Clara Diaz

Rep. Emmer Reintroduces the Retirement Inflation Protection Act

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Posted by Clara Diaz on Tuesday, October 27th, 2020, 11:39 AM PERMALINK

Congressman Tom Emmer (R-Minn.) has reintroduced the “Retirement Inflation Protection Act,” legislation that will amend the tax code to index capital gains taxes to inflation for American taxpayers over the age of 59 ½. 

All Members of Congress should support this important, pro-taxpayer legislation to ensure seniors are not taxed on inflationary gains.

Currently, if a senior purchases a stock for $100, and later sells that same stock for $400, he must report and pay taxes on a $300 capital gain. In many cases, much or all of the capital gain is merely inflation.  With an historical inflation rate of 3%, inflation halves the real value of all assets every 24 years.  While this is bad enough, paying taxes on purely inflationary gains adds insult to injury.

Ending the taxation of inflationary gains will have clear, immediate economic benefits.

Indexation would free up “sticky capital”—buildings, land, stocks—that are held by individuals or businesses rather than sold and put to higher and better use because much of the “capital gain” is inflation and the high capital gains tax discourages mobility of capital. The value of all property in America would increase.

Lowering the capital gains rate would also encourage the formation of more capital and would result in the creation of more jobs, raising wages and worker productivity. 

Ending the capital gains tax would help Americans all across the country. Whether one is a worker saving for retirement or a farmer selling off a parcel of land to acquire capital for new equipment and machinery that would help grow their family business, eliminating capital gains will be beneficial to business.

Recent history shows that reducing the tax on capital gains increases short-term federal revenues by creating an unlocking effect, where pent-up gains they had built up over time are realized at greater rates than they would be if the tax was not changed.

While this bill is a good first step, capital gains taxes should be indexed to inflation for everyone. Americans should not be punished by being taxed on inflationary gains.

There is strong support for indexing capital gains taxes to inflation. ATR President Grover Norquist last year led a coalition of 51 conservative, free-market, pro-business, and pro-family activists and organizations in calling for President Trump to end the inflation tax on capital gains. This policy is also supported by Senator Ted Cruz (R-Texas), White House Chief Economic Adviser Larry Kudlow, Vice President Mike Pence,  Ways and Means Republican Leader Kevin Brady (R-Texas), The National Federation for Independent Business, The Small Business and Entrepreneurship Council, the Republican Study Committee, and The Farm Bureau.

Even current Senate Minority Leader Chuck Schumer (D-N.Y.) once supported ending inflation tax on capital gains. In a 1992 video then-congressman Chuck Schumer stated:

“If we really want to increase growth, there are proposals that we can do. I would be for indexing all capital gains and savings and borrowing.”

Current House Majority Leader Steny Hoyer (D-Md.) also supported indexing capital gains to inflation in 1992. He said

“The capital gains provisions in H.R. 4287 benefit small business by indexing newly purchased assets. Income gauged would be much more reliable so that, real not inflationary gains will be taxed, and taxed at the same 28 percent maximum rate on gains.”

Passage of the Retirement Inflation Protection Act will ensure that seniors are protected from the inflation tax. It will ensure Americans keep more of their own money for retirement by ensuring they do not have to pay taxes on inflationary gains. This is great start, but Congress should continue working towards indexing the capital gains tax for all Americans.

Photo Credit: Mike Lawrence

House Republicans Introduce Commitment to American GROWTH Act

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Posted by Clara Diaz on Monday, October 19th, 2020, 1:46 PM PERMALINK

House Minority Leader Rep. Kevin McCarthy (R-Calif.) and Ways and Means Ranking Member Rep. Kevin Brady (R-Texas) have released H.R. 11, “The Commitment to American Growth, Renewal, and Opportunities for Workers, Technology, and Health” (GROWTH) Act.   

This legislation contains targeted tax cuts that will help the American economy rebound as the pandemic runs its course. 

This effort from House Republicans draws a sharp contrast to Democrat nominee Joe Biden’s plan to impose at least $4 trillion in new or higher taxes including income tax increases, business tax increases, and capital gains tax increases. As part of this proposal, Biden has called for repealing the Tax Cuts and Jobs Act (TCJA), which will increase taxes on Americans at every income level.  

The Commitment to American GROWTH Act will benefit workers, families, and small businesses with further tax cuts that will foster innovation, encourage research and development, and secure America’s medical supplies through four main provisions: 

Strengthening Pro-Growth Tax Cuts to Boost Jobs and Wages 

First, the bill locks in key provisions from the Trump Tax Cuts that support American jobs and paychecks.  This legislation would make full business expensing permanent, as well as the business interest limitation of earnings before interest, taxes, depreciation, and amortization (EBITDA). 

Full business expensing reduces taxes by allowing businesses to deduct the cost of new investments (machinery, equipment etc.) in the year they are made, which incentivizes growth, increases productivity, creates jobs, and raises wages. This also simplifies the tax code by equalizing the tax treatment of new investments with other business expenses such as wages, rent, and healthcare costs.

In a post COVID-19 world, expensing will help businesses make vital investments as they seek to bring workers back, onshore manufacturing capabilities, and ramp up production. Making these provisions permanent will incentivize long-term investments by providing business certainty. 

Supporting and Strengthening American Innovation 

This bill also encourages investment in research and development (R&D) so American businesses can continue to make, buy, and sell American made products.  

Much like full business expensing of new investments, full R&D expensing creates an incentive to increase capital investment, which leads to stronger economic growth, more jobs, and higher wages. The bill proposes doubling the R&D tax credit, which will encourage more American investment and economic growth.  The R&D credit is a general business tax credit companies that incur research and development (R&D) costs in the United States.

Jobs tied to R&D are quality, high paying jobs. In 2017, the average wage for R&D related jobs was $134,978 – 2.4 times higher than the average wage, according to the Bureau of Labor Statistics. Doubling the R&D tax credit will help create more of these quality jobs. 

Incentivizing research will make America a more attractive place to grow a business, and it supports high-paying jobs in production and applied research, ultimately, a higher standard of living for all Americans. 

Encouraging investments in advanced medical manufacturing  

In addition, to strengthening R&D, the bill contains targeted reforms to strengthen American medical development so that our country is not overly reliant on China.

Startup businesses seeking to develop a cure usually have no revenue; therefore, they see no benefit from R&D credits. This provision fixes this aspect, but also provides additional liquidity to startups so they can continue their research. This credit is to be monetized in order to help pre-revenue medical research companies – such as small biotech firms on the frontlines of cures research. In addition, it encourages outside investment in infectious disease drug development firms by allowing any losses to offset other income.  

Investments in advanced manufacturing will help the United States regain its status as a global leader in manufacturing. Growth in America’s medical independence will help retain and create high paying jobs, support domestic innovation, and enhance national security—especially from China—and increase public health. 

Providing liquidity for businesses as they seek to develop cures 

This bill encourages growth and innovation in technology breakthroughs by incentivizing outside investment in startup medical research firms.  

By giving additional tax benefits to investors in certain infectious disease drug development firms, this will help induce investment in medical research startups. This bill will allow America’s innovators to create new companies, such as ones that are working on cures to deadly and rare diseases.  H.R. 11 will allow research startups that change ownership to utilize net operating loss carrybacks which will give startup businesses an additional source of liquidity.  

Growth in innovation and technology breakthroughs gives American innovators a leg up as they work on research and development of new technological findings. 

The best path to rebuilding the economy is pro-growth policies, not tax hikes and intrusive regulations. The Commitment to American GROWTH Act contains a number of targeted provisions that will help the economy recover, policies that draw a sharp distinction to the tax hikes that Democrats support. 

Photo Credit: Brook Ward

Biden’s Plan to End Pass-Through Deduction Will Raise Taxes on Small Businesses

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Posted by Clara Diaz on Wednesday, September 9th, 2020, 11:33 AM PERMALINK

Democrat nominee Joe Biden claims that he will not raise taxes on small businesses if he wins in November.

This is a lie.

Time and time again, Biden has promised to repeal the Republican Tax Cuts and Jobs Act of 2017 (TCJA) “on day one.” If Biden succeeds, millions of American small businesses would see their taxes increase dramatically. 

The TCJA implemented a tax cut for pass-through businesses (partnerships, S-Corporations, LLCs) in the form of a 20 percent deduction for qualified business income, also known as the “pass-through deduction.”

There are about 30 million pass-through entities in the United States, and the deduction effectively reduces the top tax rate on pass-through entities from 37 percent to 29.6 percent. According to the National Federation of Independent Businesses (NFIB), 84 percent of small business owners say that the deduction is “very important” or “somewhat important” to their business.

Small business tax cuts and other pro-growth policies help our economy. Small businesses employ 58.9 million people, which makes up 47.5 percent of the country's total workforce. There are more than 27 million small businesses in the United States, and they generate about 50 percent of our gross domestic product.  

Instead of recognizing that the Trump agenda of tax cuts and regulatory relief has benefited small businesses all across the country, Democrats have fought tooth and nail to repeal the TCJA. Democrats including Biden’s Vice-Presidential nominee Kamala Harris also unanimously voted against TCJA. 

While Biden claims he would not raise taxes on those making less than $400,000, this is a lie. This statement contradicts his repeated promise to repeal the entire TCJA. 

In addition, we have heard this middle class tax pledge before. When he was Vice President, Biden made the same promise not to raise taxes on the middle class. During the October 3, 2008 Vice Presidential debate Biden stated:

“No one making less than $250,000 under Barack Obama’s plan will see one single penny of their tax raised whether it’s their capital gains tax, their income tax, investment tax, any tax.” 

However, Biden was instrumental in passing Obamacare, which contained a number of middle class tax hikes, including the individual mandate tax, new taxes on households with health savings accounts, and an income tax hike on those with high medical bills.

In addition, Biden’s vice presidential nominee Kamala Harris has proposed legislation raising taxes on taxpayers earning more than $100,000 per year, a threshold far lower than Biden’s $400,000. She also supports Medicare for All and the Green New Deal which would raise tens of trillions of taxes on the American people.

Based on the Biden/Harris record of proposed and successful tax hikes, it would be no surprise to see their administration move quickly to raise taxes on the middle class and American small businesses.

While Biden claims he will only raise taxes on “the rich,” he has made and broken this promise before. The fact is, if he is elected president, small businesses across the country will see higher taxes that will harm growth and jobs at a time that the economy is recovering.

Photo Credit: PBS NewsHour

Mercatus Study Outlines Pitfalls of Healthcare Transparency

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Posted by Clara Diaz on Tuesday, September 1st, 2020, 9:23 AM PERMALINK

While transparency reforms to the healthcare system are often supported by the public, they often fail to achieve meaningful outcomes. As noted by a recent report released by the Mercatus Center, implementing price transparency measures can do nothing to reduce costs and has little to no benefit for consumers.

The Trump Administration has pushed policies that aim to introduce more transparency into the healthcare system. While this effort to reduce the opacity of the system is laudable, these reforms should consider the past pitfalls with transparency policies and ensure they provide tangible benefits to consumers.

There are several challenges for consumers to properly process and understand healthcare prices. When shopping for goods or services, consumers must understand and compare the options that are available to them. However, searching takes time, money, and energy, especially when products are not well understood by consumers. This is the case when it comes to healthcare – consumers usually do not have a strong understanding of the costs and alternatives already available.

 In addition, consumers often lack the incentive to use these tools to search for lower spending options. Healthcare is frequently consumed during emergencies, so consumers are less price sensitive. Presenting consumers with more information on prices does nothing to actually lower the prices. According to one study in 2011, only about 40 percent of the total dollars spent on healthcare services went toward shoppable services. Therefore, most services may have been situations where browsing scrutinizing the price of health care options that would not have been the top priority. 

Consumers are also already shielded from medical costs through their health insurance plans. While consumers are responsible for paying for premiums and deductibles, they rarely pay full price when consuming healthcare. Instead, insurers negotiate with providers for reduced payments and cover their customers from the full financial burden of their health decisions. In 2018, out-of-pocket payments accounted for only 10 percent of overall healthcare spending.

While tools help consumers search for lower prices are widely available, they have been unsuccessful in lowering costs.

Most private health insurers offer platforms to compare expected out-of-pocket costs, however these platforms are rarely used. In 2012, an estimated 70 percent of enrollees in private plans had access to a price tool. However, of the 140 million health plan members surveyed in a study published in the American Journal of Managed Care, only 2% used available health pricing tools.

Government price transparency tools have also failed. For instance, the New Hampshire Insurance Department and the Center for Studying Health System Change (HSC) conducted a study in 2007 where New Hampshire attempted price transparency by launching its HealthCost website. The site contained costs of 30 common healthcare services and included insurer-specific cost estimates. Outside evaluators tracked the prices of five of those services, some more shoppable than others, to evaluate the program. These studies showed no impact on prices or price dispersion over two years.

Given these findings, future proposals to implement healthcare transparency should be heavily scrutinized to ensure they actually benefits consumers. While any effort to reduce opacity to consumers should be applauded, it is important to remember that past efforts to bring transparency into the healthcare system have been barely used when implemented and have proven ineffective in helping consumers better understand prices.

Photo Credit: Pictures of Money

President Trump Increases Access to Telehealth

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Posted by Clara Diaz on Monday, August 10th, 2020, 11:40 AM PERMALINK

In recognition of the increasing importance of telehealth during the Coronavirus pandemic, the Trump administration on Monday announced an executive order that allows telehealth workers to better treat patients in rural communities.  This order will help improve health care accessibility for the approximately 57 million Americans living in rural communities. 

During the height of nationwide shutdowns, Medicare telehealth visits grew from just a few thousand per week to more than 1 million. In this time of social distancing, telehealth has become a vital source for many Americans looking for safe ways to see their doctor while maintaining social distancing.

In the days following the outbreak of COVID-19, the Trump Administration took steps to expand healthcare access for Medicare beneficiaries by issuing temporary waivers expanding telehealth options. This meant that seniors did not need to come in contact with health care providers to receive the quality of care they expect.

In March, President Trump issued an executive order on telehealth, allowing Medicare beneficiaries to interact with their doctors via phone or video conferencing at no additional cost, covering commonly used services like Facetime and Skype. Prior to President Trump’s order, Medicare was only allowed to pay for telemedicine in certain circumstances, such as for rural patients that lacked easy access to their doctors. In these situations, the patient would have to travel to a medical facility and teleconference with their doctors, and beneficiaries could not generally receive care in their homes. 

The Trump Administration expanded telemedicine in Medicare even prior to the pandemic. Over the past two years, beneficiaries have been able to briefly check in with their doctors via phone, videoconferencing, or online patient portals.

The telemedicine expansion for Coronavirus allowed a wide range of providers (doctors, nurse practitioners, clinical psychologists, and licensed social workers) to offer telehealth services to Medicare beneficiaries. Beneficiaries can receive telecare at any healthcare facility, like nursing homes or physician’s offices, or from the comfort of their own homes. 

Since telehealth is relatively new and growing, the existing Medicare payment structure was unprepared for the surge in telemedicine that the Coronavirus pandemic has caused. The new order requires the Department of Health and Human Services (HHS) to release a revised payment model and test new innovations in order best meet the needs of rural patients.

The order also addresses technological limitations that prevent patients from easily accessing their doctors. Now, the Federal government is directed to launch a joint initiative in 30 days to improve healthcare communication infrastructure and expand rural services

Instead of using the crisis to consolidate more power in the federal government’s hands, President Trump and his administration have made deregulation a central part of the Coronavirus response. State and local governments have followed suit, leading to the suspension of over 800 rules and regulations in total.

As the pandemic continues, access to telehealth for American seniors and individuals in rural areas is more important than ever. President Trump’s new executive order helps achieve this goal by ensuring that Medicare beneficiaries have access to the safe, quality care they need from the comfort of their own homes. 

Photo Credit: Sean Spicer

Democrats Are Playing Politics with PPE Shortages and Nursing Home Deaths

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Posted by Clara Diaz on Wednesday, July 8th, 2020, 1:29 PM PERMALINK

In a Select Subcommittee on the Coronavirus Crisis hearing last week, House Democrats blamed President Trump for personal protective equipment shortages and nursing home deaths.

In reality, the health crisis is a result of China misleading the world of the magnitude and danger of this highly contagious virus, as well as Democratic Governors’ failure to follow federal guidelines correctly.

Speaker Nancy Pelosi (D-Calif.) created the Select Subcommittee on the Coronavirus Crisis to politicize our nation’s Coronavirus response and damage President Trump’s reelection efforts. House Majority Whip Jim Clyburn (D-S.C.), the Congressman who told lawmakers the pandemic was an “tremendous opportunity to restructure things to fit our vision,” chairs the sham committee.

Luckily, Republican members have led the way in holding China accountable. In Thursday’s hearing, House Minority Whip Steve Scalise (R-La.) acknowledged and thanked the American people for the production of PPE (personal protective equipment) to compensate for China’s hoarding. He specifically called out Democrat members for their bill that was introduced this week that would demolish research efforts for lifesaving cures in the midst of a global pandemic.

This is not speculation – according to a Department of Homeland Security report, China deliberately hid the severity of the Coronavirus pandemic in order to have time to hoard PPE. Nevertheless, Democratic members attempted to shift blame from China to Trump and his handling of the national stockpile of PPE.

In fact, the Obama administration significantly depleted the federal stockpile of N95 respirator masks to deal with the H1N1 influenza outbreak in 2009 and never rebuilt the stockpile despite calls to do so. This forced the Trump Administration to take decisive action including activating the Defense Production Act. Fortunately, private companies have instead stepped up to the plate to ensure we have access to much-needed PPE.

As a result, supplies of PPE have met demand caused by COVID. Representatives from over 30 states claimed they haven’t had or are not aware of any COVID-19 patients in their state needing a ventilator and not getting one. In fact, many states are reporting excess supplies of the breathing machines.

Democrat members are also diverting attention away from the decisions made by Blue state governors of like Andrew Cuomo (D-NY) and Gretchen Whitmer (D-Mich.) who flouted Trump’s guidelines regarding forcing COVID-19 patients into nursing homes.

Nursing home residents comprise 0.6 percent of the American population, but account for 42 percent of nationwide COVID-19 deaths. This is a tragedy that could have been avoided if Democrats followed Trump Administration guidance for handling the pandemic. 

As early as February, guidance from the Center for Medicare and Medicaid Services (CMS) noted that elderly populations in Europe were especially vulnerable to the Coronavirus. On March 13, CMS Administrator Seema Verma explicitly stated:

“[u]nder no circumstances should a hospital discharge a patient to a nursing home that is not prepared to take care of those patient’s needs.”   

Instead of abiding by these guidelines, Cuomo's executive order in late March directed the admittance of coronavirus patients from hospitals to nursing facilities, a death sentence for thousands of his elderly constituents.

The statistics coming out of New York tell a clear story of neglect. Since Cuomo’s order, more than 6,000 New York nursing home residents have died as a result of the Coronavirus, about 6 percent of the more than 100,000 nursing residents in the state. After Cuomo’s abject failure became apparent, he backtracked and reversed the order.

The Select Subcommittee on the Coronavirus hearing last week was the latest attempt by Democrats to play politics with our nation’s response to COVID-19, by placing the blame on the President. In reality, the Trump Administration has marshaled a robust response to the Coronavirus pandemic, despite the PPE shortages China caused and the rapidly changing information surrounding the pandemic.


Photo Credit: scchamber

Norquist Discusses Biden Tax Hikes on Your Voice America

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Posted by Clara Diaz on Friday, June 26th, 2020, 5:12 PM PERMALINK

ATR President Grover Norquist joined Bill Mitchell on YourVoice™ America to discuss how Vice President Joe Biden will raise taxes on American families and business by trillions of dollars if elected President in November.


Mitchell noted that Vice President Biden has proposed doubling the 20 percent capital gains tax. As Norquist responded, this tax increase will reduce revenue and reduce economic growth, harming the 401(k)s and savings of American families:


“Every time we raised the capital gains tax, we lost revenue. Every time we’ve cut the capital gains tax, we’ve gained revenue. It is a powerful driver of new investment, jobs, and growth.


It’s a very sensitive tax, that’s why Republicans focus on cutting it and getting rid of it completely. However, Vice President Biden wants to move in the other direction, so think of your 401K and kiss it goodbye with a Vice President Biden administration.”


Mitchell also discussed how Vice President Biden wants to raise the corporate tax rate to 28 percent from the current rate of 21 percent, which would make our corporate tax rate higher than Communist China.


As Norquist pointed out, Trump and Congressional Republicans cut the corporate tax rate to 21%, making the United States competitive once again in the global economy. In contrast, under the Obama/Biden administration, our tax rate was 35 percent, the highest in the developed world.


If Biden succeeds, he will decimate this progress and put the U.S. back at a disadvantage on the world stage. As Norquist notes:


“Sometimes Vice President Biden says he wants to repeal all of the Trump tax cuts, which means taking our tax rates back up to 35%. He’s also mentioned 28%. Regardless, both of these percentages are higher than China. High tax rates drive investment away from the United States, and into China because their tax rate would be lower.”


The Trump Tax Cuts and Jobs Act (TCJA), made several important changes to the tax code, leading to 90 percent of middle class Americans seeing a tax cut. The GOP tax cut has grown the economy, reduced taxes for the middle class, given workers a pay raise and new employee benefits, reduced utility costs, and given families relief from Obamacare.


Norquist pointed out the stark contrast between the failed tax-and-spend liberalism of the Obama/Biden regime and Trump’s successful pro-growth tax policies:


“Note the difference from three years ago. Every American saw lower rates and 90% saw lower tax burden. It was a tax cut for everyone and gave us strong growth.”


Biden has threatened to repeal the TCJA time and time again, a direct tax hike on middle class Americans. 


The average income of a family of four in the United States today is $74,000. Under Vice President Biden’s plan to repeal the TCJA, they would see a $2,000 dollar a year tax increase. A single parent household would see a $1,300 tax increase.


Norquist outlined how Biden’s plan to raise middle class taxes by repealing the TCJA would decimate middle class savings:

“They will hurt the middle class. 60 million people have 401(k)s and 50 million have IRAs- 80 million households have a 401k or an IRA. We know that everything Vice President Biden would do from tax increases to giving the labor unions more power to trial lawyers to having more regulations- all of those make your 401(k) smaller and your savings becomes worth less. 80 million households is not 1 percent of 200 million adults.”


Ultimately, a Biden Administration would harm 401(k)s and American savings by doubling capital gains taxes, would raise the corporate tax rate higher than Communist China, and would directly raise taxes on middle class families by repealing the Trump tax cuts.


As middle-class voters head to the polls this fall, they should remember how President Trump and the Republican Party have consistently worked towards growing their savings and the economy with powerful pro-growth tax policy.

Photo Credit: Gage Skidmore

Small Businesses are Losing Workers Because of Dem Welfare Proposal

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Posted by Clara Diaz on Friday, June 19th, 2020, 2:42 PM PERMALINK

Democrats have exploited the Coronavirus pandemic to expand unemployment benefits in order to subsidize welfare over work.

In March, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. As a condition of supporting this legislation, Democrats demanded a $600 per week unemployment expansion for individuals on top of their existing state benefits. 

While Americans that have lost their jobs certainly need help, this new program has created a situation in which individuals are being paid more to sit at home than they were making in the workforce.

According to the Heritage Foundation, a job would have to pay more than $62,000 a year to exceed the left’s unemployment expansion. The Congressional Budget Office estimates that five out of six Americans on unemployment are receiving more than they were making in their jobs, creating a massive disincentive for Americans to return to the workforce as the country reopens. 

Democrats are now pushing to extend the $600 UI program past the election. House Democrats recently passed the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, a massive 3 trillion-dollar liberal wish list that extends the Democrat UI expansion through January 2021.

If Congress continues to subsidize welfare over work, it will jeopardize our post-pandemic recovery and force hundreds of thousands of small businesses to shut their doors permanently.

This is not theoretical. Here are real-world examples of American businesses struggling to bring back workers because they cannot compete with Democrat Party’s new welfare program:

 Jamie Black-Lewis, a Washington-state based spa owner said that her employees were angry about having to give up their unemployment and return to work. As noted by an April 22 CNBC report:

When Black-Lewis convened a virtual employee meeting to explain her good fortune, she expected jubilation and relief that paychecks would resume in full even though the staff — primarily hourly employees — couldn’t work.

She got a different reaction.  

“It was a firestorm of hatred about the situation,” Black-Lewis said.

Liz Blondy, a Detroit based dog day care owner had to lay off 90% of her staff; thus, dropping her business by 95%.  Many business owners struggle with the fact that travelling to work may be risking during a pandemic. As noted in an April 11 New York Times article:

When Michigan’s stay-at-home order was announced, Ms. Blondy laid off 70 of her 90 workers and saw her business drop by 95 percent.

Now, she is… considering bringing her team back.

But some of the workers have said they’d rather stay on unemployment or be laid off.

Carl Livesay, vice president of operations for a Baltimore-based manufacturer Maryland Thermoform Corporation. is struggling to find workers to show up for interviews.  According to a May 23 CBS19 report:

"It's been very difficult to get some people to return to work,” Livesay, the vice president of operations for Maryland Thermoform Corporation, told ABC News.

“We're interviewing three to five people a day for jobs we have open, and we can't even get them to show up for interviews."         

Nabil Cabbabe, president of the Bank of Houston/Spirit Bank in Missouri feels though the situation brought on by the government programs put some businesses in an undesirable situation. This is noted in an April 22 Forbes article:

“We’re not really sure what to do,” says Nabil Cabbabe, president of the Bank of Houston/Spirit Bank in Missouri who also runs an after-school gymnastics center that received a PPP loan. “It’s tricky. They've kind of pitted us against our employees a little bit.”  

Sky and Geoff Marietta, the married couple who owns a coffee shop in Harlan, Kentucky are contemplating that it is a logical choice for a lot of their employees to stay unemployed-for their own benefit, as stated in an April 21 NPR report:

"The very people we hired have now asked us to be laid off," Marietta wrote in a blog post. "Not because they did not like their jobs or because they did not want to work, but because it would cost them literally hundreds of dollars per week to be employed."

Ian Lieberman, a multi-unit franchisee for Fuzzy's Taco Shop in Tampa, FL. The extra $600 boost to unemployment is making it difficult for some small-business owners to hire laid-off workers, as Liaberman noted in an April 26 Business Insider article:

"We have had many staff that have said at this point the best thing they can do for their family is to collect unemployment," said Ian Lieberman, a multi-unit franchisee for Fuzzy's Taco Shop in Tampa, Florida. "When they explained their reasoning, I said I respected that and that they would be available for rehire."

Adam Lowe, the co-owner of Sundara Indian Cuisine in San Diego, has felt frustration regarding hiring employees over the past few weeks, as reported in an April 26 Business Insider article:

Adam Lowe, the co-owner of Sundara Indian Cuisine in San Diego, said he "ran into a wall" trying to hire cooks for his restaurant over the past few weeks.

"Everyone I was talking to was going on unemployment and getting raises," said Lowe, who pays cooks about $20 an hour.

"The $600 weekly payout has derailed the system," he said.

Curt Blackwell owns two restaurants in central Missouri and has to go against the unemployment bonus in order to retain employees, according to an April 26 Business Insider report:

Curt Blackwell, who owns two restaurants in central Missouri, said he had received $90,000 in forgivable loans through the federal Paycheck Protection Program to stay afloat. The program requires that recipients spend 75% of PPP funding on payroll.

But Blackwell said it had been hard to persuade his laid-off staffers who were receiving unemployment benefits to come back to work.

Alex Shahabe is the owner of PC Housing. His company provides temporary housing to corporate workers and military personnel on short-term assignments across the globe. When trying to hire back the employees he had to lay off, he was up against the fact that they were making more money with this subsidy, as reported in a May 12 Providence Journal article:

“We had a couple people say: Wait a minute, I am making more being unemployed,” Shahabe said. “The conversation we had was do you want a secure job and for us to figure out how to move forward, or would you rather be on unemployment, and how long will that last?”

Steve Anthony, CEO of Anthony Timberland’s pine mills in Arkansas, found that many of his workers wanted to be laid off and receive unemployed, according to an April 4 article appearing in the Arkansas Democrat & Gazette:

Some 200 workers at Anthony Timberlands' pine mills in Malvern and Bearden will be laid off temporarily, in part because they prefer to receive unemployment checks that will be larger than their take-home pay, Steve Anthony, the company's chief executive officer, said.

Lia Hakim, owner of Hott Salons, in New York, found that her employees did not want to return to work, instead preferring to stay on unemployment where they would earn more. As noted in a  May 11 CNBC article:

 Meanwhile, her entry-level employees are reluctant to return. “They don’t want to come back,” she says. “They’re making more money sitting at home.” She is referring to the $600 bump up in unemployment checks under the CARES Act added to traditional unemployment checks, which in New York State max out at $504 a week.

Photo Credit: United States House of Representatives or Office of the Speaker of the House

Pelosi's SALT Proposal Does Nothing to Help Middle Class or Fight COVID-19

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Posted by Clara Diaz on Monday, June 1st, 2020, 3:27 PM PERMALINK

House Speaker Nancy Pelosi (D-Calif.) is pushing an 1,800-page Coronavirus package filled with unrelated, liberal priorities. The bill, known as the Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES), proposes spending nearly $1 trillion to bailout mismanaged state and local governments, contains a $25 billion bailout for the postal service, and extends an unemployment program for more 6 months that will endanger the economic recovery by subsidizing welfare over work.

As part of this proposal, Pelosi also proposes a suspension of the $10,000 cap on state and local tax deductions a policy that will subsidize high-tax states, does nothing to help the middle class, and rolls back the Trump tax cuts.

In 2017, the Tax Cuts and Jobs Act (TCJA) imposed a $10,000 limitation on state and local tax deductions, more commonly referred to as the SALT cap.

The cap was imposed to broaden the tax base within legislation that reduced taxes for Americans at every income level. For instance, the TCJA reduced taxes for roughly 90 percent of Americans and for taxpayers at every income level through lower rates, the expanded standard deduction, and the doubling of the child tax credit. A typical family of four with median annual income of $73,000 has seen a tax cut of more than $2,058, a roughly 60 percent reduction in federal income taxes.

Rather than building on the TCJA and offering further tax reduction for American families, Pelosi is pushing a policy that overwhelmingly benefit wealthy, blue states.

According to an analysis by the Joint Commission on Taxation (JCT),  94 percent of the benefits from repealing the SALT cap would go to taxpayers making more than $200,000 a year.

Rolling back the SALT cap would do nothing to help fight the Coronavirus, nor would they do anything to help the middle class. Rather than enacting Pelosi’s blue state giveaways, lawmakers should make the tax code fairer by repealing the SALT cap in exchange for further lowering tax cuts

Even some Democrats agree that removing the SALT cap is a terrible idea that would do nothing to help the middle class. Senator Michael Bennet (D-CO) recently criticized efforts to repeal the SALT cap noting that it runs counter to Democrat ideals:

“We can say we’re for a progressive tax bill and for fighting inequality, or we can support the SALT deduction, but it’s really hard to do both of those things.” Lawmakers should repeal the SALT deduction entirely as part of legislation that offers broad based tax reduction for American families.

While Pelosi claims that her legislation is helping the middle class, this is empty rhetoric, as noted by Senate Majority Leader Mitch McConnell (R-KY):

“It’s bad enough that my Democratic colleagues want to unwind tax reform, but it’s downright comical that their top priority … is helping wealthy people in blue states find loopholes to pay even less”.

While Democrats are pushing long-held liberal priorities, Republicans have called for proposals that are targeted to the middle class and Main Street businesses. President Trump has called for tax cuts for businesses and individuals in order to give workers more take-home pay and give businesses the liquidity they need to survive the pandemic.

Republicans have also pushed the Paycheck Protection Program (PPP) to provide loans and grants to small businesses so they can continue paying their workers. In contrast, Pelosi and Democrats have played politics with this program and refused to hold a vote on providing additional funding to the PPP for weeks.

Pelosi’s proposal to repeal the SALT Cap is a clear example of using the crisis to push unrelated policy priorities. This proposal will do nothing to help Americans survive the Coronavirus pandemic and would overwhelmingly benefit wealthy blue states. It is uniquely unsuited to any pandemic-related legislation and should be rejected by Congress.

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