Other states making the e-cigarette tax mistake

Now that North Carolina has stubbed its tax reform toe with a new tax on e-cigarettes, Jeff Stier and Gregory Conley document for National Review Online that at least two other states with Republican governors are considering the same idea.

There’s an interesting phenomenon playing out in both New Jersey and Ohio: Two of the country’s most prominent conservative Republican governors have proposed new taxes of a sort that haven’t appealed even to traditionally liberal, tax-hungry state legislatures in states like Massachusetts and Washington.

New Jersey governor Chris Christie and Ohio governor John Kasich have asked their legislatures to enact an excise tax, or sin tax, on the sale of electronic cigarettes (e-cigarettes). The stated goal of both governors is to equalize the tax applied to e-cigarettes with that applied to combustible-tobacco cigarettes.

While the product’s common name may be misleading, e-cigarettes are not cigarettes. They are smoke-free, tobacco-free, battery-operated devices that allow smokers to get nicotine without inhaling burning-tobacco smoke. Currently, these products are subject to sales tax, like any other consumer product, in Ohio, New Jersey, and 46 other states. …

… E-cigarettes are a prime example of the free-market insight that the private sector is better than government at addressing societal problems. E-cigarettes may do more good for public health by getting people to quit smoking than any tax, warning label, or self-righteous taxpayer-funded ad campaign has ever done. So we are bewildered as to why Governors Christie and Kasich would proactively seek to undermine this private-sector approach to smoking by, of all things, taxing it.

Our best bet is that it has nothing to do with public health per se, and everything to do with another kind of addiction. These proposals underscore the fact that state governments are more addicted to cigarettes than most smokers are: At least some smokers can quit — but states don’t give up tobacco taxes. Now that smokers are quitting tobacco and using the dramatically less risky alternatives, those responsible for state budgets want to keep their hands in our pockets by taxing tobacco-free e-cigarettes. The governors’ approach to the real public-health heroes who have quit smoking with e-cigarettes? Pay up.