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Future of America’s Revenue in Jeopardy Over Biden’s Proposed Menthol Ban

2024 Election Campaign Counters Biden’s Menthol Cigarette Restrictions

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The right-leaning advocacy organization, Building Americas Future, is initiating a sizable advertising investment across various swing states and potentially influential congressional districts ahead of the 2024 elections.

This campaign is in response to the presumed menthol cigarette restrictions proposed by the Biden administration. Building Americas Future contends that this policy from the Food and Drug Administration (FDA) has the potential to threaten billions in state revenues at the national level.

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A 2022 analysis by the Tax Foundation estimated that such limitations on menthol cigarette sales could result in a loss of about $1.9 billion for the federal government. For state governments, the loss is projected to be even more severe; they stand to lose an estimated $4.7 billion collectively due to the substantial taxes imposed on cigarettes.

Jeffrey Singer, a senior research associate at the libertarian-leaning Cato Institute, expressed his concern over the potential ban in an October report.

He argued that the restriction has set into motion with probable damaging consequences due to the resultant growth in black market transactions for contraband products such as cigars, cigarettes, and illegal drugs.

Singer further elaborated his argument by pointing out that the prohibition encourages a hidden commercial ecosystem, criminalizing otherwise simple, non-violent exchanges. This shift also provides law enforcement with additional grounds for interactions with individuals participating in these victimless crimes.

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He cautioned that the ban’s impact would be felt more severely by minority communities, where menthol cigarettes are more popular.

The advertising investment spearheaded by Building Americas Future specifically targets states like New Hampshire, North Carolina, and South Carolina as well as several pivotal congressional districts in New Hampshire, Colorado, Pennsylvania, Ohio, and Connecticut. These regions were targeted due to their potential sway in future electoral outcomes.

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Referencing the Tax Foundation’s previous analysis, the financial implications for certain swing states are particularly noticeable. Georgia, Michigan, North Carolina, and Ohio could see their revenues drop by approximately $123 million, $219 million, $165 million, and $227 million, respectively.

On average, every pack of cigarettes sold in the U.S. carries a $1.91 state tax and a $1.01 federal tax.

Additionally, every state continues to benefit from the Master Settlement Agreement – a landmark 1998 agreement between the largest tobacco companies and states that aimed to settle numerous health-related lawsuits and reduce youth smoking. As of 2022, this settlement approximately translates to $0.75 per pack.

In a recent policy shift, the FDA announced standards in April 2022 to ban menthol as a prominent flavor in cigarettes. This decisive move also mandates the prohibition of all other flavorings in cigars, except for tobacco itself. The FDA stated its belief that these measures could mitigate the overall health risks by deterring youth from smoking and aiding current smokers in their quitting efforts.

The FDA expressed their intent to shield future generations from the harms of tobacco addiction and assist current smokers in overcoming their dependencies. The organization conveyed that the data and science support the conclusion that solely permitting the sales of traditional tobacco will save lives and help balance the disproportional impact of menthol cigarettes on targeted minority communities.

A collection of 311 faith leaders sent an open letter to President Biden earlier this week, labeling the finalization of these FDA regulations as a ‘moral obligation.’ They urged the administration to take assertive action in shaping a healthier future for the nation.

Several renowned organizations have echoed these sentiments in favor of the proposed regulations. Strong endorsements have arrived from the NAACP, 100 Black Men of America Inc., the U.S. Conference of Mayors, and the Campaign for Tobacco-Free Kids.

These groups have collectively thrown their support behind the FDA’s stance, reflecting rays of optimism about a society moving towards reduced dependence on tobacco products.

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