The Republican National Convention wrapped up last night. I was quite disappointed that the deficit or debt wasn’t brought up during the convention. The deficit for this year has already topped $4 trillion while the debt is approaching $27 trillion. These are astronomical numbers. Yes, the relief package was a major contributor to this year’s deficit and debt, but the deficit before the pandemic was projected to eclipse $1 trillion. Interest on the debt is expected to be $500 billion. While it’s not easy to talk about these tough problems, we have to have these discussions. We can’t keep on ignoring this systematic overspending on the taxpayer’s dime. September is next week, and Congress will only have 16 days to finish the spending bills before they leave in early October to work on their re-election campaigns. Obviously, they won’t have time to finish the spending bills, so once again another continuing resolution and more drama will follow for November and December. Stay tuned as we continue to hold Congress and the President accountable for this reckless bipartisan spending frenzy.
Summer Reading – FDA Reform
Well, the final Summer Reading is here. We hope that members of Congress have been reading very closely because when they return they have A LOT of work to do. While government officials have repeatedly assured the American people that COVID-19 treatment and drug innovations are just over the horizon, they remain stymied by an onerous Food and Drug Administration (FDA) approval process that prioritizes risk aversion over saving lives. By embracing new, game-changing technologies, the FDA can approve novel tools to fight COVID-19 and allow lawmakers a reprieve from awkward Zoom calls.
The FDA is a sprawling regulatory agency that promulgates rules affecting virtually every consumer product under the sun (including sun block). The FDA is one of America’s largest and most consequential agencies, regulating roughly three-quarters of the food supply and virtually all prescribed drug products and medical devices. American consumers trust the agency with their lives because most products that are purchased and consumed each day must be approved by the FDA. The FDA is forced to make daily decisions with incredibly significant consequences; any mistake with either overregulating or underregulating products under the FDA's purview can cost millions of lives. Unfortunately, the agency has embraced overregulation and advanced strict rules that add significant time and costs to product approval. For pharmaceuticals, the average time from the beginning of trials to final FDA approval spans more than 10 years and the process costs producers more than $2 billion per medication. The FDA has specified strict standards for the development of a coronavirus vaccine, stating that any product must be at least 50 percent effective. These standards ignore the fact that in a good year, real life vaccines for deadly ailments such as the seasonal flu are only 45 percent effective. Despite this low-sounding efficacy, public health experts still recognize the myriad public health benefits of the flu shot. Cleveland Clinic infectious diseases expert Dr. Alan Taege notes, “The more people you protect, the healthier the population is, and fewer people are going to have influenza to spread it to the rest of the population.” And, approval of a product doesn’t preclude the possibility of a better product coming along down the line.
The FDA’s risk-aversion certainly isn’t limited to coronavirus cures or the drug approval process. Despite approving the IQOS tobacco heating system as a “modified risk tobacco product,” the agency has been notoriously reticent in allowing the sale of reduced-risk products that offer smokers the sensation of smoking a cigarette at a small fraction of the associated public health risks. The agency bizarrely classifies products such as vapes as “tobacco products” despite vapes containing no tobacco and being more than 95 percent safer than combustible cigarettes. This classification has resulted in e-cigarette manufacturers having to submit to the onerous Premarket Tobacco Product Application (PMTA) process, which can cost small businesses more than $400,000 per product in regulatory compliance costs. While the FDA has suspended PMTA requirements until September 9, the agency has yet to issue firm guidance as to the scope and severity of enforcement actions after that date. This is no small matter, since millions of smokers’ lives are at stake.
Unless the FDA adopts a more permissive regulatory approach, countless Americans will continue to suffer from preventable maladies. Public health issues such as the coronavirus and tobacco consumption may seemingly have little in common. But in both cases, billions of dollars are being spent by the private sector and products are being tested and developed to solve these issues and give consumers better, safer options. By streamlining rules and relaxing their onerous approval criteria, the FDA can open the door to more cures than ever before.
California Schemin’
Ok, stop me if you’ve heard this one before: California wants to raise taxes. I know…shocking, right? Introduced by California Assembly member Miguel Santiago (D-Los Angeles), Assembly Bill 1253 would not only increase the tax rate on income over $1 million, but it would do so retroactively for income earned from January 1, 2020 onward. The bill would impose a 1 percent increase on annual, adjusted gross income more than $1 million, a 3 percent increase on income more than $2 million, and a 3.5 percent increase on income more than $5 million. Overall, the tax hike would increase the state’s tax rate on income above $1 million from 13.3 to 14.3 percent and levy a staggering 16.8 percent rate on those in the $5 million plus income bracket.
California already has the highest personal income tax rates in the country and state residents hardly get a break post-paycheck. Those in top income brackets have not been isolated from the economic damage the pandemic has caused and have been pushed to put off investments that would create new employment opportunities and increase options for consumers. But the legislation would further stymie entrepreneurship, forcing those who lost money in the economic crash to pay retroactive taxes from January.
After the “millionaire’s tax” was raised to the current level of 13.3 percent in 2012, thousands of taxpayers fled the state and the ones left behind reported lower incomes to California bureaucrats. This migration and complicated revenue-shifting destroys opportunities for ordinary Californians, who stand to benefit from the investments made by their wealthier neighbors. California’s loss seems to be the gain of other states, including Texas. Companies such as Apple and Google are establishing offices and factories in Austin, Texas and reaping the benefits of low tax rates. The companies have brought thousands of jobs with them, a point that seems to be lost on some California lawmakers intent on upping the tax rate in their own state. The more California increases financial pressure on those in the highest income brackets, the more they run the risk of losing jobs and tax revenue from individuals and businesses choosing to relocate out of state.
AB 1253 is currently in committee, and groups including the California Taxpayers Association and the California Chamber of Commerce have voiced their concern and opposition to the bill. Lawmakers still have time to make the right decision and stop AB 1253 before it forces residents and businesses to flee the state for lower taxes and greener pastures.
Blogs:
Monday: Postal reform needs to happen before the election
Tuesday: Taiwan-U.S. Free Trade Agreement Would Set Stage for Post-Coronavirus Economy
Wednesday: California’s proposed income tax hike is anything but golden
Friday: Summer Reading: FDA Reform and the Race for a Vaccine
Media:
August 21, 2020: The Center Square ran TPA’s op-ed, “Google Fiber, king of broken promises, eyes broadband deal in West Des Moines.”
August 21, 2020: TPA Senior Fellow Ross Marchand appeared on KNRS 105.9 radio (Salt Lake City, Utah) to talk about the U.S. Postal Service.
August 23, 2020: InForum ran TPA’s op-ed, “ND should steer clear of dangerous 'road trains.’”
August 24, 2020: I appeared on WCBM 680 AM (Baltimore, Md.) to talk about the U.S. Postal Service.
August 24, 2020: Inside Sources ran TPA’s op-ed, “Bogus Vaping Study Puts Millions of Lives at Risk.”
August 24, 2020: WBFF (Fox, Baltimore) interviewed me about the 2020 census.
August 24, 2020: Ross appeared on “The Tyler Cralle Show” (podcast) to talk about the U.S. Postal Service.
August 26, 2020: The Economic Standard ran TPA’s op-ed, “Critics hope CARES Act broadband funds go toward the truly unserved.”
August 27, 2020: I appeared on KRC 550AM radio (Cincinnati, Ohio) to talk about the U.S. Postal Service and healthcare price controls.
August 27, 2020: I appeared on WBOB radio (600 AM and 101 FM; Jacksonville, Fla.) to talk about the economy and tax cuts.
August 27, 2020: WBFF (Fox, Baltimore) interviewed me about the Republican National Convention.
August 27, 2020: Townhall ran TPA’s op-ed, “Trump’s Price-fixing Scheme Is the Wrong Prescription for Patients.”
August 27, 2020: The Washington Times ran TPA’s op-ed, “FDA must not overregulate COVID-19 vaccine approval, millions of lives depend on it.”
August 28, 2020: Ross appeared on “WSBA Morning News with Gary Sutton” (910 AM and 93.9 FM; York, Penn.) to talk about the U.S. Postal Service.
Have a great weekend, stay safe, and as always, thanks for your continued support.
Best,
David Williams
President
Taxpayers Protection Alliance
1401 K Street, NW
Suite 502
Washington, D.C. xxxxxx
www.protectingtaxpayers.org
