Vaping Taxes Reduce Use More Than Cigarette Taxes Reduce Smoking, Raising Harm Reduction Concerns

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Key Points:

• Study Warning: New AJPM Focus research finds vaping taxes cut use far more than cigarette taxes cut smoking, raising harm reduction concerns.

• Simulation Results: A $1-per mL e-liquid tax reduced vaping by up to 63 percent among young adults, but had minimal effect on smoking; a $1-per-pack cigarette tax cut smoking modestly and slightly increased vaping among adults.

• Combined Tax Impact: Raising both taxes reduced use of each product but risked limiting access to lower-risk options.

• Equity Concerns: Excise taxes are regressive – low-income adults are 3 times more likely to smoke and more likely to vape than higher earners.

• Harm Reduction Gap: E-cigarettes are significantly less harmful than cigarettes and twice as effective as nicotine replacement therapy for quitting, yet U.S. policy risks discouraging switching.

• Global Contrast: Canada, New Zealand, and the UK actively promote vaping as a quitting aid, while the FDA has authorized 39 products as beneficial to public health.

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A new study in AJPM Focus examines how excise taxes on combustible cigarettes, e-cigarettes, and both could influence tobacco and nicotine use among adults in the United States. Using a microsimulation model, the authors sought to estimate the five-year, population-level impacts of tax policy on both cigarette smoking and e-cigarette use among youth aged 12 to 17, young adults aged 18 to 24, and adults aged 25 years or older.

The researchers utilized the validated STOP (Simulation of Tobacco and Nicotine Outcomes) model, drawing on patterns in smoking and vaping from Waves 2 through 5 of the Population Assessment of Tobacco and Health (PATH) study to simulate one million individuals whose demographics matched those of the PATH Wave 5 population.

The study assessed four tax scenarios: no new taxes, a $1-per-pack increase in the cigarette tax only, a $1-per-milliliter increase in the e-liquid tax only, and a combined increase of $1 on both cigarettes and e-liquids.

Under the cigarette tax alone, combustible use decreased by 4 percent among youth, 19 percent among young adults, and 3 percent among adults 25 and older, while e-cigarette use increased slightly – by about 3 percent – among young adults and adults.

When modeling the e-cigarette tax alone, the authors found a 27 percent drop in vaping among youth, a 63 percent decline among young adults, and a 25 percent decrease among adults, with no change in smoking among youth, a 10 percent reduction among young adults, and a 2 percent decrease among adults.

The combined tax scenario yielded the largest overall reductions in both products: cigarette use fell by 5 percent among youth, 28 percent among young adults, and 3 percent among adults, while e-cigarette use declined by 27 percent, 62 percent, and 25 percent, respectively.

The results were most variable for young adults, and when tax effects were modeled to last only one year rather than five, the impacts were substantially weaker, with some cases showing later increases in combustible cigarette use. The authors noted limitations to their analysis, including the reliance on 2015–2019 trends and the assumption that these would persist beyond 2020, the absence of COVID-19 effects, and the omission of other policies such as flavor bans or age restrictions. Additionally, the tax impact estimates were drawn from varied literature using different datasets.

It is important for policymakers to recognize that excise taxes on both combustible and smoke-free products are regressive, disproportionately harming lower-income individuals.

In 2023, 23.9 percent of adults earning $25,000 or less were current smokers, compared to only 7.5 percent of those earning $50,000 or more. That same year, 9.9 percent of low-income adults were current e-cigarette users, compared to 6.2 percent among higher earners.

Particularly concerning is that the study found a greater decrease in use from a $1-per-milliliter e-cigarette tax than from a $1-per-pack cigarette tax, despite overwhelming evidence from public health authorities that e-cigarettes are significantly less harmful than combustible cigarettes and can help adults quit smoking.

As of August 2025, the U.S. Food and Drug Administration has authorized the sale of 39 e-cigarette products, deeming them “appropriate for the protection of public health.” In its most recent authorization, FDA cited that there was robust evidence of high quit rates among adults switching from cigarettes to these vapor products.

Other countries are actively encouraging switching: Health Canada states that researchers have established that completely switching to vaping nicotine is less harmful than continuing to smoke; the New Zealand Ministry of Health affirms that expert opinion holds vaping to be much less harmful than smoking tobacco; and in 2023 the UK government launched its “swap to stop” campaign to provide one million vaping kits to help smokers quit.

Scientific evidence also supports the superior effectiveness of e-cigarettes over traditional nicotine replacement therapy: a 2019 New England Journal of Medicine study found e-cigarettes twice as effective as NRT for quitting smoking, and a 2025 Cochrane review confirmed higher quit rates with vaping than with NRT.

Given these findings, policymakers should be cautious in relying on simulation-based projections and avoid imposing steep taxes on both combustible cigarettes and tobacco harm reduction products. Public health policy should focus on encouraging adults to switch away from smoking or quit entirely, while ensuring such measures are not regressive and do not restrict access to safer alternatives.

Nothing in this analysis is intended to influence the passage of legislation, and it does not necessarily represent the views of Tobacco Harm Reduction 101.