OSHKOSH, WI (WTAQ-WLUK) – Lawmakers have tried to stop the rise of vaping in younger generations by implementing taxes — but a concerning consequence may have resulted instead.
“When these e-cigarette taxes go in, there is a notable increase in cigarette sales,” University of Wisconsin – Oshkosh Economics Professor Chad Cotti said.
Cotti was one of the researchers who looked at vaping taxes and trends relating to tobacco control policies from 2013-2019.
“When e-cigarette taxes go in and they subsequently increase e-cigarette prices, you notice a notable decline — pretty strong decline in e-cigarette sales,” he said. “It’s very price sensitive — much more than you would see in traditional cigarette taxes.”
Cotti said the reason for the price sensitivity is the young age range of the buyers, although he says, on average, a pack of cigarettes costs $6.71 while e-cigarette fluid costs $4.82 per milliliter.
According to the Wisconsin Department of Revenue, the state collected about $1.5 million in vape product taxes in 2021. According to tax foundation.org, these products are taxed five cents per milliliter, which is tied for the lowest rate of any state.
Cotti says from a health perspective, it’s problematic to see results like these.
“While e-cigarettes aren’t good for you, there’s a lot of research to suggest they’re less bad for you than traditional cigarettes, so we don’t want to be driving people over there.”
Cotti said from a policy standpoint, it would be better for lawmakers to consider a new approach.
“If we were to think about them as more of a comprehensive tax policy, you probably are able to get better results because you’re not pushing people back and forth between the different products,” he said. “These taxes should be thought of more collectively.”
Retail scanner data from about 28,000 stores contributed to the findings.
