Once a year millions of happy, and not so happy, couples use Valentine’s Day as an excuse to be romantically cliché and thoughtful to loved ones. A part of this annual custom is to buy little chocolates and candies to exchange, in addition to the obligatory bouquet of flowers of course. However, with each passing year the price of these delectable treats grows, and like the tip of Cupid’s arrow, rips a hole right through consumer’s wallets.

The common consensus, stores hike up the prices to meet demand. However this consensus for the most part is wrong, as the increasing price for candy is actually a result of Uncle Sam’s love affair with crony capitalism. For years protectionist policies under the U.S. Sugar Program have driven up the cost of sugar in an effort to protect a favored few sugar producers from competition.

Unfortunately, the U.S. Sugar Program is a relic of a past age that has somehow managed to stay alive in an ever globalizing and dynamic economy. This New Deal Dinosaur was originally put in place to quell a farmer’s revolt as the economy crashed in 1929. As time progressed, sugar producers got multiple protections like price supports, import quotas, incredibly generous subsidies, and a ridiculous program known as the “Feedstock Flexibility Program.” The Feedstock program forces the federal government to buy back unsold sugar from producers at a loss, adding insult to injury. 

Currently the average couple this Valentine’s Day is paying more for sugary goodness than they should be. As a result of the U.S. Sugar Program, there is a large differential between the wholesale costs of domestic sugar when compared to that of the world.  In fact, American sugar costs more than twice that of the world price of sugar. For instance in 2015 the price of sugar hovered around 33 cents per pound, while the world price was a mere 15 cents per pound. 

This kind of self-inflicted protectionism only does damage to consumers and the American companies that the make the sweets we love to consume. The prices have even forced a breakup between the U.S. and some in the confection industry. 

In fact over the last decade, 22% of candy making jobs have left the country in search of cheaper sugar. One of the more well-known American companies, LifeSavers, left the United States and moved to Canada to take advantage of cheaper sugar prices, taking with it over 600 jobs. 

Leave it to Uncle Sam to show just how much the federal government loves American taxpayers and consumers by the exorbitant amount of money they waste for our “benefit”, it’s really romantic. The reason being, according to a CBO report, that in the next ten years, the program will cost the taxpayer at least $115 million.  If the government were to dump this protectionist program, the average household would save at least $30 dollars per year.  More money to buy cheaper candy, a win-win by all accounts.

Not all relationships last forever, this is a truth we all know, so this relationship between consumers and government inflated sugar prices needs to end. It was good in the beginning, but times have changed and we need to move forward. It may be hard at first, but it will be better for both of us. It isn’t me, it’s you.    

Photo credit: Barb Steinacker

Americans for Tax Reform today expressed support for H.R. 2017, “The Common Sense Nutrition Disclosure Act”, being offered by Rep. McMorris Rodgers (R-Wash.). H.R. 2017 would stand in stark contrast to the White House menu-labeling law, the language of which is overly broad, and increases the regulatory burden and compliance costs through enhanced bureaucratic red tape. 

The Common Sense Nutrition Disclosure Act would amend the Federal Food, Drug, and Cosmetic Act to revise the nutritional information that restaurants and retail food establishments must disclose. Doing so would protect restaurants and related businesses of all sizes from the ever-growing regulatory burden created by the President and the Food and Drug Administration (FDA). 

In 2015 the FDA released expansive new regulations in a one-size-fits all regulatory approach that will have a disproportionate impact on smaller, and medium sized businesses. Under the new regulations, the FDA created a broad and expansive new definition of “menu” that requires any food industry related materials that contain a photo of an item and a phone number to be considered a menu.

The compliance costs inherent in this expanded definition will be too much for smaller and medium size restaurants and related businesses to absorb. These increased costs have led some larger restaurants and chains to advocate in support of the FDA rules, as the increased compliance burden will likely offer a competitive advantage. 

Americans for Tax Reform believes Congress should work towards increased and fair competition in the market place, and urges lawmakers to support H.R. 2017. Doing so will ensure that the FDA and Obama Administration’s costly policies do not create a crony capitalistic regime that disadvantages small, medium, and growing businesses in the industry.    

Photo credit: Al Hikes AZ

The U.S. Senate has overwhelmingly voted to permanently ban Internet Access Taxes. The prohibition was included in a larger customs bill that passed with a vote of 75-20. Now, the bill and the internet access tax ban will be sent to President Obama for his signature.

The Internet Tax Freedom Forever Act ensures that Americans’ internet access will never be taxed by state or local governments. Since 1998 the ban has been reauthorized over half-a-dozen times.

By voting today to permanently ban internet access taxes, Congress has ensured that Americans all around the country can have access to broadband internet without a fear of burdensome prices.

Last week, U.S. Trade Representative Michael Froman signed the Trans-Pacific Partnership trade agreement, a largely symbolic act that is just one step on the long road toward ultimate approval of the agreement by Congress. While free trade is ultimately a good, there are several alarming provisions in the agreement that must be fixed as Congress continues considering the TPP.

For one, the weak biopharmaceutical intellectual property protections could create a global economy where property rights do not receive the sufficient protection. In its current form, the agreement grants biopharmaceuticals just five years of exclusivity, far below the 12 years that the U.S. grants.

This 12 year figure is not one plucked out of thin air, but was legislated by Congress following careful consideration of the extensive development costs associated with medicines.

It costs researchers an average of $2.6 billion and over ten years to take a new medicine through the pre-approval period.  And the costs don’t end there. The countless regulations and mandates in the post-approval periods cost over $20 billion every year.

Despite these steep costs, strong IP protections allow the U.S to remain a leader in innovative new medicines. In 2014 alone, pharmaceutical firms spent over $51 billion on research, while over 50 new drugs entered the market. But in order to maintain this rate of innovation, companies are faced with a delicate balance to ensure they are able to finance new research and development.

Ensuring IP rights are promoted and protected should not be solely a U.S. interest, because it will benefit all TPP partners.  

IP allows local, innovators to flourish by putting them on equal footing with foreign industries and ensuring they receive just reward for any creation. With more innovation & competition, everyone gains.

Indeed, free trade is a positive force as it eliminating barriers to global commerce through removing discriminatory tariffs, trade quotas, and regulations.This means less money taken by foreign governments out of the pockets of American workers and business owners. And it means more competition and access to more products at lower prices for consumers across the country.

But regrettably, there are several provisions in the TPP that go in the opposite direction – they create new burdensome regulations that restrict innovation, competition, and the free market by imposing new costs on business.

Another problem with the pacific trade deal is a provision excluding tobacco producers from access to investor-state dispute settlement (ISDS), a procedure that allows investors to seek arbitration and redress in a neutral court if a country is not meeting internationally agreed-upon and binding trade rules.

Opposition to this “carve-out,” as it is known, should not correspond to approval for smoking or tobacco.  This provision is needlessly discriminatory and should be removed because it creates the precedent for adding new regulations in an agreement that is supposed to be about going in the opposite direction.

Similarly, a provision removing the financial services from restrictions on forced data localization could hit U.S. interest hard. At worse, the provision will drastically reduce the ability of the industry to safeguard vital, sensitive data, while imposing unnecessary costs on American business.

Finally, while the agreement contains weak protections for IP, the aggressive labor regulations could very well increase the costs of trade, and hurt U.S. jobs and businesses.

Although the TPP is not the perfect free trade agreement, the fundamentals of the deal are good. It contains as many as 18,000 tax cuts on American exports, and over the next decade, will cut $15 billion in tariffs, which will significantly reduce government interference in international commerce.

This will lead to striking benefits for American families and businesses. In fact, the Peterson Institute for International Economics estimates the agreement could lead to as much as $131 billion in annual increased income through 2030, and increase annual exports by $357 billion.

The bottom line is that this agreement is too good an opportunity to pass up. But before this agreement is passed by Congress, it must be fixed.