Washington State’s Tax Bill Shows Why States Keep Getting Harm ReductionWrong

You can't easily reduce America's flagging faith in government to any single factor. But if there's any one thing that surely contributes to the electorate's frustration with lawmakers, it's the seemingly endless litany of examples demonstrating how government gets in its own way. That's about to happen, once again, with Washington state's Senate Bill 6129 – the latest entry in a long parade of tobacco tax proposals that promise both revenue and public health benefits, only to deliver neither.

The script has become depressingly familiar. A state legislature, hungry for revenue and looking for a political win, turns to tobacco taxation as a gimmee. Massive, indiscriminate tax increases pass. And then reality sets in: revenues fall short of projections, consumers adjust their purchasing patterns, and the promised public health improvements prove elusive – or counterproductive. Smart policy and smart politics demand better.

The core of the problem is that most of these tax proposals treat all nicotine products as equally dangerous. They're not. It would be ideal, of course, if policymakers could convince smokers to abandon tobacco products altogether. But until someone invents that magic wand, there are still enormous health advantages to encouraging smokers to switch to vapes, nicotine pouches, and other non-combustible alternatives. These products are 90 to 95 percent less harmful than cigarettes. Yet state tax codes rarely reflect this distinction. By taxing these alternatives at rates equal to – or sometimes higher than – traditional cigarettes, states are actively discouraging smokers from making the switch.

The other persistent failure is overestimating how much revenue these taxes will actually generate. Policymakers ignore basic economic behavior. When price differentials between neighboring states become large enough, consumers respond predictably: they drive across state lines, order online from lower-tax jurisdictions, or turn to illicit sources. The higher the tax, the more rational these alternative purchasing routes become. Revenue projections that assume consumers will simply absorb massive price increases and continue purchasing locally are fantasy, not fiscal planning.

Washington's SB 6129 embodies all of these mistakes at once. The bill would impose a 90 percent excise tax on most non-cigarette nicotine products and 100 percent on flavored versions, while raising the cigarette tax by 65 percent – from $3.025 to $5.00 per pack, with an additional 50-cent surcharge on flavored cigarettes. If enacted, Washington would have some of the highest nicotine product taxes in the country.

The state is already seeing the consequences of this approach. On January 1st, Washington implemented a 95 percent excise tax on nicotine products. Early reports indicate that consumers are responding exactly as economics would predict – purchasing products in neighboring Idaho to avoid the massive price increase at home. Indiana tried this with expected terrible results.

More troubling still is the bill's decision to tax vapes and nicotine pouches at rates matching or exceeding those on combustible cigarettes. When smokers transition to these alternatives, they substantially reduce their exposure to the chemicals that cause cancer and emphysema. Tax policy should encourage that switch, not penalize it. SB 6129 does precisely the opposite, removing any economic incentive for smokers to choose the less harmful option.

For what are often very different reasons, Republicans and Democrats are prone to anger when government doesn't work. Conservatives are, by nature, skeptical of regulation that punishes consumers. Progressives are frustrated when bureaucratic rigidity gives government a bad name. Both camps should recognize that Washington's approach fails on their own terms: it won't raise the revenue promised, and it won't improve public health.

The path forward isn't complicated, but it requires abandoning the historical impulse to tax punitively regardless of relative risk. Tax structures should reflect actual harm levels – lower rates for products that do less damage. Revenue projections should account for consumer behavior, not ignore it. And investment should flow to proven cessation and harm reduction strategies, not just to treasury coffers.

Washington still has time to course-correct on SB 6129. Other states pursuing similar approaches should take note. The question isn't whether to address tobacco use—it's whether to do so with policies designed for actual success, or to repeat the same failed playbook yet again. The track record suggests it's time to try something different.