February 24, 2025

Nebraska Legislature  
Committee on General Affairs
Capitol Room 1510
1445 K Street
Lincoln, Nebraska 68508

Dear Senator,

The General Affairs Committee will soon hold a hearing on LB 125.  On behalf of the 12,310 members and supporters of the Council for Citizens Against Government Waste (CCAGW) in Nebraska, I urge you to vote against LB 125.  This legislation places a 20 percent tax on the wholesale price of alternative nicotine products, which is identical to the current taxation of tobacco products that are not listed specifically in statute.  By lumping cigarettes together with tobacco harm reduction alternatives, this tax hike would raise the cost of quitting smoking, disproportionately harm low-income Nebraskans, expand the black market for smuggled tobacco products, and drive consumers and businesses out of state where taxes are lower.  

LB 125 will not prevent Nebraskans from using tobacco or electronic smoking devices.  Eliminating the tax advantage for electronic nicotine delivery system (ENDS) products over cigarettes will also negatively impact small businesses and threaten to roll back the historic decline in youth cigarette use.  Citizens Against Government Waste’s 2023 issue brief, “Tobacco Harm Reduction Products Should Be Promoted Not Prohibited,” describes the harm to both public health and public finances posed by punitive tax policy targeting ENDS products, including the failure of such taxes to raise the projected revenue.  The adverse consequences to public health include expanding the black market for unregulated illicit vaping products such as those products containing dangerous vitamin E acetate which have caused a “nationwide outbreak” of severe lung damage, according to the Centers for Disease Control and Prevention (CDC).  

Raising regressive taxes on tobacco alternatives like e-cigarettes, heated tobacco products, and tobacco-free oral nicotine products undermines the effectiveness of those products as tobacco harm reduction tools to reduce and deter cigarette smoking, especially for lower-income Nebraskans.  British health authority Public Health England found that vaping is 95 percent less harmful than traditional cigarettes and helps people quit smoking.  Combustible tobacco is demonstrably more harmful than the alternatives such as the nicotine pouches approved by the FDA in January 16, 2025 upon finding that the weight of academic evidence indicates that these products have helped many adult users switch away from cigarettes and other tobacco products without significantly increasing youth adoption.  Legitimate ENDS products help millions of ex-smokers avoid combustible cigarettes.  Tax policy should not make it harder to quit smoking.

Again, I ask that you oppose LB 125.

Sincerely,
Tom Schatz
President, CCAGW