Why New Mexico House Bill 547’s tax increases undermine public health
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Why New Mexico House Bill 547’s tax increases undermine public health

The taxes in the bill would hurt efforts to reduce the smoking of traditional cigarettes and disproportionately harm low-income families.

  • New Mexico House Bill 547 would significantly increase taxes on e-cigarettes and marijuana vaping products. HB 547 would impose a 31% wholesale tax on vapor products and a tax equal to 25% of the product value on other tobacco products, such as cigars, smokeless tobacco, and nicotine pouches. 
  • Research from the Cochrane Review, Yale University, and many others. shows that noncombustible nicotine products, like e-cigarettes, present significantly less danger to consumers and benefit public health if smokers switch from cigarettes. Because e-cigarettes are safer than cigarettes, several have been authorized for sale by the Food and Drug Administration as “appropriate for the protection of public health,” with many more awaiting review. 
  • Sound public policy dictates that these products should be taxed at a significantly lower rate than cigarettes, if at all. However, by substantially increasing taxes, HB 547 would narrow the price differential between vaping products and cigarettes, deterring smokers from switching to safer alternatives. “We find evidence that higher traditional cigarette tax rates reduce adult traditional cigarette use and increase adult e-cigarette use. Similarly, we find that higher e-cigarette tax rates increase traditional cigarette use and reduce e-cigarette use,” researchers from Georgia State University found.
  • E-cigarette taxes are highly regressive. Half to three-quarters of smokers are from low-income communities. Thus, tax increases on vaping products make it harder for low-income smokers to switch from cigarettes to safer alternatives. According to multiple studies, including analysis by the Progressive Policy Institute, e-cigarettes are the most effective tool for quitting smoking.
  • Dramatically higher taxes on legal marijuana vaping products could also drive consumers back to the illicit market, where product contamination is a much greater risk. In 2019, thousands were injured, and 61 died from using black-market cannabis vape cartridges laced with a thickening agency called vitamin E acetate. Punitive taxes on legal marijuana products, such as those proposed in HB 547, drive consumers to riskier unregulated, but cheaper, alternatives on the black market. Meanwhile, multiple studies demonstrate that neither vaping nicotine nor using marijuana is a gateway to other more harmful substance use.