Alex Hendrie

Joe Biden’s Tax Day Promise - $4 Trillion In Tax Hikes

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Posted by Alex Hendrie on Wednesday, July 15th, 2020, 11:31 AM PERMALINK

Due to the Coronavirus pandemic, the Trump administration delayed Tax Day for three months – moving the deadline to file taxes from April 15 to July 15. 

Now that it is Tax Day, it is worth noting that a President Joe Biden will raise taxes across the board on American families and businesses.

In total, Biden has called for at least $4 trillion in new or higher taxes including income tax increases, business tax increases, and capital gains tax increases.

Biden has repeatedly called for repealing the Tax Cuts and Jobs Act (TCJA), which will increase taxes on Americans at every income level.

While the Biden and others on the left falsely claim that the Trump tax cuts only benefited “the rich,” the TCJA led to strong tax reduction for American families. 

By repealing the TCJA, Biden will increase taxes on American families earning the median annual income of $73,000 by over $2,000. A single parent with one child making $41,000 would see a $1,300 tax increase each year.

The twenty-two million American families that take the child tax credit will see it cut in half from $2,000 to $1,000. 4.5 million households that have seen relief from the Alternative Minimum Tax will once again face this onerous burden.

Biden also says he will bring back the Obamacare individual mandate tax penalty, which was zeroed out in the TCJA.

Before it was repealed, the individual mandate was one of the most regressive taxes in the code and forced individuals to purchase government approved health insurance or pay a tax totaling almost $700 for an individual and $2,000 for a family. In 2017, the Obamacare individual mandate tax hit 4,654,990 households and 75 percent of those paying the mandate had annual income of less than $50,000.

Biden also wants to increase taxes on businesses – his plan calls for raising the corporate rate back up to 28 percent or 35 percent – which would make the U.S. rate higher than China.

He also proposes several new taxes on businesses including a 15 percent minimum tax and repealing the 20 percent “small business” deduction enacted by the TCJA.

Increasing taxes on small and large businesses will harm American workers and make the U.S. a less competitive place to do business.

Biden also proposes doubling the capital gains tax to over 40 percent, a tax increase that would further harm economic growth, reduce investment, and threaten the creation of new jobs and wage growth.

As the pandemic runs its course, Biden’s tax hikes will threaten our economy’s ability to recover from the nationwide lockdown.

Coronavirus took a sledgehammer to one of the strongest economies in American history. The February 2020 jobs report recorded 19 months of consecutive annual average wage growth of 3 percent or more. The unemployment rate was 3.5 percent – a 50-year low, and labor force participation rate was 63.4 percent, a 7 year high. 

Prior to the pandemic, the tax cuts and other economic policies had led to strong economic growth and wage growth. This economic growth was not limited to any one demographic – unemployment for African-Americans, Asians, Hispanics, and other key groups was at or near record lows.

While the pandemic cut these economic gains short, Job Biden is proposing to increase taxes on American businesses and families at a time that the economy is struggling.

Moving forward, we need policies that will help businesses and workers get back on their feet, not stifling tax increases that will inhibit growth and keep wages down.

Photo Credit: Gage Skidmore

Ways and Means Republicans Release Legislation to Encourage Startup Medical Development

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Posted by Alex Hendrie on Thursday, July 9th, 2020, 3:20 PM PERMALINK

Republican Members of the House Ways and Means Committee have released several pieces of legislation designed to incentivize startup businesses engaged in the development of new therapies and cures.

The legislation especially focuses on developing cures for infectious diseases, such as antibiotics, antivirals, and vaccines. This is a complex, costly, time consuming, and risky process, especially given that many companies engaged in this R&D are startup enterprises that can struggle to attract the investment needed.

The legislation released today by Ways and Means Republicans led by Ranking Member Kevin Brady (R-Texas) attempts to incentivize the development of new cures for infectious diseases by creating tax incentives that will help encourage investment, including through the expansion of the R&D credit, giving innovators additional liquidity, and encouraging further outside investment in startup innovators.

This approach also draws a stark contrast with the policies of Congressional Democrats that would crush medical innovation. Speaker Nancy Pelosi (D-Calif.) and House Democrats have passed legislation that would force medical innovators to accept government set prices or be hit with a 95 percent excise tax on their medicines.

This proposal undermines the development of new medicines at a time when manufacturers are racing to find COVID-19 cures.  According to the Council of Economic Advisers, Pelosi’s proposal could prevent 100 lifesaving and life-preserving medicines from being created over the next decade.

The proposals released today by Ways and Means Republicans include:

The More Cures Act, introduced by Rep. Devin Nunes (R-Calif.). This proposal provides a “bonus R&D credit” of 14 percent of any qualified research costs associated with the development of certain cures like infectious disease therapies. This applies on top of the normal R&D credit that is already available to taxpayers.

Start-ups for Cures Act, introduced by Rep. Devin Nunes (R-Calif.). This proposal allows medical research startup businesses (with less than $1mil of gross receipts) to monetize unused credits. Startup businesses seeking to develop a cure usually have no revenue so see no benefit from R&D credits. This legislation fixes this and provides additional liquidity to continue research and development.

The Countermeasures Investment Act, introduced by Rep. Mike Kelly (R-Pa.). This legislation encourages outside investment in startup medical research firms by giving additional tax benefits to investors in certain infectious disease drug development firms. This will help encourage investment in medical research startups so they are able to invest as needed.

The American Innovation Act, sponsored by Rep. Vern Buchanan bill (R-Fla.). This legislation allows medical research startups that change ownership the ability to utilize net operating loss carrybacks. This will help provide liquidity for businesses as they seek to develop cures.

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Trump Economy Adds 4.8 Million Jobs as COVID-19 Recovery Continues

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Posted by Alex Hendrie on Thursday, July 2nd, 2020, 10:08 AM PERMALINK

The economy is continuing to recover strongly from the Coronavirus pandemic, with 4.8 million jobs created in June, an all-time record. The unemployment rate dropped more than two percentage points from 13.3 percent to 11.1 percent, according to the June jobs data released by the Bureau of Labor Statistics. 

The June jobs numbers again beat estimates, which ranged from 2.4 million to 2.9 million jobs gained. Job gains in May were also revised upward by almost 200,000, bringing the total May jobs gains to 2.7 million.

The labor force participation rate increased by 0.7 percent to 61.5 percent. The number of Americans employed part-time due to the economic slowdown dropped 1.6 million.

The job gains include almost 740,000 retail jobs and 2.1 million leisure and hospitality jobs. Over 350,000 manufacturing jobs were also added.

While more work remains to be done and the recovery is not yet complete, these job gains vindicate the tax cut and deregulatory policies pushed by President Trump and Congressional Republicans.

Instead of expanding government, the Trump administration has responded to the pandemic by repealing regulations. All told, over 700 regulations have been suspended or waived at the federal, state, and local level.

Moving forward, if Congress decides further COVID-19 relief legislation is necessary, it should be narrow and targeted in scope. Efforts by Democrats House Speaker Nancy Pelosi to pass trillions of dollars in further legislation should be rejected.

Photo Credit: Gage Skidmore

Lawmakers Should Reject Harmful "Buy American" Amendments To FY21 NDAA

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Posted by Alex Hendrie on Tuesday, June 23rd, 2020, 9:00 AM PERMALINK

ATR President Grover Norquist has released a letter to the House Armed Services Committee urging lawmakers to reject any "Buy American" amendments to the FY 2021 National Defense Authorization Act (NDAA). 

Some lawmakers are using the COVID-19 pandemic as an excuse to push Buy American mandates, which would place unnecessary sourcing requirements on medicines and medical inputs purchased with federal dollars. 

If implemented, Buy American mandates will disrupt the medical supply chain, threatening timely access to medicines and leading to retaliatory actions from trading partners. During this unprecedented health crisis, a Buy American policy could even threaten our ability to adequately respond to the pandemic.

Click here to read the full letter. 

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ATR Urges Republicans to Oppose COVID-19 Government Healthcare Expansion

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Posted by Alex Hendrie on Monday, June 15th, 2020, 8:00 AM PERMALINK

In a letter to Senate Majority Leader Mitch McConnell (R-Ky.) and Senate Finance Committee Chairman Chuck Grassley (R-Iowa), ATR urged Republicans to reject efforts by far-left politicians to allow COVID-19 to lead to a government takeover of healthcare.

Liberal politicians are exploiting the pandemic to push government-run healthcare, an outcome that would move us closer toward the Left’s ultimate goal of socialist, single payer healthcare.

If the left is successful in expanding government healthcare, Americans will face higher taxes, healthcare shortages, and a loss of their quality, private health insurance.

If lawmakers decide to pursue another Coronavirus package, they should consider a temporary, targeted proposal to help recently laid-off Americans retain their employer provided health insurance through a COBRA subsidy. 

This would be a vastly superior alternative to expanding government healthcare programs like Obamacare or Medicaid.

It would also be a way to help Americans that have lost their jobs instead of extending the $600 supplemental pandemic unemployment program.

The full letter can be found here.

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ATR Supports the Small Business Expense Protection Act

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Posted by Alex Hendrie on Thursday, June 4th, 2020, 9:39 AM PERMALINK

ATR President Grover Norquist today released a letter in support of S. 3612, the “Small Business Expense Protection Act.”

This legislation has been introduced by Senator John Cornyn (R-Texas), Senate Finance Committee Chairman Chuck Grassley (R-Iowa), Finance Ranking Member Ron Wyden (D-Ore.), Senator Tom Carper (D-Del.), and Senate Small Business Committee Chairman Marco Rubio (R-Fla.).

This legislation restores congressional intent over the Paycheck Protection Program (PPP) by allowing small businesses to deduct business expenses paid using loans received through the program.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act created the PPP to provide small businesses impacted by COVID-19 with emergency liquidity so they could continue making payroll and meeting other business expenses.

However, on April 30, the IRS released Notice 2020-32, which prohibited businesses from deducting expenses paid with a PPP loan such as payroll, rent, and utility expenses, even though these expenses would otherwise qualify as ordinary, tax deductible business expenses.

Denying the ability of small businesses to deduct expenses paid with PPP loans will impose an additional tax burden on these businesses that will erode a portion of the financial assistance granted through the program. This will only harm small businesses across the country as they attempt to survive and re-engage in commerce in the wake of the pandemic.  A recent second tranche of PPP loans averaged just $79,000 per business, so the financial assistance businesses receive is relatively modest.

The IRS Notice clearly disregards Congressional intent as Section 1106(i) of the CARES Act clearly states that any PPP loan should be exempt from taxation if such loan is forgiven. Further, Congressional leaders from both sides of the aisle recently urged Treasury to reverse course, noting that the IRS Notice “ignores the overarching intent of the PPP, as well as the specific intent of Congress to allow deductions in the case of PPP loan recipients.”

Congress should pass the Small Business Expense Protection Act. This legislation will uphold Congressional intent by allowing small businesses to deduct business expenses paid by PPP loans, a measure that will ensure businesses do not face additional taxation from COVID-19 relief measures.

See the full letter here.

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Trump Admin Allows 401ks to Invest in Private Equity

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Posted by Alex Hendrie on Wednesday, June 3rd, 2020, 4:51 PM PERMALINK

The Trump administration is expanding options for retirement savings by allowing Americans with a 401k to invest in private equity funds.

The Department of Labor (DOL) today announced it is issuing guidance allowing private equity investments to be a component of professionally managed investment funds offered to Americans with a defined contribution benefit plan.

Previously, Americans with a 401(k) were unable to invest in private equity funds, even though this investment option was widely used by public pension funds and large investors. The Trump administration’s deregulatory action will open up private equity investment to the roughly 80 million American families and individuals that actively participate in a 401k or other defined benefit plan.

“The Trump Administration’s decision to allow Americans to invest in private equity with their 401(k)s is a big win that will give every family saving for retirement more options,” said Grover Norquist, President for Americans for Tax Reform. “Big pension plans already had this option. Now everyone does.”

Photo Credit: Gage Skidmore

ATR Leads Coalition Letter Urging Deferral of Alcohol Excise Taxes

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Posted by Alex Hendrie on Wednesday, June 3rd, 2020, 5:00 AM PERMALINK

Americans for Tax Reform today released a coalition letter signed by over 30 organizations and activists urging Treasury Secretary Steven Mnuchin to delay excise tax payments for beer, wine, and distilled spirit manufacturers and importers through the end of 2020. 

As the letter notes, COVID-19 has forced the closure of retail establishments, tasting rooms, restaurants and bars, a situation that has weakened consumer spending, and threatened the livelihood of small businesses. This decline in commerce has harmed alcohol manufacturers and importers, especially smaller breweries, distillers, and wineries. Delaying payments of excise taxes is a modest step toward helping manufacturers and importers:

“Deferring excise tax payments will help these businesses receive much needed emergency liquidity and allow them to prioritize paying workers and meeting expenses over making tax payments. This is a modest step toward helping businesses, as these taxes will eventually be repaid.”

Treasury has already utilized its legal authority to postpone excise taxes for the second quarter of 2020. Moving forward, this should be extended through the end of 2020.

In addition, it is imperative that any excise tax deferral apply equally to importers. As the letter notes, there is no reason to exclude or limit importers given they face the same excise taxes as products manufactured in the U.S, and face the same economic challenges.

The Q2 excise tax deferment imposed burdensome requirements on importers by requiring “significant financial hardship,” which U.S. Customs and Border Protection defined as a loss of more than 40 percent in revenue. This is the wrong approach – excise tax deferral should be available equally to all alcohol manufacturers and importers.

Deferring excise tax payments for distillers, breweries and wineries through the end of the year is a simple step that will help manufacturers and importers as they look to survive the damage caused by COVID-19.

The full letter can be found here.

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Trump Admin Releases Plan to Reduce Insulin Costs

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Posted by Alex Hendrie on Tuesday, June 2nd, 2020, 12:16 PM PERMALINK

Last week, the Trump administration announced a plan to lower out of pocket insulin costs for American seniors. This proposal will drive significant savings to millions of seniors through negotiation with the private sector, not price controls.

Under the proposal, released by the Centers for Medicare and Medicaid Services (CMS), 1,750 Medicare Part D plans and Medicare Advantage Prescription Drug Plans have agreed to offer a range of insulin products at a maximum copay of $35 for a month’s supply.

According to CMS, seniors in all 50 states, the District of Columbia, and Puerto Rico will have access to a plan that offers insulin at this lower cost. Under the model, the average senior could see savings of 66 percent, or $446 in annual out of pocket costs. Over 3.3 million seniors take one or more forms of insulin, so this proposal could deliver significant savings.

This proposal also addresses a key flaw in the Part D coverage benefit. Currently, seniors can have different out of pocket costs depending on which phase of the coverage benefit they are in. The administration’s proposal will fix this and give seniors a stable copay for insulin regardless of which benefit phase they are in. This will be especially beneficial for seniors that are in the coverage gap threshold (between $4,020 and $9,719 in spending), who have to pay 25 percent of the costs of insulin and other medicines.

This proposal is a welcome example of the government working with the private sector to lower prices, instead of relying on government rules or mandates to dictate prices.  88 plan sponsors and major insulin makers Novo Nordisk, Eli Lilly, and Sanofi have signed up for this model, so there is significant support for the proposal amongst industry stakeholders.

In addition, this proposal draws a stark contrast with healthcare plans proposed by members of Congress that would expand the size of government. For instance, House Speaker Nancy Pelosi (D-Calif.) has a plan to impose a 95 percent excise tax on manufacturers that don’t accept government price setting. This proposal would harm American innovation and medical development, leading to fewer cures, and less R&D in the U.S. It would also serve as a stepping stone toward moving the American healthcare system toward a single payer, socialist system, a long-held goal of the Left.

The administration’s proposal to reduce insulin costs for seniors should be applauded. Instead of adopting price controls, this proposal builds upon the success of Medicare Part D by having the government facilitate competition between the private sector. This is the right way to reduce costs in America’s healthcare system and should be a model for future reform.

Photo Credit: Gage Skidmore

Trump Admin Finalizes Schedule B Regulatory Relief Rule

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Posted by Alex Hendrie on Wednesday, May 27th, 2020, 12:10 PM PERMALINK

Earlier this week, the Trump administration finalized a rule protecting free speech and donor privacy. Under the rule, many nonprofits including 501(c)(4)s, 501(c)(5)s, and 501(c)(6)s would no longer be required to submit a Schedule B form to the IRS.

President Trump, Treasury Secretary Mnuchin, and leaders in Congress including Senate Majority Leader Mitch McConnell (R-KY) and House Minority Leader Kevin McCarthy (R-Calif.) should be congratulated for their work defending free speech. 

Congress first required section 501(c)(3) organizations to send the IRS to personal information of their donors 50 years ago. This information, which includes the names and addresses of donors, is submitted to the IRS on the Schedule B form. The agency later extended this requirement to all other tax-exempt organizations including 501(c)(4)s and 501(c)(6)s.

Schedule B forms are not used for any official purpose and the IRS is prohibited from sharing or disclosing this sensitive information. Instead of serving a legitimate purpose, the disclosure requirement creates needless compliance costs on both non-profits and the IRS.

Ending the collection of Schedule B forms will significantly streamline tax compliance. The Institute for Free Speech estimates that nonprofits would save about $63 million per year compliance costs if Schedule B were fully repealed. 

Opponents of the rule have falsely stated that it allows a flood of “foreign dark money” into the political system. This is not true. As Secretary Mnuchin has noted in the past, this proposal does not limit transparency as the same information will be available to the public as before.

There are already measures in place to track foreign donations, and it is highly unlikely that anyone will admit to funneling illegal money on the form. Even if the IRS did suspect laws were being broken, it has no authority to share the information it collects with the FCC and the DOJ, the two agencies with the ability to enforce campaign finance laws.

Ending the collection of Schedule B forms will instead remove a tool of the left to chill political speech.

Under the Obama administration, there were several cases where agency officials leaked the sensitive information contained on Schedule B forms for political purposes, such as leaking of the schedule B belonging to the National Organization for Marriage.

The IRS record of protecting taxpayers is poor in this space – a 2016 report by the Government Accountability Office warned that the IRS may still be unfairly targeting non-profits “based on an organization’s religious, educational, political, or other views.”

Ending the collection of sensitive taxpayer data for non-profits is a huge victory for free speech and will stop future administrations from targeting these organizations.

Democrats have already tried to block this proposal through the Congressional Review Act process and will undoubtedly continue trying to oppose it in Congress.

Moving forward, further efforts by Democrats to oppose this rule in Congress should be rejected. Instead, lawmakers should follow the lead of the administration and ensure that the prohibition on collecting Schedule B forms is expanded to all non-profits and codified in law.

Photo Credit: Gage Skidmore