Recent TaxWatch Op-Eds

Published on Wednesday, January 18, 2017

Keeping Cigars in the Cigar City

By Dominic M. Calabro, President & CEO

Politicians talk repeatedly about doing things to help create jobs. But, sometimes, doing nothing is the best option. We hope that newly-elected lawmakers understand that less government intrusion is often the key to keeping the American Dream alive.

A great example is the 2009 “Federal Food, Drug and Cosmetic Act.” This innocuously named effort actually increased federal regulation in ways that even many of its supporters now regret.

The act gave the Food and Drug Administration the right to regulate all tobacco products, not just cigarettes. But bureaucracies tend to expand whenever they can and the agency soon extended its reach to premium cigars — a move that even the most liberal members of Congress said they never intended.

The result is a possible loss of jobs, the death of family-owned businesses and an unnecessary impediment to the American Dream.

A great example is the J.C. Newman’s Cigar Co. It is a classic “only in America” success story. Founded in 1895 in Ohio by an immigrant from Hungary, it is the nation’s oldest manufacturer of premium cigars.

In the 1950s, the business moved to Tampa, also known as Cigar City. What autos are to Detroit and movies are to Hollywood, cigars are the signature item in Tampa. The business flourished in this natural new home.

Cigars made by the 121-year-old family-run business are not marketed toward youth, nor are they used by younger consumers.

But the FDA, empowered to expand its reach without limit, has recently ruled that all cigar manufacturers must pay exorbitant “user fees,” undergo costly scientific tests that could run into the millions of dollars, fulfill new loads of paperwork and are now essentially prohibited from introducing new sizes, brands and blends. Samples provided for charity auctions or soldiers overseas are no longer allowed. And in a cruelly concurrent move, the federal government recently ruled that Cuban cigars will not only be allowed for sale in the United States, but they won’t have to meet the new requirements for American-made cigars.

The overall result is not an increase in consumer safety, but a potential death knell for companies like J.C. Newman’s.

The company has more than 125 employees in the Tampa Bay area, hardworking families with mortgages to pay and children to feed. Strangling their livelihood with no increase in consumer safety is ludicrous.

Thankfully, led by Bill Nelson and Marco Rubio in the U.S. Senate and Bill Posey and Kathy Castor in the U.S. House, there has been bipartisan support from Florida’s legislative delegation to eliminate the job-killing provisions for premium cigar manufacturers. The conservative House Freedom Caucus has also presented President-elect Donald Trump with more than 200 regulations that could be immediately eliminated to help working Americans, including the job-killing provisions on premium cigars.

We hope the new administration and the FDA find the proper balance and remove this requirement that benefits nobody. And we hope that this classic example of unnecessary regulations strangling businesses becomes a warning against well-meaning mandates that too often spiral out of control.

Dominic M. Calabro is the president and CEO of Florida TaxWatch. This op-ed was featured on Florida Politics and Sunshine State News.

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