Last Updated on February 6, 2016 by
When you consider that state and local tax on tobacco in the US increased from $3.6 billion in 1977 to an astonishing $17.6 billion in 2011, perhaps now is the time to stop smoking dollar bills and consider switching to electronic cigarettes?
Even though tobacco tax income will likely have fallen since 2011 it is still an astonishing tax on the US smoking public. So far the authorities have yet to find a way or a reason to tax electronic cigarettes and indeed the Food and Drug Administration (FDA) has taken two years out studying the industry only to come up with no recommendations to date. We say, stop smoking those dollar bills!
Is the FDA fit for purpose?
The FDA is there to serve the people, regulate new products and it should not be a window to further taxes for the US government and state authorities. Were you are aware that the FDA attempted to ban electronic cigarettes outright only a few years ago – only to lose an embarrassing legal challenge – prompting concerns about its supposed unbiased stance?
Many people are starting to wonder whether the FDA is in fact leaving the regulatory situation in limbo while state authorities and politicians fill the void. At the moment it looks as though by the time the FDA gets around to introducing regulations the vast majority of states across the US will already have tried to shoehorn their own regulations into the mix. But will these local state laws be legal?
Well, we recommend that you ask the former mayor of New York City, the headline grabbing Michael Bloomberg, because his parting shot was to introduce a ban on electronic cigarettes in public places. There was concern at the time that he wanted to go out with a bang, wanted to leave his mark and also create a new tax stream for the New York City authorities. However, in what many believe will be the first of an array of massive lawsuits to hit states across the US it has been revealed that a group by the name of CLASH is taking New York City to court. Why?
Many believe that the refusal of the FDA to grow up, release its data on electronic cigarettes and either confirm or deny its intention to introduce new regulations has prompted this lawsuit. Is this part of the wider plan? Is the idea to cause confusion and mayhem in the electronic cigarette industry? Don’t forget, we also have Imperial Tobacco Group taking legal action against an array of electronic cigarette companies claiming that patents it recently acquired have been infringed. Yes, before the regulations are even in place the electronic cigarette industry is being dragged through the courts, there is infighting already, as the wider public just sit back and wonder what is going on!
Is it really all about the money?
Whether you look at it from a tax angle, or a health angle, money seems to come into every aspect of the US electronic cigarette industry and the fight against politicians, health officials and regulators. Tobacco cigarette smokers might as well be sitting there smoking their dollar bills with the government taking more than its fair share from sale proceeds.
In the background there is the dark shadow of the tobacco cigarette industry and various pharmaceutical groups which are quite rightly looking to protect their own market. These are industries which have been around for many years now, often interlinked through investment, and the new kid on the block is set to smash wide open this monopoly. So, will it be the dollars of the tobacco cigarette industry which go up in smoke or will regulators try to hold back the electronic cigarette market, leaving tobacco cigarette smokers to set light to their diminishing pile of dollar bills?
What does the future hold?
We have seen regulatory hurdles, we have seen political issues, we have seen health concerns but still the electronic cigarette industry continues on its marathon run from a niche market to the mass market. Governments around the world have wheeled out big names to talk down the sector, we have seen rumours and counter rumours circulated as “facts and figures” but still the sector remains undefeated. The fact is that the genie is now out of the bottle and there is no way to put it back in!
Whether or not you are a fan of electronic cigarettes, it is certainly entertaining to watch from the side lines, as tobacco cigarette companies squirm, regulators lose their bottle and governments around the world count their diminishing pile of tobacco dollars. Rewind back 10 years and just one major tobacco cigarette company could have bought-out the entire electronic cigarette sector, closed it down and maintained the status quo for tobacco cigarette companies – and nobody would have been any the wiser. They foolishly dismissed electronic cigarettes as nothing but a fad, nothing to worry about and a market which would die naturally – but how wrong they were. Many also believe that electronic cigarettes are sounding the death knell for tobacco cigarette and this episode could inadvertently reveal the allegedly close relationship between governments, regulators and the tobacco cigarette companies – leaving all parties open to significant criticism.
The longer the information vacuum goes on, with the FDA apparently paralysed with fear, the stronger the position of electronic cigarette users around the world. If the electronic cigarette industry was a marathon runner, there is no doubt it would be a winner!
Tiberius
BIO:
As a nom de plume goes Tiberius is just as good as any. But who is Tiberius, other than an e-cigarette insider with his (or her) finger on the pulse of every major event, and player, in the industry. Spinfuel will, on occasion, bring you the latest from Tiberius, whenever he (or she) has time to sneak away from the paranoid inner-circle of the hottest industry in the world. Thank you Tiberius, wherever you are. – Spinfuel Team
