Landon Epperson, author and associate for Americans for Tax Reform, said that Delaware’s proposed tobacco tax hike is a misguided revenue measure that would raise costs, hitting working families and small businesses the hardest, while discouraging lower-risk alternatives.
The proposal comes as Delaware lawmakers consider HB 215, which would sharply increase taxes on cigarettes and other nicotine products. Epperson said these changes are not about fairness but about generating revenue ahead of an election year.
“Delaware and Maine are pursuing aggressive tobacco and nicotine tax hikes that target not only cigarettes, but also harm-reducing alternatives like pouches and vapor products,” said Epperson. “Yes, you read correctly. Tobacco-free products like vapes and pouches are subject to a tobacco tax; it makes perfect sense!”
Epperson added, “These changes have nothing to do with fairness and everything to do with revenue. Worse still, the new taxes take effect just before an election year, conveniently raising cash while lawmakers avoid tough budget reforms. Delaware and Maine should focus on sustainable spending reform, not tax hikes that hit working families and small businesses the hardest,” according to Americans for Tax Reform.
Delaware’s HB 215 would sharply increase tobacco-related taxes across multiple categories, not just cigarettes. According to the bill text, the cigarette tax would rise from $2.10 to $3.60 per pack, the vapor tax would jump from $0.05 to $0.25 per milliliter, and taxes or fees on other tobacco products and retailers would also rise. It supports Epperson’s argument that the proposal is a broad tax increase, not a narrow health fix.
Delaware’s own tobacco fact sheet shows smoking is already concentrated among lower-income residents, meaning broad excise hikes are likely to fall hardest on people with the least room in their budgets. The state reported that smoking prevalence was highest among adults earning less than $24,999 a year, at 26 percent—far above higher-income groups—giving weight to the argument that the tax hike would be especially burdensome for working-class Delawareans.
Research summarized by the American Economic Association finds that cigarette taxes have become more regressive: the lowest-income consumers paid roughly two percent of their income in cigarette taxes in 1992, rising above 2.5 percent by 2014; meanwhile, higher-income groups stayed near one-tenth of a percent (0.1 percent), evidence that such increases fall hardest on households with less financial cushion.
According to the Tax Foundation, California—one of the highest-taxed cigarette states—now leads in cigarette smuggling nationwide; it estimates over half (52.5 percent) of cigarettes consumed there in 2023 were not purchased legally in-state. The analysis highlights a strong relationship between higher excise taxes and increased black market diversion.
ATR is a taxpayer advocacy organization founded in 1985 promoting lower taxes and limited government according to its website.
