The REAL reason Obama let FDA regulate tobacco, page 1
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reply posted on 26-6-2009 @ 02:40 PM by MysterE
reply to post by Maxmars



I am certianly not saying that they will not try to take away other personal liberties in the future, in fact I believe they will. But currently, they have given the FDA power to regulate tobacco, because it is at the top of the list for health care expenditures.

-E-



reply posted on 26-6-2009 @ 02:54 PM by fraterormus
Actually, the cost of Healthcare that Tobacco cause to American Tax Payers is a total ruse. I'm not saying that Tobacco doesn't generate a financial burden, but it is chump change compared to what is really going on.

What the fact of the matter is, in regards to this legislation that Obama signed into law, that this is Economic Protectionism hidden under the guise of Health interests.

What this law effectively does is allows the FDA to discriminate Tobacco products not on the merits of their health risk, but on the merits of their point of origin, without violating Trade Treaties.

The fastest growing section of the Tobacco Sales in the United States is Kreteks (Clove Cigarettes). In the past decade Kreteks have gone from .9% to 9% of all Tobacco Sales in the US. Current trends show that this growth-rate is only going to accelerate. Kreteks have been shown by the CDC to have no greater health risk than any other Tobacco product (and actually a 15 year long study by the CDC on Indonesians who smoked in excess of 1 pack of Kreteks a day showed no instances of elevated health risk over not smoking!) As all Kreteks are imported from Indonesia and there are currently no US Manufacturers that produce Kreteks, this is a significant financial threat to the US Tobacco Industry. And this is just the largest segment that poses a threat. All of the Tobacco products that are flavored come from North Africa, the Near East, Russia or SE Asia, not from the US. These are the products that have been explicitly banned under this new legislation. Without invoking a Trade Embargo against these Countries, which would cause an International Incident and cause a Trade Embargo of US Tobacco Exports in retaliation, this law was contrived to have the same results without affecting our ability to Export Tobacco products.

Thus, only US Tobacco products can now be bought and sold in the US...although US Tobacco products can still be Exported to other nations.

Also, States annually receive a portion of profits from the US Tobacco Industry as terms of a Class Action Lawsuit. Foreign Tobacco Companies that have their products imported into the US do not have to pay the States a part of their profits. Thus, it is in the cash-strapped States better interests to eliminate all foreign competition as that will make their profit-sharing in the US Tobacco Industry's sales go up!

Remember the old Axiom of "If you want to find the real reason behind something, just follow the money!"


reply posted on 26-6-2009 @ 03:04 PM by MysterE
reply to post by fraterormus



I think your reasoning is good, other then the fact that the govt. isn't in the business of selling tobacco. Now, state govt's do benefit as you stated by the additional tax, but I don't think this legislation was specifically aimed at that. The timing is too coincidental with the health care legislation on the table. You said "follow the money", and as I said earlier, the govt. ins't directly in the tobacco business, but they soon will be in the health care business.

-E-



reply posted on 26-6-2009 @ 03:21 PM by grapesofraft
reply to post by MysterE



1. The real reason he let the FDA control tobacco is because he is a Liberal and Liberals always think they know the best choice for everyone.

2. It might be 8 percent of healtcare costs, but how much is a 20 yr war on Illegal Tobacco Dealers going to cost the country?


reply posted on 26-6-2009 @ 04:29 PM by fraterormus
Originally posted by MysterEI think your reasoning is good, other then the fact that the govt. isn't in the business of selling tobacco. Now, state govt's do benefit as you stated by the additional tax, but I don't think this legislation was specifically aimed at that. The timing is too coincidental with the health care legislation on the table. You said "follow the money", and as I said earlier, the govt. ins't directly in the tobacco business, but they soon will be in the health care business.


On the contrary. Tobacco is the 2nd largest revenue source for the US Treasury, exceeded only by Excise Taxes on Gasoline. The Federal government receives revenue from Tobacco not only from Federal Taxes on Sales, but also Federal Excise Taxes on Imports, Federal Taxes on US Tobacco Industry Revenue, and Federal Taxes on US Tobacco Industry Employee Wages.

The CDC calculates the estimate cost of smoking in the US to come out to $96 Billion/yr in Health Care (which is not yet a liability to the Federal Government, but will be if we adopt Socialized Healthcare) and $97 billion/yr in lost productivity (read potential lost Taxes on Wages due to decreased life-span). Only 22 billion packs of cigarettes are sold domestically in the US, so this comes out to be $3.45/pack in potential Health Care cost and $3.73/pack in potential lost productivity, which we tax $2.92/pack directly, coming out to a seeming loss of a potential $4.16/pack to the Federal Government (again, this is a hypothetical loss assuming fully Socialized Healthcare). Yet when you include all the other Taxable Revenue sources attributed to the growing, manufacturing, and distribution of that pack of cigarettes, the US Treasury still receives a Net Gain of $0.32 per pack of cigarettes sold in the United States (or $7.04 billion dollars annually) under this estimate. This also does not include the consideration of Tax Revenue from raw Tobacco or Exports.

On top of this, the US Tobacco companies pay the States $24.6 billion/yr in Settlements (having paid $203.5 billion in the past 10 year since the DMA).

Still, this is chump change.

Now, let's get to the big bucks of where the US profits from this new Tobacco Law...

We export 191 Metric Tons of raw Tobacco a year. We import 241 Metric Tons of raw Tobacco a year, giving us a Net Import of 50 Metric Tons.

We export 170 billion pounds of cigarettes a year but import 200 billion pounds of cigarettes a year, giving us a Net Import of 30 billion lbs.

By effectively banning Imports (by using the FDA instead of Trade Embargo) we have turned this into a Net Import of -191 Metric Tons of raw Tobacco and -170 billion pounds of cigarettes a year, all of which means higher Capital Gains for the entire Tobacco Industry in the United States. This means the Tobacco Industry in the United States will now have to produce 432 Metric Tons of raw Tobacco a year, and and ramp up to producing 370 billion pounds of cigarettes a year to make up for this difference in Net Import. This effectively more than doubling the US Treasury's Revenue, making Tobacco now the number one revenue source for the US Treasury. It also means that a huge amount of US jobs are created to help assist in this more than 100%+ increase in US Tobacco production.

Name me any other industry that can turn a 100%+ increase in Revenue and Taxes!

The US Car Industry and Wall Street combined don't equal the amount of Revenue that the US Tobacco Industry represents to the US Treasury!

You can consider this Legislation to be the US Tobacco Industry's Bail Out, the only difference is that it is making both the US Tobacco Industry and the US Treasury fat off the deal, at the expense of foreign Tobacco Industries and US Consumers.

Of course, this will only last until the WTO rules on this, as Indonesian Kretek Manufacturers have already asked for Economic & Trade Sanctions against the U.S. Still, the US Treasury and US Tobacco will profit greatly off of this scheme for a couple of years until then, and hopefully by then the US Economy will have recovered enough to handle things going back to the way they were prior to this law.

[edit on 26-6-2009 by fraterormus]


reply posted on 26-6-2009 @ 04:43 PM by xoxo stacie
Originally posted by MysterE
reply to
post by fraterormus



I think your reasoning is good, other then the fact that the govt. isn't in the business of selling tobacco. Now, state govt's do benefit as you stated by the additional tax, but I don't think this legislation was specifically aimed at that. The timing is too coincidental with the health care legislation on the table. You said "follow the money", and as I said earlier, the govt. ins't directly in the tobacco business, but they soon will be in the health care business.

-E-


Read the bill they are now

Not only can they regulate what is going on in the industry; they can also say who sells what and to who AND for how much and what is TAXED.. when ever THEY see fit.
I know 1200 pages of a health bills and several thousand additional pages of bill's being attached to the first health bill ALREADY PASSED is a bit much. BUT if you want to know what is going on and carry on a logical form of conversation about it that doesn't involve allot of bashing or personal "feelings" get to it and start reading.
IF EVER you "hear or see" that a bill has an extremely high number of pages; you can be guaranteed that there is something else stuffed in between several lines in it. There are lobbyist's for a reason people. They get what they want by paying dearly for it. If you see a HUGE bill they have got what they "need and want" in it.
The only way you can find the tid-bit's is to actually get down and READ THE BILLS.


reply posted on 26-6-2009 @ 08:09 PM by LordBaskettIV
reply to post by MysterE



The state if Michigan alone pulls in 1 BILLION in tax from tobacco products.6 oz of tobacco cost 9.96$ 3 months ago(that was with state taxes add of course). Now with new Federal taxes, that same 6oz bag now cost 28.96$!!! That means the government will pull in well over 6 BILLION in tax, from one state alone.

They ARE in it for the money!

I would like to ask you, do you know just how much of those health risks are contributed to by smog and pollution? Smoking rates have fallen massively yet cancer and lung problems continue to rise...

It really poses no more of a threat than drinking or even prostate cancer.

[edit on 26-6-2009 by LordBaskettIV]


reply posted on 27-6-2009 @ 01:08 AM by MysterE
reply to post by LordBaskettIV



I agree with your post LordBasket, but you are refering to the state level. Healthcare will be a federal issue. And as IKnowNothing put it 1 billion is "like throwing a penny in a fountain." The govt. was happy to get their share of the tobacco profits until it undermines one of their main goals. Now, they need the effects of tobacco to minimalized. Now this may not be the elimination of tobacco, but it will almost certianly result in a less deadly cigarette now that the FDA has the authority. It is necessary for socialized health care to work in the US. It will not stop at tobacco, the govt will try to minimalize other freedoms we enjoy as long as it costs them more.

-E-
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