Is The ‘Vape Tax’ A Small Price To Pay To Save Vaping In America?
President Trump may have handed a lifeline to the beleaguered US vape industry with the proposal to introduce a so called ‘user fee’ on e-cigarettes.
I’ll explain why I think that soon…
OK and as you might expect opponents to the plan – that still has to pass a vote in Congress – are collectively up in arms over the idea calling it a ‘tax on vaping’ by any other name and suggesting its introduction is nothing short of a ‘punishment’ for smokers quitting lit tobacco and taking up vaping.
Big Tobacco currently pays a ‘user fee’ on their products which is expected to raise $5,570,711,592 this year. That cash funds the Food and Drugs Administration’s Center for Tobacco Products. This part of the agency monitors and implements the Family Smoking Prevention and Tobacco Control Act. In effect Big Tobacco [and other corporations] pay for the US Government to ‘police’ their own activities.
Trump’s big idea is to add vaping and e-cigarettes into this ‘user fee’ group clearly marking all things vape as tobacco – something it is clearly not! His administration believes that by adding e-cigarettes to this yearly cash-grab the FDA coffers will be swollen by upwards of an extra $100million each year. This says Trump will go some way to tackle the purported ‘teen vape epidemic‘ – which as we well know is a fiction…
Trump made the announcement yesterday as he unveiled his wider budget plan saying it:
…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.
The current head of the FDA – Scott Gottlieb who recently resigned, said:
Importantly, the budget also seeks $100 million in new tobacco fees, and includes manufacturers and importers of deemed tobacco products, in particular and especially electronic nicotine delivery systems (ENDS), and certain other products within the FDA’s tobacco user fee assessments…E-cigarettes, in particular, represent an increasing share of the tobacco marketplace.
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.
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.
All a bit bland from the normally far more outspoken soon to be ex commissioner…not sure if we can read anything into that…
The news was not well received by vape advocates from the US to say the least…
Vape Advocates Vociferous Over ‘Vape Tax’
Vaping advocates were quick to condemn the move on social media last night with a spokesman for the American Vaping Association reportedly saying:
President Trump should fire whoever duped his office into proposing this $100 million tax increase on adult consumers trying to quit smoking.
However public health lawyer Desmond Jenson said he expected JUUL and Big Tobacco would pay the brunt or around 75% of the ‘user fees’ – and it would NOT passed onto consumers:
Taxes and fees are different and these fees apply to manufacturers.
These fees are apportioned based on sales so almost all of this $100 million will be paid by Juul, Altria, BAT, JTI and a handful of other large tobacco product manufactures.
This was attacked as wrong with Vaping 360 pointing out the fee would affect smaller vape companies:
The small independent vaping manufacturers represent 30-50% of the market. So by no means will “almost all” be paid by JUUL and the tobacco companies.
Furthermore, the vaping market isn’t close to being 12% of tobacco sales. How was this $100 million arrived at?
Closer to home and award winning YouTube reviewer Victor Mullin aka Vaping With Vic didn’t hold back slamming those who thought Trump might be a friend of vaping writing on Facebook:
Gullible fucking fools…
Now you have your saviour Trump, saying he wants to put a tax (cause that’s what it is…a TAX) on e-cigs…to fund the very organisation you hate… the FDA…
You gullible idiots…
Tough talking indeed…
Is This A Peace Pipe From The US Government?
So why do I think advocates and opponents to this ‘user fee’ are missing the point?
First up and bare with me here – if we can swallow the bitter pill the FDA continues to lump vaping in with tobacco – as sadly do most countries and governments – then things become interesting. Yes I know vaping isn’t a tobacco product BUT in any debate or even a kidnapping – we have to give and take a little to win the prize.
The prize in this case could and I stress could be a signal the threat to ban flavoured e-liquids and ultimately all forms of vaping in the States might and again I stress might be reaching a compromise or at least seeing a ‘cooling off’ period of sorts.
Certainly at Government level – however various states – towns and cities across the US do seem to have their own ban all things vape agendas. History shows any war is won by smaller battles and ‘losing’ this one could open up a whole new front…
I’ve always said when it comes to the ‘war on vaping’ in America – you need to follow the money. IF and again I stress the word if this user fee does come into play then surely both the FDA and US Government would be reluctant to ban all things vape as they’d lose money? Sure it’s a piddling amount in the grand scheme of things – but by attaching a ‘user fee’ surely that drags vaping into the acceptable mainstream? And with that will come regulations – which can be thrashed out by all parties – rather than a complete ban?
I’m not one to be called an optimist by any means especially when it comes to Government’s – cynical is the proper word lol – however I have a feeling this could be the offer of a peace pipe…a pricey one that’s got vape advocates up in arms definitely…but still far better than Trump announcing vaping and flavoured e-liquids are gonna be banned outright.
Maybe I’m getting soft in my old age…maybe 😉
And yes it can be classed as a tax but by my understanding is the fees will be soaked up by the companies involved – not consumers though of course that’s debatable – and billed if you like based on a sliding scale of actual sales/profits individual vape companies make.
Sure Vaping 360 is right that some smaller companies could well do without yet another business fee or tax – but and trust me I suck at maths – I have a feeling the larger companies/corporations will soak up most – some say 75% – of the $100million.
A quick look at e-cigarette sales in America in 2018 show around $3.6billion total e-cig sales – and growing…so whilst $100million seems a huge price to pay in effect it’s actually quite small in the grand scheme of things.
So for me and whilst I’m pretty much against stealth tax or indeed any bloody tax especially so called ‘sin taxes’ which this feels like – I’m sorry to say I think it’s a small price to pay to keep vaping alive and kicking in America…even if it does feel a bit like blackmail…