Last week, the Alaska State Legislature passed one of the highest tax hikes on non-combustible nicotine products in the country, proposing a 75% wholesale tax on nicotine pouches and vaping devices.
In response, the Consumer Choice Center sent a letter to Gov. Mike Dunleavy calling on him to veto the bill, and to ensure that consumers will have access to affordable harm reduction products:
- The result of these taxes will make many nicotine alternative products like disposable e-cigarettes, pods, and nicotine pouches more expensive than combustible cigarettes. This is a disservice to public health in Alaska as legislation should prioritize improving public health by reducing combustible smoking rates.
- Alaska’s cigarette smoking rates are already higher than the national average. It’s estimated that around 15.5% of Alaskans smoke combustible cigarettes, while the national average sits around 9.9%. This legislation does nothing to incentivize current adults who smoke to move towards a less harmful nicotine alternative.
- Increasing taxes on nicotine pouches and vapor products may be a short term revenue boost for the state, but any gains will likely be lost through government healthcare spending addressing smoking related-illnesses. Currently, Alaska spends around $100 million annually through Medicaid on health issues caused by smoking combustible cigarettes, amounting to around a $1,372 tax burden per Alaskan household. With SB24, we can expect these costs to increase.
- Taxing less harmful nicotine alternative products at a comparable or higher rate than combustible cigarettes sends a counterproductive message to consumers that non-combustible products are equally as dangerous which will disincentivize current adults who smoke to move away from traditional cigarettes.
- Instead of embracing policies like SB24, Alaska’s public health would benefit from recognizing the continuum of risk of nicotine products, an approach the FDA has adopted. FDA has authorized multiple e-cigarettes and nicotine pouch products as they have demonstrated they are “appropriate for the protection of public health”, and have noted that combustible tobacco is far more dangerous than non-combustible alternatives like nicotine pouch and vapor products.