Vaping products shouldn't be taxed like cigarettes

Because they're vastly less dangerous and doing so destroys their comparative advantage on price

The electronic cigarette (ecig) is not a gimmick. It's potentially the single most cost-effective life-saving innovation in the world. It's probably also the greatest single potential life-saver regardless of cost.

It's easy to see why. Smoking results in about 440,000 Deaths Per Year (DPY)in the US (1), and almost 6 million DPY worldwide (2). Cigarette use shortens life expectancy by about 10 years, resulting in 5.1 million Years of Potential Life Lost (YPLL) per year in the US, and about 58M YPLL per year worldwide. Cigarettes cause about one WWII worth of deaths every 10 years. Worldwide, the death rate per capita is still increasing. If universally adopted, ecigs would prevent almost all of this staggering loss at negligible cost.

So the main questions are: how easily can the smoking population switch to ecigs, and what can we as a society do to accelerate the process? The answers are that smokers could switch fairly easily, and we as a society should help them do so by avoiding or minimizing ecig bans, and refraining from taxing ecigs like cigarettes.

From the smoker's perspective, ecigs are eminently adoptable. Compared to other non-tobacco nicotine delivery systems, the ecig is preferable from the nicotine addict's point of view. The addict directly controls the dose, which is delivered immediately by inhalation (the route which delivers the desired effects most quickly). Competing cigarette substitutes aren't as good: patches can't deliver user-controlled dosage spikes, and nicotine gum and other oral delivery systems respond less quickly to user dose manipulation than the inhalation route. Revealingly, the most recent pharmaceutical smoking cessation offerings are nicotine inhalers, which differ only slightly from ecigs.

Ecigs are still not perfect substitutes for conventional cigarettes, which contain a variety of psychoactive chemicals which augment or amplify the effects of nicotine. These other contributors to the smoking experience could probably be incorporated into ecigs, increasing their adoptability further. Ideally, the ecig vapor composition would be decided by health and addiction experts with the major goal of displacing conventional cigarettes as quickly as possible.

Ecigs are safer for bystanders for the same reason they are safer for smokers: they don't make smoke. They do emit some nicotine, but not nearly as much as conventional cigarettes. Ecigs generate no so-called "sidestream vapor": only re-exhaled nicotine makes its way into the local atmosphere, not the continual stream of nicotine produced by the combustion of conventional cigarettes. The aerosol nicotine concentration produced by an ecig is about a tenth that produced by a conventional cigarette (3). Exactly how dangerous is nicotine?

This question is currently the subject of intensive study and debate, but everyone agrees that it isn't nearly as dangerous as conventional cigarette smoke. The reflexive urge to ban ecigs needs to be reconsidered. It's probably too much to expect non-smokers to altruistically welcome electronic cigarettes back into restaurants in an effort to save smoker's lives. Why should they? However small the risks associated with secondhand nicotine exposure, they probably aren't zero. However, if you're headed out for a pleasant evening's soak in alcohol it might be reasonable to admit that the additional damage done by nearby ecigs is probably negligible. The "designated smoking areas" of yore might also usefully be revived, at least where building ventilation permits. For conventional cigarettes there's no need to debate the reasonableness of any particular ban: they're all good, since they help stigmatize cigarettes and make them inconvenient, thereby increasing addict's incentives to quit. That simple logic cannot be applied to ecig regulation, where the question of what bans will do to the ecig adoption rate among smokers is hugely important.

The other big issue is taxation. Cigarette taxes as currently implemented are less effective at discouraging smoking than you might think. The demand for cigarettes among existing smokers is fairly inelastic, and inasmuch as it is not the black market tends to make up the difference. States can spend the sums collected however they want, and they choose to spend an average of only 1.9% of them on anti-tobacco programs (4). Spending more on prevention might actually stop people from smoking, which would in turn deprive cash-strapped states of a significant source of revenue. Most of the economic costs associated with smoking are borne by the federal government and by the economy as a whole, so poor states end up with little incentive to do anything useful on the tobacco front. Tobacco companies sometimes seem to regard the current tax arrangement as a hedge against more intensive state action against tobacco use.

Taxing ecigs like cigarettes is completely insane. No conceivable use of the funds obtained this way can possibly benefit the public as much as the comparative advantage conferred on ecigs by not taxing them. Teenagers, who constitute the most price-sensitive group of nicotine consumers and also the only group vulnerable to new nicotine addiction (5), are particularly likely to be pushed into the ecig camp by a price differential. Not taxing ecigs makes the existing taxes on conventional cigarettes dramatically more useful for public health. Unlike the ban issue, the push to tax ecigs is entirely a matter of the interests of politicians, not those of citizens. With increased public awareness of the situation, it should in theory be possible to force politicians to do the right thing.

What about the so-called gateway theory of drug use? Will the legions of teenagers currently experimenting with ecigs quickly move on to conventional cigarettes? It's a legitimate question. Much of the analysis of gateway drug theories has been hopelessly partisan and the underlying questions are statistically difficult to address, so at the moment it appears that nobody really knows if or when (for example) cannabis use tends to cause heroine use. However, the most honest attempts to investigate the issue indicate that if there is an effect, its fairly small even between drugs in which the more dangerous drug offers a dramatically greater psychological payout than the less dangerous one (e.g. heroine vs. cannabis) (6). It therefore seems unlikely that significant numbers of new nicotine users who start with ecigs will want to pay the far greater costs associated with conventional cigarettes for essentially the same payout. According to Doctor David Abrams, the executive director of the Schroeder Institute for Tobacco Research and Policy Studies at the anti-smoking advocacy group Legacy, "There is absolutely no evidence that using e-cigarettes makes [teens] more likely to use cigarettes." (7). In fact, smoking among teenagers appears to have declined recently even as ecig use has increased (8). Since almost all new tobacco use occurs among teenagers, any ecig-to-conventional-cigarette gateway theory would first need to demonstrate a surprising adoption pattern for the affected population.

So the bottom line is: ecigs are far safer than conventional cigarettes, fairly easy for smokers to adopt, and seem unlikely to cause new conventional cigarette addiction. They have the potential to save a staggering number of lives. Lets not mess things up by banning, stigmatizing, or taxing them.

(1) http://www.cdc.gov/tobacco/data_statistics/fact_sheets/health_effects/tobacco_related_mortality/

(2) http://www.who.int/mediacentre/factsheets/fs339/en/

(3) http://ntr.oxfordjournals.org/content/early/2013/12/10/ntr.ntt203.short)

(4) http://nnlm.gov/bhic/2013/12/16/just-1-9-percent-of-tobacco-settlement-and-taxes-goes-to-prevention/

(5) http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2582704/

(6) http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2835832/

(7) http://www.huffingtonpost.com/2014/03/06/e-cigarette-use-teens_n_4908986.html

(8) http://reason.com/blog/2013/11/20/cdc-belatedly-reveals-that-smoking-by-te