Trump Wants $100M in Fees from the Vape Industry


by Jim McDonald

 

The Trump administration’s proposed federal budget for fiscal year 2020 includes user fees on vaping manufacturers. The fees, previously assessed only on tobacco companies, pay for the operations of the FDA Center for Tobacco Products (CTP), including regulatory and enforcement activities, and public education like the $60 million Real Cost campaign.

Tobacco user fees have never before been applied to products that don’t contain actual leaf tobacco. Currently the FDA assesses and collects user fees from manufacturers and importers of cigarettes, snuff, chewing tobacco, cigars, roll-your-own tobacco, and pipe tobacco.

“The new resources will support the FDA in its continued efforts to create a modern regulatory framework for the appropriate oversight of e-cigarettes and in taking continued steps to reduce youth use of all tobacco products,” said FDA Commissioner Scott Gottlieb. “One of our most important public health efforts is to continue standing up a framework to make sure we can put e-cigarettes through an appropriate series of regulatory gates, and aggressively confront youth use of these products to make sure children don’t become addicted to nicotine.”

The 2019 CTP user fee assessments total $712 million. Of that, $616 million comes from cigarette assessments.The 2020 fiscal year for the federal government begins Oct. 1, 2019.

The Trump proposal would increase the user fee cap by $100 million to a total of $812 million in fiscal year 2020, and would index future “tobacco-related product” user fee assessments to inflation. The $100 million is expected to come from the vapor industry.

“This proposal would ensure that FDA has the resources to address today’s alarming rise in youth e-cigarette use as well as new public health threats of tomorrow,” claims the White House. “New tobacco or nicotine products that are regulated by FDA should also pay a user fee, just as other tobacco related products that are subject to FDA’s user fee.”

New Hampshire Democratic Sen. Jeanne Shaheen, who recently introduced a Senate bill to assess user fees on vaping products, was positive about the proposal. Shaheen’s bill calls for assessing fees of $150 million, or two percent of vape sales during the previous (2019) fiscal year. “I hope to work with the administration as I rally bipartisan support for my legislation in Congress,” Shaheen told the Washington Post.

The administration is proposing a total FDA budget of $6.1 billion. Of that, $2.8 billion is from user fees — about $2 billion from drug and medical device companies, and most of the rest from tobacco (and vape) manufacturers. The 2020 FDA budget, if approved by Congress, would include about a seven percent increase in funding over the 2019 budget. The budget including the new user fees must be approved by Congress

No one from the White House has explained how imposing user fees on non-tobacco nicotine products fits with President Trump’s stated mission to reduce regulations and lower taxes. It is also unclear why the administration expects the vaping industry to contribute one-eighth of the CTP’s total budget, when vapes represent a much smaller portion of the entire tobacco products market. How was the $100 million figure arrived at? No one knows.

Currently, tobacco user fees are calculated using a complex formula that includes a multiple of the federal excise tax rate for each type of tobacco product. It isn’t known whether the Trump administration’s proposal means that a federal tax on vapor products will also be imposed, or if a new system will be used to assess user fees for e-cigarettes. Either would require amending the Tobacco Control Act.

User fees are not technically taxes, and are not charged directly to consumers. But as with any cost to manufacturers, the user fees have to be passed onto buyers or taken from profits. Manufacturers and importers will raise the prices vapers pay to offset the user fees. Higher prices mean fewer smokers will switch to vaping.

Reactions from the vaping industry and from conservative activists were swift and negative.

“President Trump should fire whoever duped his office into proposing this $100 million tax increase on adult consumers trying to quit smoking,” said American Vaping Association president Gregory Conley. “This is nothing more than a virtue tax that will cost jobs and lives.

“Most absurdly, the proposal says nothing about how each manufacturer’s share of the fee is to be calculated,” Conley added. “Cigarette and smokeless tobacco user fees are determined by breaking down the share of federal excise taxes paid by each company in those industries. What exactly is the FDA’s grand plan to determine how much an e-liquid manufacturer is required to pay yearly?”

“It’s unfortunate, however, that a proposed tax increase championed by Gottlieb has made its way into the President’s budget,” said Paul Blair of Americans for Tax Reform. “We’re hopeful that Congress rejects this misguided assault on the life-saving potential of e-cigarettes and that the Senate replaces Gottlieb with someone who champions the cause of consumer freedom, innovation, and tobacco harm reduction.”

 

 

 

 

 

Article originally posted here.

 

Share:FacebooktwitterredditpinterestlinkedintumblrmailFacebooktwitterredditpinterestlinkedintumblrmail

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Translate

Follow WordPress.com on WordPress.com

Follow Us

FacebooktwitterpinterestyoutubetumblrinstagramFacebooktwitterpinterestyoutubetumblrinstagram

Donate

Support The Vapor Ninja on Patreon!

Recent Posts

Recent Comments

Categories

Archives

Twitter Feed

Thursday, August 8th, 2019 at 7:49am
Sacramento County is considering banning flavored e-liquid, including the unincorporated areas !
Click link to see how you can save the flave.
https://t.co/5SolBjn1Uq
Wednesday, August 7th, 2019 at 9:20am
@mihotep Here's the story.
They say: It’s better than putting diesel in a car, says Edwards, because the constant running rate of the gennie uses the fuel more efficiently than idling and accelerating in a car.
I had thought of this. https://t.co/jaTwqLIM6w
Friday, August 2nd, 2019 at 10:43pm
@Biebert @KnowNicotine @JenniBiebertMKE When you point at someone, there are three fingers pointing back at you.
Friday, August 2nd, 2019 at 8:50am
Image is the data of who uses nicotine.
Take a gander at who we're denying alternatives to.
These are some of the reasons people use #nicotine, obviously.
There is an apparent link between nicotine and anti-psychosis. https://t.co/Nj3CTnmaoM
TheVaporNinja photo
Friday, August 2nd, 2019 at 8:31am
The PBS story was actually about a 'THC cartridge' that a teen had gotten from a random adult.
Re-labelled as 'Vaping puts teen in hospital', Aaron retweets it without investigation, saying 'ah HA look at THIS, u angry vapers!'... but no. You're insulting 1/2 of your supporters
Friday, August 2nd, 2019 at 8:31am
@KnowNicotine , if you devoted as much energy to anti-vaping rhetoric, and re-tweeting PBS and other coroporate LIES about vaping, towards truly knowing nicotine, I think we'd all appreciate it very much.
I'm not an 'angry vaper',don't think vaping is the only way,but please stop
Friday, August 2nd, 2019 at 8:13am
@KnowNicotine Ummmm
These are the only choices ?
You think nicotine addiction begins with vaping ?
Haven't you read the same facts we all read ?
This is not looking good for you @Biebert , really.
(Click the image for full view)
We all wonder where your sudden anti-vaping agenda has come from https://t.co/Fd1UiaYkyF
TheVaporNinja photo
Friday, July 5th, 2019 at 11:15pm
@eaze Vaping is indeed the future.
Smoke has carbon, and is responsible for most lung problems resulting from combustion.
I suggest investing in a GOOD herb vape, at least $100-200 vape.
The others simply combust the herbs.
So many ppl dislike vaping bcuz they tried a bad device.
Friday, July 5th, 2019 at 3:44pm
@Kelpalots @DJColonelCorn A meta-study (I think around 2012) estimated that at the time ~17,000 people/year (in the US) died from complications arising out of internal gastrointestinal bleeding events thought to have been caused by NSAIDs.
(Thanks to Lightning on Disqus for this)
Yes, @Kelpalots, they do

Printerest Feed