May 22nd, 2015

US public health establishment proposes to increase fiscal deaths

WHO World No Tobacco Day

If only it was that simple…

According to the great sage Benjamin Franklin in 1789:

… in this world nothing can be said to be certain, except death and taxes

He probably didn’t envisage deliberately causing death by carelessly designing taxes. But to my surprise and dismay, that seems to be the idea of the public health establishment of United States.  I saw this story today:

Smoking Rates Continue to Drop in Many States: CDC – Doctors’ Lounge. What to make of this?

It seems the apparent good news in the title is not worth celebrating however, because the miserablist view is that people may be reducing smoking but they are not playing ball because they are using smokeless tobacco products or vaping. So it’s not a real public health win. CDC apparently believes that this could be addressed by raising taxes on smokeless tobacco and e-cigarettes.

“We know that increasing the price of tobacco is the most effective method to reduce consumption,” [Brian King, acting deputy director for research translation in the Centers for Disease Control and Prevention’s Office on Smoking and Health] said. “Since smokeless tobacco is taxed lower in most states along with other products like e-cigarettes, this could be contributing to the lack of decline in use,” he said.

The American Lung Association also seems to think that a tax hike on these other tobacco products – i.e. the ones that don’t do much harm to lungs – would be a good idea.

Dr. Norman Edelman, senior consultant for scientific affairs at the American Lung Association, said the association agrees that states spend too little on helping people quit tobacco.

“Smokeless tobacco is cheap,” he said. “States have not raised taxes on it the way they have on cigarettes, and high prices are one of the best tools we have in combating the use of tobacco,” Edelman said.

To state the obvious: because of the low price elasticity of demand for nicotine products (due to addictiveness, dependence or whatever you care to call it), the dominant effect would be realignment of demand between products within the nicotine category, not quitting nicotine. Given that smokeless tobacco or vaping is around 95% lower risk than smoking, the realignment of demand through tax changes proposed by CDC and ALA would be from lower harm to higher harm products. “Fiscal deaths” (increased mortality arising from a change in tax policy) would surely follow.  I guess it is unlikely that any of the desk-based perps cited above would be held to account – but let their economic naivety be recorded here.

12 comments to US public health establishment proposes to increase fiscal deaths

  • Jake Jacobsen

    Saw this Tweet last week from a city council member in Montgomery City, Maryland – @tomhucker “@ChefAJ22: nice try. No one’s stopping anyone from quitting smoking. But why would vaping be undertaxed? Why expect others to subsidize it?” He feels that e-cigs need to be taxed like tobacco..

  • HarryPlopper

    i would like to know how vamping or smokeless tobacco are “95% lower risk than smoking?” For what outcomes? Lung cancer, head/neck cancer, heart disease? Do you have empirical proof for this assertion with vaping? I don’t think it has been around long enough to make any conclusions about solid tumor risks. In addition, the potential for increased cvd risk with nicotine is concerning.

    • John Walker

      Harry Hi , Sweden has been conducting a ‘experiment with a particular kind of smokeless tobacco SNUS , for decades ( as i understand it SNUS has been ‘washed’ so as to greatly reduce any potentially harmful compounds.
      The results are
      “As a product used in the mouth snus cannot entail any risks for respiratory disease or lung cancer. Studies in Sweden indicate that there is no excess risk of oral cancer, and these findings are confirmed by the fact that Swedish men, with record high prevalence of snus use, have Europe’s lowest incidence of oral cancer. As far as cardiovascular disease is concerned studies in Sweden have compared risks between current snus users and never snus users finding an overall risk ratio of 1.08 which does not prove either increased or decreased risk in snus users.

      The lower morbidity and mortality of snus users is not only a benefit for individual health. It also means that snus users cause substantially less social costs for health care and loss of productivity than smokers. ”

      http://nicotinepolicy.net/lars-ramstrom/476-swedish-snus-can-contribute-to-the-attainment-of-a-high-level-of-health-protection-in-europe

      When any organic compound (leaves,wood so on) is, partially burnt -ie produces lots of smoke rather than just Co2 and water and ash, a lot of very dangerous compounds are produced.

      Obviously this does not happen with smokeless tobacco. Hence it is simply logical that consuming smokeless tobacco must be many orders of magnitude safer products that do not involve smoke, must

  • David Sweanor

    It is critically important that there be a rational discussion on taxation of cigarettes and their alternatives. There has been huge success in other areas (think about leaded and unleaded motor fuel) by using differential taxation.

    Having worked on tobacco taxation issues much of my career it is very discouraging to see efforts to restrict tax policy to an abstinence-only approach to nicotine. We know that a tax increase will only influence a subset of smokers to make a quit attempt, and we know that of those who do make a quit attempt the likelihood of total abstinence a year out is in the range of 3-5%.

    Achievement of the vast, vast, majority of the potential health gain is stymied by the hold of nicotine on smokers and the hold of an unscientific and inhumane quit-or-die mentality on too many people in the anti-smoking field.

    • Carole

      The number would be a surprise to most non smokers David.

      Do you know of any studies I could review that support the claim that “the likelihood of total abstinence a year out is in the range of 3-5%”?

      • David Sweanor

        Here is one, the lead author being John Hughes, one of the top global experts on smoking cessation: http://www.ncbi.nlm.nih.gov/pubmed/14678060

        As you will see, it says: “In terms of prolonged abstinence rates, a prior summary of 10 self-quitting studies, two other studies of self-quitters and three no-treatment control groups indicate 3-5% of self-quitters achieve prolonged abstinence for 6-12 month after a given quit attempt.”

        Self-quitting is of course the most common way to try to get off cigarettes. But there are also more involved and expensive treatment-based approaches. But when they boast about such things as ‘doubling the quit rate’, those numbers should be kept in mind. Neuroscience and genetics help us understand nicotine’s hold on people and it is troubling that so many campaigners choose to ignore such information.

        So the bottom line is that unless we sensibly deal with issues of nicotine by stopping a total-abstinence approach, much of what is done to discourage the use of less hazardous products invariably leads to consumption of the more hazardous ones. Tax policies that seek to remove incentives for smokers to switch to non-combustibles are, as Clive has pointed out, a cause of ‘fiscal deaths’.

  • Wow,
    This is the first time I see signs of “Tobacco Control” astroturfing on this blog. In response to Carole and Harry Plopper: email me on [email protected] and I’ll happily help you through the absolutely vast material and also Swedish health outcomes statistics, showing that with 100 years of never below 10% daily usage among adult males, there is not one single datapoint on severe adverse health effects from snus use in Sweden. In the last 30 years male use has surged to around 20% among males and smoking has dropped to 11%, lowest in the EU. These numbers are matched by lower incidence of ill health. There is still no sign of increase in serious adverse health effects resulting. Not 100 years ago, not 50 years ago and not now. Sweden has one of the world’s best data collection systems and statistics systems in the entire world, the notion that serious adverse health effects, exclusively among males who use smokeless, would have been missed for over a century is quite ridiculous. Cheerio!

    • Carole

      Hi Atakan, as a long term heavy smoker I believe that relapse rates over a 12 month period *could* be as high as 95-97% as stated.

      The reason I asked for a reference to evidence that supports Davids assertion is because I’m looking for evidence to test my own belief.

      Expect many newcomers to come seeking information as the battle to ban ENDS fires up. Paranoia can be a good thing but please think twice before calling people out as trolls. Movements don’t thrive when newcomers are made to feel unwelcome.

  • Bill Godshall

    For the past decade, Big Pharma financed CTFK http://www.tobaccofreekids.org/research/factsheets/pdf/0180.pdf
    (and their Big Pharma financed partners at ACS, AHA, ALA) have been lobbying state legislatures to tax all Other Tobacco Products (including smokeless tobacco, cigars, RYO, pipe tobacco, dissolvables) at the same rate as lethal cigarettes are taxed, and they’ve been deceitfully claiming the only reason OTP isn’t taxed at the same rate as cigarettes is due to a loophole in the law (as their campaigns typically are entitled “Eliminate the tobacco tax loophole).
    http://www.tobaccofreekids.org/research/factsheets/pdf/0355.pdf
    http://www.tobaccofreekids.org/research/factsheets/pdf/0169.pdf

    With funding from Michael Bloomberg and Bill Gates, CTFK and the WHO have been urging all nations to do the same.

    And Obama appointees at DHHS (and their funding recipients) have also advocated the same tax rates for OTP as for far more harmful cigarettes.

    During the past two years, many of these same THR opponents have been lobbying for lifesaving e-cigs to be taxed the same as deadly cigarettes. Meanwhile, for the past two years, Reynolds has been lobbying state legislatures to tax e-cigs at a modest rate that favors their cigalike e-cigs over e-liquid products sold by vape shops, and also favors their cigalike retailers by requiring all vape shops to obtain tobacco distributors and/or retailer licenses, and comply with all of their requirements).

    More than a dozen e-cig tax bills have been proposed in different states this year (as well as US Senate Democrat bill to tax e-cigs at the same rate as cigarettes).

    The good news is that the US government currently taxes cigarettes at $1/pack, taxes smokeless tobacco at about $.12/can, and imposes no tax on e-cigs. Also, most of the states (in the US) that absurdly tax smokeless tobacco at a similar or higher rate than cigarettes are states that have traditionally had very low consumption of smokeless tobacco products (which made it easier to lobby state legislators to increase the tax on smokeless, since there was little opposition).

    And despite all the news stories about e-cig taxation, just two states in the US tax e-cigs, with Minnesota’s tax at 95%, and North Carolina taxing e-cigs at $.05/ml of e-liquid (which was sponsored by Reynolds to gain a competitive advantage over vape shops in NC, which were also required to obtain and comply with tobacco retailer licensing laws).

    MN’s tax was passed back in 2010 due to stealth legislation that was touted by its sponsor and by the news media as banning e-cig sales to minors, but never mentioned the word tax or revenue, and the Fiscal Note falsely stated the bill would have no fiscal impact. At that time, MN didn’t post their existing statutes online, and I couldn’t afford to subscribe to Lexus/Nexus to obtain a copy of their tobacco tax law (which would have immediately tipped me off that the bill would also tax e-cigs). We didn’t find out that the MN e-cig tax passed until the Governor signed it into law, when the first news story revealed the bill would tax e-cigs.

    Interestingly, MN’s tax on e-cigs has harmed cigalike e-cigs far more than it has harmed e-liquid products, as a $5-$6 tax is typically paid to the state for each cigalike product sold, while vape shops in MN pay the 95% tax on highly concentrated 100mg/ml nicotine e-liquid, and then dilute/mix the liquid down to lower concentrations to sell to consumers. That’s why Reynolds, Lorillard and Altria have sponsored legislation to change the 95% tax rate to a $.30/ml tax on e-liquid (which would reduce the tax on cigalikes by 80%, and increase the tax on e-liquid by 800%).

    Ironically, the MN funded tobacco control group ClearWay has urged MN legislators to reject the tax change (saying that it would generate less tax revenue than the existing 95% tax on e-cigs, and because the tax change is being lobbied for by Big Tobacco). MN vape shop owners and lots of MN vapers have also urged MN legislators to reject the proposed e-cig tax change).

    The MN legislature has scheduled a special legislative session (since their regular legislative session adjourned) to enact a new budget, and the e-cig tax is in the mix.

  • Somehow sad, somehow funny how one of the world’s biggest industry tries to fight against ecigarettes and still, this battle is not an easy one and certainly not won. This shows exactly that it is all about the money when it comes to these dimensions and that health and essential factors for the public are faded from the spotlight.

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