Alex Hendrie

Senate Coronavirus Bill Contains Important Tax Cuts for Individuals and Businesses

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Posted by Alex Hendrie on Wednesday, March 25th, 2020, 8:12 PM PERMALINK

The Senate Coronavirus emergency relief legislation, known as the “Coronavirus Aid, Relief, and Economic Security (CARES) Act”, contains numerous tax cuts that will offer individuals and businesses much needed liquidity during the pandemic.

According to the Joint Committee on Taxation, the legislation reduces taxes for businesses by $275 billion over the budget window. In all, the bill cut taxes by almost $600 billion.

These broad-based tax cuts will give businesses the flexibility to meet expenses including payroll during this unprecedented economic and health crisis. Not only will this ensure individuals continue getting paid, but the tax cuts will also give Americans flexibility over retirement accounts and charitable contributions.

Specifically, the bill:

  • Allows businesses to carryback losses incurred in 2018, 2019, and 2020 for five years.
  • Broadens the ability of businesses to deduct net interest expenses from 30 percent of EBITDA (earnings before interest, tax, depreciation, and amortization) to 50 percent of EBITDA for 2019 and 2020. 
  • Fixes the “retail glitch” so that qualified improvement property can be immediately deducted instead of depreciated over 39.5 years.
  • Allows companies to delay paying 50 percent of employer payroll taxes until 2021 and 2022.
  • Creates a 50 percent employer payroll tax credit from March 13 to the end of 2020. Credit is capped at $10,000 of wages per employee per quarter.
  • Creates an above the line charitable deduction of $300 for 2020.
  • Waives required minimum distribution rules for 2020.
  • Allows penalty free distribution of $100,000 from retirement account for coronavirus distributions.

Photo Credit: ComputerGuy - Flickr


Democrats are Politicizing the Coronavirus to Push Liberal Priorities

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Posted by Alex Hendrie on Monday, March 23rd, 2020, 7:00 PM PERMALINK

House Speaker Nancy Pelosi (D-Calif.) and Democrats in the House and Senate are politicizing the Coronavirus pandemic in an attempt to pass a wishlist of far-left priorities.

Senate Democrats are refusing to begin consideration of bipartisan phase three Coronavirus emergency legislation and have blocked the bill twice since Sunday evening. This obstruction comes even as Senate Minority Leader Chuck Schumer (D-NY) called for the Senate to act “immediately” as recently as last week.

The proposal, known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act, would provide much-needed liquidity for businesses and individuals. It would deliver relief to Americans that are struggling to pay their bills and ensure that medical providers have the resources they need.

Contrary to the Democrat talking points, the bill does not include a slush fund for corporations. Instead, it provides loans for businesses so they can continue paying their employees and meet other expenses. This is urgently needed and will help American families keep the lights on. In addition, taxpayers are protected. Since they are loans, they come with conditions and must be repaid.

Democrats continue to mislead on this provision and are claiming the bill helps corporations over middle class families. This is not true - the proposal also grants liquidity funding in the form of direct payments to small businesses and individuals.

Throughout the process, Democrats demanded the inclusion of several priorities such as increased funding for hospitals and medical services, increased funding for state and local governments, and increased funding for unemployment insurance. 

After negotiations, the legislation was amended to meet these requests. Billions and in some cases hundreds of billions in funding exists for these priorities. For instance, the legislation contains $250 billion in funding for unemployment benefits which will ensure an additional $600 in unemployment payments for recipients for three months.

The legislation also contains $75 billion in funding for hospitals, and funding for state and local governments in the form of loans through the supposed slush fund that Democrats have lambasted.

Over in the House, Speaker Pelosi has released a 1,200 page bill that goes even further. One of Pelosi’s deputies, House Majority Whip Jim Clyburn (D-SC), said last week that the emergency is “a tremendous opportunity to restructure things to fit our vision.”

Democrats are now pushing countless proposals that are unrelated to the Coronavirus pandemic including mandating airline carbon emissions, prohibiting businesses that take loans from petitioning the federal government, wind and solar tax credits, and permitting federal employees to conduct union work on the taxpayers’ dime.

These proposals do not represent a good faith effort to deliver assistance to American families and businesses during the pandemic. Instead, it is an unabashed attempt to exploit the crisis to enact long-held liberal priorities.

Photo Credit: Victoria Pickering


Coalition Supports Senator Cruz’s Pandemic Healthcare Access Act

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Posted by Alex Hendrie on Monday, March 23rd, 2020, 12:30 PM PERMALINK

Update: Congressman Ted Budd has introduced the Pandemic Healthcare Access Act in the House of Representatives. 

ATR President Grover Norquist led a letter of 30 organizations in support of Senator Cruz’s Pandemic Healthcare Access Act. This legislation allows all healthcare plans to use Health Savings Accounts during the duration of the Coronavirus pandemic.

[Click here to read the full letter]

Currently, there is a mandate that any American wanting to open or contribute to an HSA must be on a high-deductible health plan.

Senator Cruz’s legislation would pause this mandate in order to help mitigate the pandemic by Americans in Medicare, Affordable Care Act health plans, TRICARE, the VA, Indian Health Service and any employer plan to use HSAs. It will also help individuals pay for their deductible or any increased health care costs, allow HSA funds to pay for direct primary care, and allow telemedicine below the deductible.

As lawmakers continue working through proposals to address the pandemic, they should support and pass the Pandemic Healthcare Access Act.

You can read the full letter here or below: 

Dear Leader McConnell: 

As you continue working to address the Coronavirus pandemic, we urge policymakers to temporarily de-couple Health Savings Accounts (HSAs) from high-deductible health plans (HDHPs) as has been proposed by Senator Cruz and Congressman Ted Budd in the Pandemic Healthcare Access Act. 

This proposal will help mitigate the public health crisis by allowing Americans in Medicare, Affordable Care Act health plans, TRICARE, the VA, Indian Health Service and any employer plan to use HSAs. It will also help individuals pay for their deductible or any increased health care costs, allow HSA funds to pay for direct primary care, and allow telemedicine below the deductible. 

HSAs are currently used by almost 30 million American families and individuals. They empower healthcare mobility and choice, reduce taxes, and are a powerful tool for savings. 

However, there is currently a mandate that any American wanting to open or contribute to an HSA must be on a high-deductible health plan. This restricts how funds can be spent and which plans qualify for an HSA. 

Ending this mandate would give millions of individuals and families access to a portable, tax-advantaged savings vehicle, that can be used on healthcare expenses. This will especially benefit high-risk populations like seniors that consume greater levels of care. 

Suspending the HSA HDHP mandate will help strengthen public health and ensure that Americans have access to the care they need at a time when they are required to self-quarantine to prevent mass infection.  As you continue working to mitigate this pandemic, we hope you will support this request. 

Sincerely, 

Grover Norquist 
President, Americans for Tax Reform  

Jim Martin 
Founder/Chairman, 60 Plus Association 

Saulius “Saul” Anuzis 
President, 60 Plus Association

Bob Carlstrom  
President, AMAC Action  

Phil Kerpen  
President, American Commitment  

Brent Wm. Gardner  
Chief Government Affairs Officer, Americans for Prosperity 

Robert Alt
President, The Buckeye Institute 

Norm Singleton  
President, Campaign for Liberty  

Matthew Kandrach 
President, Consumer Action for a Strong Economy  

Ryan Ellis 
President, Center for a Free Economy 

Andrew F. Quinlan 
President, Center for Freedom and Prosperity 

Jeffrey Mazzella  
President, Center for Individual Freedom 

David McIntosh 
President, Club for Growth 

Katie McAuliffe 
Executive Director, Digital Liberty 

Timothy Head
Executive Director, Faith & Freedom Coalition 

Adam Brandon  
President, FreedomWorks  

George Landrith 
President, Frontiers of Freedom 

Naomi Lopez 
Director of Healthcare Policy, Goldwater Institute 

John Goodman 
President and CEO, Goodman Institute for Public Policy Research 

Jessica Anderson 
Vice President, Heritage Action for America 

Dan Perrin 
Executive Director, HSA Coalition 

Beverly Gossage 
President, HSA Benefits Consulting 

Andrew Langer 
President, Institute for Liberty 

Heather Higgins 
CEO, Independent Women’s Voice 

Seton Motley 
President, Less Government 

Pete Sepp 
President, National Taxpayers Union 

CL Gray, MD 
President, Physicians for Reform 

Jonathan Bydlak 
Director of the Fiscal/Budget Policy Project, R Street Institute 

David Williams 
President, Taxpayer Protection Alliance 

Jenny Beth Martin 
Honorary Chairman, Tea Party Patriots Action 

Amy Kremer 
Chairman, Women for America First 

Cc: 

President Donald Trump 
HHS Secretary Alex Azar 
Treasury Secretary Steven Mnuchin 
National Economic Council Director Larry Kudlow 
Senate Finance Committee Chairman Chuck Grassley 
House Republican Leader Kevin McCarthy 
House Ways and Means Republican Leader Kevin Brady 
All GOP Members of the House and Senate 

Photo Credit: Gage Skidmore


Despite Tax Deadline Delay, Taxpayers Should File Early to Receive Refunds

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Posted by Alex Hendrie on Saturday, March 21st, 2020, 1:15 PM PERMALINK

In response to the Coronavirus pandemic, the Trump administration recently announced that they will delay Tax Day for three months – moving the deadline to file taxes from April 15 to July 15. 

This is good news. As noted by Treasury Secretary Steven Mnuchin, this will give businesses and individuals more time to file without incurring penalties.

At a time that many Americans are experiencing financial difficulties from a lost job or fewer work hours, this decision will help ensure much-needed liquidity to meet everyday expenses.

However, this should not be an excuse for Americans to sit on their hands if they are due to receive a refund, as a majority of taxpayers receive every year.

Taxpayers should file as soon as possible so that they receive their money back from the government as soon as possible. Failure to do so means extending the interest free loan that many individuals give the government from overpaying taxes throughout the year.

According to IRS data, almost three in four Americans receive a tax refund averaging $3,000. Despite this, many people wait until the last minute to file every year.

Based on prior years, an estimated 35 million Americans – or 25 percent of total filers – wait until the last two weeks of tax season (April 1-15) to file. Of these 35 million taxpayers, over half receive a refund averaging $2,000. 

This could equal to $35 billion that can be sent back to the economy -- money which the IRS owes taxpayers. At the best of times, this is a significant sum. At a time of unprecedented economic volatility, this injection of cash is vital.

While the administration should be praised for delaying the tax deadline, this should not be an excuse for needless delay on the part of American taxpayers. They should file as quickly as possible to receive the thousands of dollars they are likely owed -- a move that will collectively inject billions of dollars into the economy.

Photo Credit: Martin Haesemeyer


ATR Supports Russ Vought Nomination for OMB Director

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Posted by Alex Hendrie on Wednesday, March 18th, 2020, 5:00 PM PERMALINK

ATR President Grover Norquist today released the following statement in support of Russell T. Vought for the position of Director of the Office of Management and Budget (OMB):

“Russ Vought has been a champion of pro-growth, fiscally responsible regulatory reform, spending reform, and tax reform. He is the perfect choice to permanently lead the Office of Management and Budget and shepherd through policies that address Washington’s overspending problem and grow the economy. The Senate should swiftly confirm him to lead OMB.”

Photo Credit: The White House


Admin's Floated "Buy American" Mandate Could Create Pharmaceutical Shortages

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Posted by Alex Hendrie on Wednesday, March 18th, 2020, 4:14 PM PERMALINK

Recent reports indicate that the administration may propose a “Buy American” executive order that would impose domestic purchasing requirements on pharmaceuticals and medical supplies.

If implemented this Buy American mandate would disrupt existing supply chains at a time that medical care is needed now more than ever.

It would lead to higher costs, could prompt retaliatory actions from foreign countries, and could further harm economic growth. At the very least, this issue should be debated at a time when the country and the world is not in a global pandemic.

The supply chain for biopharmaceuticals is inherently global and diverse. It is complex and incorporates numerous inputs from across the globe including raw materials, active pharmaceutical ingredients, and high precision analytical tools. 

By design, it is also efficient and flexible in order to protect against emergencies including regional disruptions in manufacturing or shortages.

A Buy American mandate threatens this efficiency and flexibility. It would increase costs and make the industry less efficient. A best-case scenario would require significant and time-consuming changes to existing supply chains that would result in increased long and short-term costs. 

At worst, there would be significant disruptions to pharmaceuticals due to a lack of access to raw materials, labor force issues, and existing regulations hampering manufacturing.

The fact is, manufacturing is capital intensive and requires numerous inputs, regardless of whether it involves pharmaceuticals, machinery, or electronics. Recent policy proposals that restrict the supply chain such as tariffs have already crushed many types of manufacturing. It has also led to retaliatory measures from foreign trading partners that have further harmed American businesses.

A buy American mandate risks doing the same to the pharmaceutical industry.

If the administration wants to encourage American manufacturing, it should promote policies that encourage investment and allow businesses to grow and avoid new mandates.

Photo Credit: wp paarz


Congress Should Reject Efforts to Add Surprise Billing Proposals to Coronavirus Legislation

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Posted by Alex Hendrie on Wednesday, March 18th, 2020, 9:00 AM PERMALINK

According to recent media reports, members of the House and Senate are pushing to add unrelated price controls legislation to the phase three Coronavirus legislation. This would add contentious legislation dealing with surprise medical billing that has been opposed by conservatives on and off the hill to legislation that is being considered because of a national emergency. This should be rejected. 

Conservatives oppose price controls because they utilize government power to forcefully lower costs in a way that distorts the economically efficient behavior and natural incentives created by the free market.

Unfortunately, some lawmakers have proposed to implement price controls as a solution to surprise medical billing, which is when an individual receives an unexpectedly high medical bill as a result of being out of network or receiving emergency care.

While surprise billing should be addressed, some lawmakers have proposed solving this problem by using the heavy hand of government to set rates for any payments made to out-of-network providers. Under this proposal, the government would set a benchmark rate to resolve out-of-network payment disputes between insurers and providers. Benchmark rate-setting would replace private negotiations between insurers and providers with government-set prices, a blatant price control on the healthcare system. 

By giving government more control over the healthcare system, this rate setting proposal inches the healthcare system closer to socialized healthcare, which the left disingenuously calls “Medicare for All.”

Under Medicare for All, the government would set prices for all healthcare, an outcome that will lead to lower quality of care for patients and cut doctor compensation, which will reduce the amount of care supplied. 

Under this system, Americans would not have a choice of insurer or health benefits and the development of new treatments and technologies would be slowed. Under this system, Americans would not have a choice of insurer or health benefits and the development of new treatments and technologies would be slowed.

Unsurprisingly, there is significant opposition from conservatives to price setting and price controls. 75 conservative organizations recently released a letter urging Trump and Republican members of the House and Senate to oppose any price controls.

In addition, Congressman Andy Harris (R-Md.) released a letter signed by 39 conservatives in the House including new White House Chief of Staff Mark Meadows, House Freedom Caucus Chairman Andy Biggs (R-Ariz.), House Judiciary Committee Ranking Member Jim Jordan (R-Ohio), and Republican Study Committee Chairman Mike Johnson (R-La.).

Lawmakers need to take a serious, deliberative approach in addressing surprise billing instead of rushing to attach a flawed proposal that imposes price controls onto Coronavirus legislation. 

Photo Credit: Barnyz - Flickr


Democrats Are Playing Politics With Coronavirus Legislation

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Posted by Alex Hendrie on Wednesday, March 4th, 2020, 12:28 PM PERMALINK

Democrats are exploiting the Coronavirus epidemic in an effort to impose partisan, socialist price controls on lifesaving cures.

According to media reports, House Democratic leadership is proposing a Coronavirus emergency spending package legislation that includes price controls on any vaccine, therapeutic, or diagnostic developed to treat the disease.

Republicans in the House and Senate should reject this poison pill and ensure that medical innovation is protected in the supplemental legislation.

Manufacturers are acting swiftly to ensure the creation of Coronavirus cures. However, enacting price controls will suppress the research and development that is needed to create these cures. If this proposal is made into law, it will mean fewer cures and slower development. It could even lead to government rationing of Coronavirus cures, allowing the government to pick and choose who “deserves” a vaccine.

Price controls on Coronavirus cures will also set a precedent to put price controls on other lifesaving medicines, a long-held goal of the left. As recently as last year, Democrats passed a proposal to impose government prices on medicines under threat of a 95 percent excise tax on medicines.

This is the wrong approach to ensuring the development of Coronavirus cures and should be opposed by lawmakers.

Photo Credit: Steve Jurvetson


Senate Should Reject Legislation Undoing GILTI High-Tax Exemption

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Posted by Alex Hendrie on Monday, March 2nd, 2020, 2:27 PM PERMALINK

Senator Sherrod Brown (D-Ohio) and Finance Committee Ranking Member Ron Wyden (D-Ore.) have introduced legislation that would undo the existing high-tax exception (HTE) for the Global Intangible Low-Taxed Income (GILTI) provision. This will result in double taxation on American businesses operating overseas and undermine the Tax Cuts and Jobs Act (TCJA).

This legislation, S. 3280, the “Blocking New Corporate Tax Giveaways Act,” should be rejected by the Senate.

GILTI was created to prevent taxpayers from eroding the U.S. tax base by assigning income to low tax jurisdictions. However, the provision was designed based on the pre-TCJA tax system which required companies to allocate a portion of domestic expenses to foreign income calculations. This resulted in a post-TCJA tax code where American businesses faced additional foreign tax liability because GILTI inadvertently taxed high-tax foreign income that was previously exempt from U.S. taxation.

To resolve this problem, Treasury proposed rules that allow businesses to elect a high-tax exclusion for a Controlled Foreign Corporation’s (CFC) income if this income is subject to foreign taxes above 90 percent of the corporate rate (18.9 percent based on the 21 percent corporate rate). This HTE ensures the integrity of the new, territorial tax system in a way that protects the U.S. tax base without subjecting taxpayers to double taxation or creating perverse incentives for businesses to restructure.

This legislation is particularly egregious because Congress clearly intended to exclude high tax foreign income from GILTI, as the conference report to accompany the TCJA clearly stated: 

“The Committee believes that certain items of income earned by CFCs should be excluded from the GILTI, either because they should be exempt from U.S. tax – as they are generally not the type of income that is the source of base erosion concerns – or are already taxed currently by the United States. Items of income excluded from GILTI because they are exempt from U.S. tax under the bill include foreign oil and gas extraction income (which is generally immobile) and income subject to high levels of foreign tax.”

The existing high-tax exception should be preserved, not repealed as proposed by Senators Brown and Wyden. Repeal would increase taxes on businesses and undermine the integrity of the Tax Cuts and Jobs Act.

Photo Credit: New America - Flickr


ATR Releases Letter Opposing Importation Of Prescription Drugs From Canada

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Posted by Alex Hendrie on Monday, March 2nd, 2020, 11:00 AM PERMALINK

Americans for Tax Reform President Grover Norquist has released a letter to FDA Commissioner Stephen Hahn urging him to withdraw a proposal that would allow the U.S. to import prescription drugs from Canada. 

[Read the full letter here]

Importation proposals do not address the root cause of high prices, and it is unclear whether this proposal will result in any meaningful savings to consumers or increase access to medicines.

Canada does not have the scale to successfully import drugs to the U.S. As the letter notes: 

Canada is roughly one-tenth the size of the U.S. with a population of 37.5 million and an economy of $1.7 trillion. By comparison, the U.S. has a population of 327 million and an economy of $20.5 trillion. 

Given the disparity in size between the two countries, Canada does not have the scale to effectively import drugs to the U.S. In fact, this proposal may destabilize the Canadian supply chain, a concern raised publicly by Canadian officials.

Even if Canada had the scale to import prescription drugs to the U.S., many innovative medicines that are available to U.S. consumers could not be imported because they are not available in the Canadian market. As the letter notes: 

Of the 290 new medical substances were launched across the world between 2011 and 2018, the U.S. had access to 90 percent of these cures, far exceeding other markets. Canada has access to just 44 percent of cures, but it is far from an outlier. The United Kingdom had 60 percent of medicines, Japan had 50 percent, and Ireland had just 40 percent.

It is unclear whether or not there will be savings from importation. The non-partisan Congressional Budget Office (CBO) has previously estimated that importing drugs from Canada would have a “negligible reduction in drug spending.”

There are also long-standing concerns that importation will flood the U.S. market with unsafe, unvetted drugs. Every single FDA Commissioner and HHS Secretary over the past two decades have raise concerns about importation and declined to vouch for its safety. 

Current HHS Secretary Alex Azar is no exception –– in 2018, he called the proposal a “gimmick” and labeled importation as “open borders for unsafe drugs in search of savings that can’t be safely achieved.”

Finally, importing Canadian drugs is not a free trade measure –– it will import price controls. As the letter notes: 

Free trade means a level playing field where prices are set by the market with no tariffs, barriers, or price controls. Drug importation is the opposite of free trade because foreign countries frequently utilize a range of arbitrary and market-distorting policies to determine the cost of medicines – by definition such approaches are price controls.

Proposals to import Canadian medicines into the U.S. should be opposed. Canada does not have the scale to import drugs to the U.S., the Canadian drug market has far less access to medicine than the American market, the proposal would likely not generate consumer savings, and it would import foreign price controls into the U.S. 

Read the full letter here.

Photo Credit: Flickr- wp paarz


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