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Tax on flu vaccines helps fund national debt

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Politics,Paul Bedard,Washington Secrets,Taxes

The new flu shot has a 40 percent failure rate, according to reports, but that's not stopping Uncle Sam from slapping a tax on it.

Legislation is moving through Congress to impose a 75-cent tax on new seasonal flu vaccines, as the government already does on existing vaccines. The tax money is used to fund the The Vaccine Injury Compensation Trust Fund which covers vaccine-related injury or death claims for covered vaccines.

Without the tax fund, officials said, drug makers wouldn't make new vaccines to replace older ones.

The website Speak With Authority noted that the fund has about $3.5 billion in it, but it's paid out only $2.5 billion in the last 25 years.

Says the site: "Although the taxes raised by the vaccine tax go into a 'Trust Fund,' this trust fund, like most government trust funds, is on paper only. According to the most recent report on the fund, November 2012, the balance in the fund is nearly $3.5 billion. Since the program's inception in 1988, the fund has paid out only $2.5 billion in 25 years for cases involving all vaccines, not just the flu vaccine. The balance in the fund could conceivably last another 25 years with no further tax revenue. The $3.5 billion balance, of course, is 'invested' in 'US Treasury Securities.' In other words, financing a portion of the $16.5 trillion national debt."