Study: Minnesota's vaping tax prevented smokers from quitting

An economic study found evidence that Minnesota's vape tax discourages smokers from quitting, but it doesn't show how it impacts youth.

An economic study found evidence that Minnesota's vape tax discourages smokers from quitting, but it doesn't show how it impacts youth. Associated Press

When e-cigarettes started getting popular a few years ago, they were primarily marketed as a helpful step toward smoking cessation. The problem is, we don’t have a lot of data to prove that happens… or doesn't happen, for that matter.

And lately, news in the vaping world has not been great. A rash of people using vape pens were hospitalized with respiratory problems in recent months, and at least three died in Minnesota alone.

The Center for Disease Control and Prevention (CDC) now thinks the lung injuries may have something to do with vitamin E acetate inhaled while vaping THC. In the meantime, some states have responded by moving to warn against or ban vape products outright, at least temporarily. Others have gotten around to taxing them.

Minnesota's been doing that last part for a while, and was in fact the first state to impose a tax on this stuff. It started at 35 percent of wholesale price in 2010. In 2013, the tax was increased to a whopping 95 percent. As luck would have it, that gave curious researchers years of data to help answer a common question: Do e-cigarettes help people quit smoking, or not?

According to a new study from the National Bureau of Economic Research, evidence drawn from Minnesota suggests maybe not. Or, at the very least, that more expensive e-cigarettes make people less willing to try. The study, which used 2014-15 as its sample window, estimates 32,000 of the 600,000 adult smokers in Minnesota might have used e-cigarettes to quit smoking during that period if not for the heavy tax on vape products. 

“If this tax were imposed on a national level about 1.8 million smokers would be deterred from quitting in a 10-year period,” the study says. “The taxation of e-cigarettes at the same rate as cigarettes could deter more than 2.75 million smokers nationally from quitting in the same period.”

The authors are quick to qualify their findings. This study is about how taxes affect adult smokers. It doesn’t have any numbers on kids.

Between 2015 and 2017, vape use increased 78 percent among high schoolers, a rise that corresponded with an uptick of sales by Juul Labs Inc., from 2.2 million devices sold in 2016 to 16.2 million in 2017. Juul happens to contain among the highest nicotine content of any e-cig, according to the CDC.

Closer to home, the Minnesota Department of Health found that the number of 11th graders who vaped in the past month jumped by more than half in the past three years. Meanwhile, the number of eighth graders who had done the same doubled. To that end, Minnesota is suing Juul for allegedly targeting teens and getting them hooked. (The company denies that claim.)

As of December, 16 percent of patients hospitalized with vaping-related lung injuries nationwide were under 18. Some were as young as 13. By the end of the month, Minnesota alone had seen somewhere between 100 and 150 cases.

The authors of the study say the results suggest not taxing vapes could have “public health benefits.” But that’s only “one side” of the policy debate, which must be “weighted” against the potential impact on youth. If cheaper e-cigs are as appealing to teens as they are to smokers, then we’ve merely replaced an old vice with a new one.