locations in Sun Prairie and Mauston. Clark is among the many small business entrepreneurs facing catastrophe. “If the tax proposed is written into law,” he tells me, “I will remove all vapor products from my stores and most likely shut down in the following months.” According to a Legislative Fiscal Bureau analysis, the administration will not only tax future activity, but impose a “floor tax” on the inventory stores hold on the day of implementation. So if a vape store has $100,000 in products on the shelf, the owner will have to write the state a check for $71,000.
If you doubt the brutality of this scheme, consider that more than 100 vape shops folded almost immediately when Pennsylvania imposed a floor tax of just 40 percent.
In Wisconsin, shops that survive will pass most of the tax on to customers, making it less attractive to switch to vaping. With fewer competitors, stores will be able to skimp on customer service staff, and spend less time helping new customers understand the rather complex mechanics of vaporizers. In the long run, then, the tax will mean more smokers, which will mean more extended hospital stays and more premature death in Wisconsin.
Supporters claim that the tax would curtail vaping among teens, which has been on the rise in Wisconsin. Insofar as the tax would curtail vaping generally, they’re right. But it’s already against the law to sell vape products to kids. Compliance shouldn’t be nudged through tax policy; it should be compelled by law enforcement. If current punishment and enforcement protocols are insufficient, let’s enhance them. “I would love to see much stiffer penalties,” says shop owner Clark. Greedy retailers who exploit children should be punished, not law-abiding establishments.
I get that we have to make up for diminishing tobacco tax revenue. But there must be a better way than imposing a confiscatory tax on the most effective smoking cessation product ever brought to market.
Michael Cummins is a Madison-based business analyst.
