Changing weed and vape taxes could cost WA money. It’s worth the risk | Opinion
There’s nothing like a complicated excise tax conversation to make your eyes glaze over. If you’re inclined, it might be enough to make you want to take a hit off your vape.
As it happens, nicotine and cannabis are the very products at the center of two excise taxes under consideration in the Washington Legislature’s budgeting process. And I’d like to point to that habitual reach for either product as the reason we need to take both proposals seriously.
There’s good reason to think both taxes could keep young people from getting addicted or harmed by either substance.
Opponents argue the proposed taxes would bring in less money for the state than it already does with the taxes currently on the books for these products. Some of their reasons, though, make this sound like a good thing. Most importantly, people could move to using less or lower-potency products.
Research shows cigarette taxes have been effective at getting people to quit or never start smoking, especially young and lower-income people. Both taxes Washington is weighing would make cheaper nicotine and cannabis products cost more. Those are the very products that appeal most to younger and lower-income people.
I’m not a prohibitionist or a Just Say No type when it comes to addictive substances. But I am a realist, and I know two things. First, nicotine and cannabis have a cost to society. Second, we are still coming to understand the potential negative impacts of both products on young people.
The most worrying thing is this: recent research showed a heightened risk of some of the most serious psychiatric disorders out there for people who use cannabis as teens. The strength and frequency of the dose is a major factor in this risk.
And nicotine is absurdly habit-forming. Teens who use nicotine vapes sign up for that addiction at an early age, while their brains are developing. They also stand to spend the most money on their addiction over a lifetime. Finally, while nicotine doesn’t directly cause cancer, research on heavy metals in vapes shows they still put bodies at risk.
As Yasmin Trudeau, state senator for much of Tacoma in Washington’s 27th Legislative District, put it, “It is not healthy to vape.”
“We are talking about a product that is marketed to a certain demographic that does not have the ability or resources to ever quit,” she went on, referring to young and low-income people, “and we’re talking about something highly addictive.”
Not so cheap by the dozen
The proposed nicotine tax is in the state Senate’s budget proposal, and it raises taxes in a number of ways. It brings up the existing tax cigarettes and applies it to flavored vapes that have escaped these taxes until now.
The cannabis tax would switch to a model that’s based on how potent a product is, rather than its price tag. This tax was proposed in standalone bills that lawmakers haven’t voted on. But as they hash out the budget, legislators could add it in.
So why would the changes in these proposals make the state bring in less cash? For cannabis, it would be the result of taxing products based on how much they contain of the active ingredient.
In other words, these taxes hit cheaper products harder than the fancy stuff. Applied to vapes with the same amount of cannabis in them, a luxury vape would have the same total tax as the cheapest kind.
You could also save less money when buying in bulk. For example, a dozen weed gummies has a higher total tax if the state takes its cut based on potency and not the price tag.
The nicotine proposal would impose a higher tax on flavored vapes and cigarettes, which Trudeau says are far too appealing to minors.
All of this could make price-sensitive shoppers buy fewer cannabis or nicotine products overall, or buy less potent versions of them.
A potent formula for deterrence
Opponents call these proposed taxes regressive, and they’re basically right. When taxes go up more on a cheaper product than on a more expensive one, low-income people stand to lose the most money on a purchase.
A report from cannabis group Whitney Economics warns us with realpolitik sobriety that tax revenues would go down as a result of the proposed cannabis tax. Price-sensitive cannabis shoppers will opt to buy less, switch to less potent products, go to an illegal dealer or drive to another state. The same kinds of things could happen with more expensive flavored nicotine vapes and cigarettes. Legal sales in Washington, with their accompanying taxes, will go down.
There are some eye-gouging math reasons why that might not be exactly what happens with cannabis. The main thing is that cannabis prices have swung around in recent years, and recently settled on lower prices due to oversupply. Charging by potency could be a way to bring in a more reliable tax that doesn’t dip when prices go down the way that a sales tax does.
But even if industry folks are right and the state takes in less money, the biggest plus to me is this business about people opting to use less, and switching to less potent products. While minors can’t buy the products to begin with, the taxes could change the mix of products they can get from older friends, making them either less potent or simply less available.
We’re past the days of Just Say No and the punitive approach to drugs that filled our state and federal prisons. Now it’s about smart regulation.
What’s smarter than disincentivizing young people from using so much, or such high doses, of products that we’re coming to understand hurt them most of all?
