Steve Forbes, chairman and editor-in-chief of Forbes Media, said that New York Governor Kathy Hochul’s proposed 75% tax on nicotine pouches would wrongly treat smoke-free products like cigarettes and could discourage smokers from switching away from combustible tobacco.
The proposal is part of New York’s fiscal 2027 budget and would apply a 75% wholesale tax to tobacco-free nicotine pouches such as ZYN. The plan does not include a lower tax tier for pouches and instead applies the same structure used for other tobacco products. Critics argue this approach treats non-combustible products the same as cigarettes, according to Spectrum Local News.
“New York Governor Kathy Hochul’s new budget proposal underscores why the disgust with so many of our leaders is warranted. When it comes to taxing pouches as if they were cigarettes, Hochul’s budget director ignorantly declared, ‘We see it as a distinction without a difference.’ Sure, and the moon is made of green cheese,” Forbes said.
“New York’s tax on nicotine pouches not only contributes to the public sector’s deepening credibility gap but also is a form of medical malpractice,” added Forbes. “Imposing a 75% excise tax on nicotine pouches on the basis that they’re like cigarettes may well discourage some smokers from switching to pouches, thereby raising the risk of such deadly tobacco-causing diseases as lung cancer.”
In New York City, cigarette tax data suggest high taxes have been linked to a growing illicit market. A 2024 littered-pack study found that only 16.6% of discarded cigarette packs carried a valid New York City tax stamp, down from 23.7% in 2015 and 39.3% in 2011. Most packs were either from out of state or lacked valid local stamps, according to Rutgers University.
Tax Foundation data show New York had the highest inbound cigarette smuggling rate in the country in 2023, with an estimated 57.9% of cigarettes consumed in the state coming from illicit sources. Analysts say high taxes that are not closely calibrated can push consumers toward untaxed or illegal markets rather than reducing overall use.
A March 18 WABC report citing a Morning Consult survey found that among 517 New York voters who participated in the most recent mayoral election, 46% supported Hochul’s proposed tax on nicotine pouches while only 26% strongly supported it. The results suggest limited intensity of support among respondents.
Steve Forbes is chairman and editor-in-chief of Forbes Media, the publisher of Forbes. The company produces coverage on business, markets, policy, and entrepreneurship across print and digital platforms, giving Forbes a wide audience for commentary on tax and regulatory issues.
