Jeffrey A. Singer, a senior fellow at the Cato Institute, said a proposed New York tax increase on nicotine pouches could undermine harm-reduction efforts and push consumers toward illicit markets.
“A proposed 75 percent excise tax on nicotine pouches risks undermining the very public health goals lawmakers aim to promote,” Singer wrote in an article published on the Cato Institute website. “By significantly increasing pouch prices compared to cigarettes, the tax would diminish the financial incentive for smokers to switch to a much safer alternative—price differences are important, and reducing them predictably hinders harm-reducing substitution.”
“The tax would also encourage the growth of illegal and unregulated markets, as high taxes have historically driven consumers toward illicit channels with unknown quality and safety,” Singer added. “Additionally, it would unfairly penalize adult smokers who have chosen a lower-risk option, effectively taxing harm reduction instead of supporting it.”
Singer is a practicing surgeon and health policy specialist whose work focuses on harm reduction, tobacco regulation, and the intersection of public health and government policy.
He said pricing differences between cigarettes and lower-risk nicotine alternatives play a central role in influencing consumer behavior, and narrowing those gaps can reduce incentives for smokers to transition away from combustible products, as reported in the same analysis.
He also wrote that tobacco tax policy often follows a predictable cycle in which higher taxes are intended to reduce consumption but can create unintended consequences, including illicit markets and reduced switching to less harmful alternatives.
The debate comes as Gov. Kathy Hochul (D-NY) proposed applying a 75% excise tax to nicotine pouches under her executive budget proposal.
Other policy organizations have raised similar concerns. A letter from the R Street Institute warned the proposal could overlook the role reduced-risk nicotine products play in helping smokers move away from combustible cigarettes and urged policymakers to consider a risk-proportionate taxation framework, as reported by Empire State Today.
That letter said treating nicotine pouches the same as cigarettes could discourage switching behavior and undermine harm-reduction strategies,
Assemblywoman Michaelle Solages (D-NY-22) said of Hochul’s tax increase proposal that creating a new tax is not the right approach to address nicotine use, saying, “For me, creating a new tax is not the correct way.”
The Cato Institute is a Washington-based public policy research organization that focuses on limited government, free markets, and individual liberty, and regularly publishes research on health policy, regulation, and harm-reduction strategies, as reported by the organization (https://www.cato.org/about).
