Revenue-Hungry Rhode Island Seeks 80% Tax on Lifesaving E-Cigarettes

Tobacco-Free E-Cigarettes Help Tobacco Smokers Quit; Taxing Them Like Tobacco Cigarettes Would Harm Smoking Cessation Efforts

As Rhode Island Goes, So Goes the Nation?

Washington, D.C. – National Center Risk Analysis Division Director Jeff Stier is submitting testimony today to the Rhode Island legislature in opposition to a plan by Rhode Island Governor Lincoln Chaffee to impose an 80% tax on e-cigarettes.

Chaffee believes that “electronic cigarette laws should mirror tobacco product laws.”

Stier says Chaffee’s policy would lead to unnecessary deaths.

“The Governor’s budget includes an 80% tax on the manufacturer’s price of e-cigarettes. This would have the effect of making the most commonly purchased e-cigarettes more expensive than real cigarettes. If this tax is included in the final budget, it may have the unintended consequence of discouraging smokers from switching to dramatically less harmful e-cigarettes.”

He adds: “The consequence of fewer e-cigarette sales is a deadly one. The vast majority of those who purchase e-cigarettes are adult smokers trying to quit. So discouraging the use of e-cigarettes, the stated purpose of the excise tax, would actually incentivize smokers to continue smoking.”

“It is critical to note that e-cigarettes are attractive alternatives to cigarettes, in part because, like the FDA-approved gum and patch, they provide nicotine,” Stier continues. “Nicotine, while highly addictive, is not particularly harmful at the levels at which it is consumed. While nobody should initiate use of any nicotine products, be they pharmaceutical, e-cigarettes or certainly tobacco-burning cigarettes, legislators should know that it’s not the nicotine that makes cigarettes dangerous. It’s the burning tobacco that makes traditional cigarettes harmful to users and those exposed to the smoke. E-cigarettes contain no tobacco.”

Stier is suspicious of tax-supporters’ claims that taxing e-cigarettes is the best way to reduce their sale to minors. “If the Governor truly wanted to prevent the sale of e-cigarettes to minors, he would not have vetoed 2013 S 633 Substitute A last July,” Stier says. “That bill would have simply banned the sale of e-cigarettes to minors.”

Stier supports banning e-cigarette sales to minors.

Stier believes the proposed tax is a revenue-raising measure, but says the tax, if approved, is unlikely to raise revenue: “In Rhode Island, sin taxes are likely to lead to more out-of state sales, where there are no excise taxes on e-cigarettes. As such, the likely result of this e-cigarette tax would be lower revenue for the state, while yielding little or no impact on the use of e-cigarettes.”

A copy of Stier’s full written testimony is available here.

Stier’s testimony is being submitted in writing due to the weather-related cancellation of his formal testimony before the Rhode Island Senate Finance Committee today.

New York City-based Jeff Stier is a Senior Fellow at the National Center for Public Policy Research in Washington, D.C., and heads its Risk Analysis Division. Stier is a frequent guest on CNBC, and has addressed health policy on CNN, Fox News Channel, MSNBC and network newscasts. Stier’s National Center op-eds have been published in top outlets, including the Los Angeles Times, the New York Post, Newsday, Forbes, the Washington Examiner and National Review Online. He also frequently discusses risk issues on Twitter at @JeffaStier.

Stier has testified at FDA scientific meetings, met with members of Congress and their staff about science policy, met with OMB/OIRA officials, and submitted testimony to state government legislative hearings. Most recently, he testified before the science committee of the New York City Council about that city’s ban on public use of e-cigarettes and submitted testimony to the Oklahoma legislature on the same matter.

Stier has testified about e-cigarette regulation before the New York City Council, submitted testimony to a joint committee of the Oklahoma legislature and has met with federal officials at the Office of Management and Budget and the Food and Drug Administration on the issue.

He’s written about the topic for the New York Post, the Huffington Post, the Des Moines Register, and elsewhere.

Stier previously worked in both the office of the mayor and in the corporation counsel’s office during the Giuliani administration in New York City. His responsibilities included planning environmental agency programs, legal analysis of proposed legislation, and health policy. Mr. Stier also is chairman of the board of the Jewish International Connection, NY. While earning his law degree at the Benjamin N. Cardozo School of Law, he served two terms as editor-in-chief of the Cardozo Law Forum.

The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, less than four percent from foundations, and less than two percent from corporations. It receives over 350,000 individual contributions a year from over 96,000 active recent contributors.

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The National Center for Public Policy Research is a communications and research foundation supportive of a strong national defense and dedicated to providing free market solutions to today’s public policy problems. We believe that the principles of a free market, individual liberty and personal responsibility provide the greatest hope for meeting the challenges facing America in the 21st century.