A policy analyst said Gov. Kathy Hochul’s (D-NY) proposal to increase taxes on nicotine pouches could undermine harm-reduction efforts and discourage adults from switching away from cigarettes.
“It is deeply problematic that the governor seeks to impose additional taxes on products that can help adults quit smoking – particularly when New York spends only a fraction of its existing tobacco revenues on cessation and prevention,” Lindsey Stroud, a visiting fellow at Independent Women and founder of Tobacco Harm Reduction 101, wrote in a policy analysis.
“In 2024, New York collected $1.9 billion in state tobacco excise tax revenue, yet allocated only $46.7 million to tobacco control programs, including cessation, education, and prevention efforts,” Stroud wrote. “This amounts to just 2.5 percent of tobacco revenues – or approximately $0.025 for every $1 collected.”
Stroud has studied tobacco and vapor policy since 2016 and has testified before state legislatures on issues related to tobacco taxation and regulation. Tobacco Harm Reduction 101 is educational initiative focused on research and public policy related to alternative nicotine products and tobacco harm reduction.
Her analysis comes as New York legislators consider Hochul’s proposal, which would expand New York’s definition of taxable tobacco products to include nicotine pouches and apply a 75% excise tax similar to cigarettes.
Jeffrey Smith, a senior fellow at the R Street Institute, also said the proposal could undermine harm-reduction efforts in New York.
“We respectfully urge you to reconsider the proposed tax increase on nicotine pouches,” Smith wrote in a letter to Hochul, adding the policy “overlooks the significant role that reduced-risk nicotine products, such as pouches, play in helping individuals transition away from combustible cigarettes, the most harmful form of nicotine consumption.”
Smith, a neuroscientist, is a senior fellow in harm reduction at the R Street Institute. He said a risk-proportionate tax structure, where products are taxed based on their relative health risks, would better align with scientific evidence and support improved public-health outcomes for New Yorkers.
His letter said nicotine pouches are part of a broader category of reduced-risk nicotine products that can help smokers move away from combustible tobacco. Smith wrote that treating nicotine pouches the same as cigarettes could discourage smokers from switching to lower-risk alternatives.
Smith’s letter to Hochul framed the issue as a balance between public health and harm reduction, urging policymakers to consider differentiated taxation that reflects the relative risks of nicotine products rather than treating them as equivalent to cigarettes.
The R Street Institute is a nonprofit public policy research organization that focuses on limited government, free markets, and harm-reduction approaches to regulation. The group conducts research and advocacy across areas including public health, technology, insurance, and fiscal policy.
