Alaska Proposes New Bill to Tax and Restrict Sales of E-cigarettes
The Alaska State Senate has reintroduced a bill closely resembling one vetoed by the governor last year, proposing statewide taxation and regulatory measures for e-cigarettes. Senate Bill 89 aims to increase the age limit for purchasing e-cigarette products from 19 to 21 years; however, a recent study published in the Journal of Health Economics suggests that e-cigarette taxation that is more stringent tends to result in increased cigarette sales. While the specific tax rate has not been disclosed, a similar bill proposes a 35% tax on e-cigarette products based on wholesale prices. The bill is based on a recent tobacco report highlighting the need for more measures to reduce tobacco use in Alaska, especially among young people.
The Alaska State Senate recently introduced a new bill that proposes taxation and restriction measures for e-cigarettes, which is very similar to a bill that was vetoed by the governor last year.
The Senate Bill 89 not only proposes statewide taxation on e-cigarette products but also raises the age limit for purchasing them from 19 to 21 years old. The proposal is based on a recent tobacco report in Alaska.
The proposers believe that although Alaska has been positive in protecting minors from purchasing e-cigarettes and has greatly reduced the sale of e-cigarette products to minors, more measures are still necessary to reduce tobacco use in Alaska, especially among young people. The main goal is to protect children from nicotine addiction.
While the specific data of the proposal is not yet known, a similar bill that was vetoed last year proposed a 35% tax on e-cigarette products based on wholesale prices, which was considered an effective way to curb tobacco use. However, data has shown that this was not the case, which led to the bill’s rejection.
A study published in the Journal of Health Economics in 2020 indicated that imposing a high tax on e-cigarette products will ultimately lead to an increase in cigarette sales.
Michael Pesko, a famous tobacco economist in the United States, led a group of researchers to investigate the impact of taxation on tobacco harm reduction. Researchers tracked the weekly sales of most national retailers and the total sales of pharmacies, food stores, dollar stores, club stores, and mass retailers.
Compiled data shows that the burden of e-cigarette tax mainly affects consumer groups, as taxes often translate into higher prices. In addition, they found that the increase in retail prices would only lead to most e-cigarette users switching back to cigarettes. Pesko said, “Our research found that due to e-cigarette taxes, every one Juul pod that users give up will lead to the purchase of 1.9 packs of cigarettes.”
Tobacco control experts Dr. Kenneth Warner and Cliff Douglas commented that imposing high e-cigarette taxes might become a huge public health mistake when discussing Canada’s upcoming consumption tax.
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