Abstract
Taxes are a demonstrably effective method to suppress tobacco use. This study examined the effects of the tobacco parity (i.e., imposing taxes equally on all tobacco products) and the harm reduction (i.e., applying taxes in proportion to the products’ levels of harm) tax proposals on demand and substitution across products. A crowdsourced sample of cigarette smokers (n = 35) completed purchasing trials with increasing tax magnitudes across different tax tiers in the Experimental Tobacco Marketplace in a repeated-measures design. Products were placed in three tax tiers (high, medium, and no tax) according to each proposal’s goal. The results indicated that total nicotine (mg) purchased was not significantly different between the proposals, with higher taxes yielding lower demand. However, as taxes increased, the tobacco parity proposal decreased the purchasing of all tobacco products and increased the purchasing of medicinal nicotine (i.e., the no tax tier). Conversely, the harm reduction proposal resulted in greater purchases of electronic nicotine delivery systems and smokeless tobacco (i.e., the medium tax tier). These findings support tobacco taxation as a robust tool for suppressing purchasing and suggest that differential taxation in proportion to product risk would be an effective way to incentivize smokers to switch from smoked to unsmoked products. Further studies should investigate the unintended consequences of their implementation.
Highlights
While prior tobacco control efforts have focused primarily on conventional cigarettes, the tobacco marketplace’s growing complexity provides the tobacco user with numerous products
Two main findings were observed: (1) no significant differences were identified in the total nicotine purchased from tobacco/nicotine replacement therapy (NRT) products across trials between the two tax proposals, (2) the tobacco parity and the harm reduction tax proposals decreased purchases from the high tax tier and increased substitution of no tax tier products as tax rates increased, but only the harm reduction tax proposal significantly increased purchases of the medium tax tier products
The total nicotine purchased from tobacco/NRT products decreased as taxes increased but did not differ between the proposals
Summary
While prior tobacco control efforts have focused primarily on conventional cigarettes, the tobacco marketplace’s growing complexity provides the tobacco user with numerous products. These products vary in harm and risks and may produce diverse outcomes, such as increased nicotine dependence [1], long-term use [2], and a reduced likelihood of quitting [3] due to poly-tobacco use. Sales data suggest that introducing electronic nicotine delivery systems (ENDSs) taxes in Minnesota may have increased cigarette smoking prevalence and reduced quitting in the short term [7]. The taxation of tobacco in the United States (US) is complicated by diverse taxing approaches across products and jurisdictions.
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