Tom Hebert

10 Facts the Media Won’t Tell You About the GOP Tax Cuts

Share on Facebook
Tweet this Story
Pin this Image

Posted by Tom Hebert on Friday, April 12th, 2019, 1:45 PM PERMALINK

[Click here for a PDF of this list]

Here are 10 facts about the Republican-passed Tax Cuts and Jobs Act that the media doesn't want you to know. 

  1. Thanks to tax reform, middle class families are seeing  increased take-home pay:
    • A family of four with annual income of $73,000 (median family income) will see a tax cut of more than $2,058, a 58 percent reduction in federal taxes.
    • A single parent with one child with annual income of $41,000 will see a tax cut of $1,304, a 73 percent reduction in federal taxes.
    • Married small business owners with annual income of $100,000 will see a tax cut of $2,603, a 24 percent reduction in federal taxes.
       
  2. Americans at every income level are seeing significant tax reduction because of the Tax Cuts and Jobs Act:
    • 90 percent of households with income between $40,000 and $64,000 saw a tax cut. Average size of that tax cut: $810.  
    • 91 percent of households with income between $64,000 and $108,000 saw a tax cut. Average size of that tax cut: $1,400
       
  3. Taxes are down 25 percent this year and biweekly paychecks are up by $50 on average:
    • Households are paying lower taxes, down 24.9 percent on average following passage of the Tax Cuts and Jobs Act, according to a report released by H&R Block based on their clients’ tax returns.
    • The tax cuts caused biweekly paychecks to increase $50 per paycheck.
    • The report also breaks down change in tax liability by state. Taxpayers in every state have seen average tax reduction of at least 18 percent: “all 50 states and D.C. saw their average tax liability decrease anywhere from 18.0 percent to 29.1 percent.”
       
  4. Tax rates were cut and pro-middle class provisions were implemented across the board:
    • The middle class marginal tax rates were slashed from 15 and 25 percent to 12 and 22 percent
    • The Tax Cuts and Jobs Act doubled the standard deduction for an individual from $6,000 to $12,000 and for a family from $12,000 to $24,000.
    • The Tax Cuts and Jobs Act doubled the child tax credit from $1,000 to $2,000 per child.
    • The Tax Cuts and Jobs Act raised the threshold of the Alternative Minimum Tax so fewer taxpayers are forced to comply with the provision. 4,464,430 families and individuals paid the Alternative Minimum Tax in 2015.
       
  5. Wages are growing and the job market is strong:
    • Over 2.6 million jobs were created in 2018 and over 5.4 million jobs have been created since the beginning of 2017 according to the Bureau of Labor Statistics.
    • Nominal wages have grown by 3.4 percent over the last year, a ten-year high.
       
  6. Unemployment is hitting historic lows:
    • The unemployment rate is at 3.8 percent. In September, the unemployment rate hit 3.7 percent, a 50 year-low.
    • The hispanic unemployment rate in March 2019 was 4.7 percent, and reached a record low of 4.3 percent in February 2019
    • The African American unemployment rate in March 2019 was 6.7 percent, hitting a record low of 5.9 percent in May 2018. 
    • The number of people collecting unemployment benefits is at a 50-year low, and jobless claims have dropped to the lowest level since 1969. 
       
  7. Thanks to tax reform, American families saw relief from the highly regressive Obamacare individual mandate tax penalty:
    • Obamacare imposed a tax penalty of $695 for an individual and $2,085 for a family of four for failing to buy “qualifying” health insurance as defined by the federal government. The Tax Cuts and Jobs Act repealed this unfair tax.
    • The Obamacare individual mandate tax penalty is one of the most regressive taxes in the code as it disproportionately impacts low and middle-income families:
    • 6,665,480 individuals and families paid a total of $3,079,255,000 in individual mandate tax penalties in 2015.
      1. 37.35 percent of taxpayers (2,489,490 households) that paid the individual mandate made less than $25,000 in annual income.
      2. 78.98 percent of taxpayers (5,264,380 households) that paid the individual mandate made less than $50,000 in annual income.
         
  8. Business confidence is hitting all-time highs following tax reform:
    • Small business optimism is strong, hitting a record high of 108.8 in August 2018 and continues to trend above the historical average at 101.2.
    • Optimism amongst manufacturers hit a record high of 92.4 percent in 2018 according to the National Association of Manufacturers. 
    • Optimism among middle market businesses hit a record high of 136.7 in 2018. 
       
  9. Employers large and small have responded to tax reform by raising pay, creating new jobs, increasing employee benefits, and expanding operations. 
    • Americans for Tax Reform has compiled a list of powerful stories of business owners explaining how the Tax Cuts and Jobs Act has helped them grow their businesses and help their employees.
    • Click here for ATR’s list of over 800 in-their-own-words examples of how the Republican tax cuts have helped businesses large and small.
       
  10. Utility companies in all 50 states are passing on the tax savings in the form of lower rates for customers:
    • This means lower electric bills, lower gas bills, and lower water bills for Americans than if the corporate rate cut had not occurred.

 

[Click here for a PDF of this list]

Photo Credit: Gage Skidmore


Elizabeth Warren Calls for $1 Trillion Business Tax Hike

Share on Facebook
Tweet this Story
Pin this Image

Posted by Tom Hebert on Thursday, April 11th, 2019, 11:05 AM PERMALINK

Democratic presidential hopeful and U.S. Senator Elizabeth Warren (D-Mass.) today proposed a new, $1 trillion tax on American businesses.

Warren’s proposal would impose a 7 percent tax on the revenues of American corporations.  This new tax would apply on top of the 21 percent corporate income tax and would apply to worldwide income of American companies that has already been taxed in the country where it was earned. According to her estimates, this plan would raise $1 trillion over a decade.

This proposal would increase the amount of money the federal government collects from corporations by 30 percent and also increase compliance costs for businesses, as calculating the surcharge requires a different accounting method.

This tax hike is also likely just the tip of the iceberg as Warren told POLITICO she intends to propose more corporate tax increases: “our corporate tax code is so littered with loopholes that simply raising the regular corporate tax rate alone is not enough.”

Increasing taxes on businesses will make America less globally competitive and will undercut today’s strong economic growth, growing wages, record job openings, and lower utility bills.

This is just the latest tax hike coming from Democrats in the House and Senate:

  • Days into the new Congress, the new House Democrat Majority changed the rules to make it easier to raise taxes on the American people.
  • Alexandria Ocasio Cortez (D-NY) has proposed a top income tax rate of 70 percent. Many others have suggested applying this rate to capital gains income.
  • House Speaker Nancy Pelosi (D-Calif.) has called for repeal of the entire GOP tax cuts. This would see 90 percent of wage earners face higher taxes, and a family of four earning $73,000 in annual income seeing a tax increase of roughly $2,000 per year.
  • Bernie Sanders has proposed over $16 trillion in higher taxes as part of his proposal for a government takeover of the American healthcare system.
  • Warren has called for a wealth tax which would force some Americans to hand over 3 percent of their wealth to the government every year.
  • Democrats rejected a proposal by Ways and Means Ranking Member Kevin Brady (R-Texas) to extend middle class tax relief.  This amendment would have made the $2,000 child tax credit (up from $1,000) and the $24,000 standard deduction for families (up from $12,000) permanent for American families.
  • House Majority Whip Jim Clyburn (D-SC) has proposed legislation that would raise the corporate rate in order to restore non-profit deductibility of fringe transportation benefits. While the bill proposes a modest rate hike to 21.03 percent, it would undermine the success of the GOP tax cuts and open the door to additional corporate rate hikes to pay for leftist spending priorities.
  • Senator Brian Schatz (D-HI) and Congressman Peter DeFazio (D-Ore.) have introduced legislation that would institute a financial transactions tax of 0.1 percent on the sale of any stocks, bonds, and derivatives.
     

Photo Credit: Marc Nozell


ATR Supports the Freedom for Families Act

Share on Facebook
Tweet this Story
Pin this Image

Posted by Tom Hebert on Wednesday, April 10th, 2019, 4:37 PM PERMALINK

Rep. Andy Biggs (R-Ariz.) has introduced the “Freedom for Families Act,” legislation that allows individuals or families to use funds from Health Savings Accounts (HSAs) to cover expenses during the birth or adoption of a child, as well as in the event of a serious family illness. Unlike most paid family leave proposals, this bill harnesses the free market to empower families to control their savings and leave. ATR supports this legislation and urges Members of Congress to co-sponsor this proposal.

H.R. 2163 allows families to use HSA dollars to pay for family leave regardless of their employment situation. Individuals that are qualified for federally-mandated leave, unpaid leave, or are currently unemployed can use HSA funds to pay for their leave. The bill also removes unnecessary restrictions on HSAs by increasing the annual contribution limit so families can exert more control over their savings. Under this bill, HSA contributions increase to $9,000 for individuals and $18,000 for joint filers. 

HSAs are vital for American families. They are used in conjunction with low premium, high-deductible health insurance plans and allow families to spend their own money on their own health needs. Since they were created 16 years ago, HSAs have become a popular vehicle toward promoting patient choice in health care and are today used by an estimated 25 million American families and individuals.

There are several advantages to using HSA funds to pay for leave. 

  • HSAs are portable, which allows individuals to carry funds from one job to the next without fear of losing their accrued benefits. 
  • There is no minimum period of employment to use these funds, and no need to pay them back once you’ve used them.
  • Contributions are completely voluntary, and completely customizable to the needs of families and individuals. 
  • Contributions can be made by the account holder, family members, or businesses alike. 
  • There is no need to borrow against retirement or delay retirement to take leave. 
     

Instead of embracing a top-down, one-size-fits-all approach to paid family leave that would impose onerous costs and federal mandates on American businesses, the Freedom for Families Act empowers families to control their savings and leave. Congress should pass this legislation, and President Trump should sign it into law. 

Photo Credit: Gage Skidmore


Dems Wrong to Target Stock Buybacks

Share on Facebook
Tweet this Story
Pin this Image

Posted by Tom Hebert on Tuesday, April 9th, 2019, 4:11 PM PERMALINK

Sen. Tammy Baldwin (D-Wis.) has introduced legislation that would restrict the right of companies to repurchase its shares on the open market, also known as stock buybacks.

Critics of stock buybacks claim that this repurchases come at the expense of investment in workers or the economy. In fact, by repurchasing shares, these companies are using excess capital to reinvest in themselves and create value for their shareholders.

Ending stock buybacks would harm economic growth. The economy is strong right now — between Q4 of 2017 and Q4 of 2018, GDP growth was 3.1 percent, dwarfing the anemic 1.8 percent average during the Obama administration. Nominal wages have grown by 3.4 percent over the last year, job openings sit at a record high of 7.6 million, and the unemployment rate is at 3.8 percent. Since Trump took office, the economy has added 5.1 million jobs, including nearly 400,000 in 2019 so far.

Restricting stock buybacks would also harm the 55 million workers that own a 401k and the 54 percent of Americans that own stocks. A recent floor speech by Sen. Pat Toomey (R-Pa.) highlights how stock buyback elimination would harm these workers:

“This idea would be very harmful to the people that it's presumably meant to help. You know about 40% of all equities in the U.S. are held in pension and retirement accounts. These are the accounts of teachers and cab drivers and truck drivers and folks who work at factories and do every other job that our economy depends on who put a little money away. It's in a 401k plan or it's in an IRA or it's in an employer-sponsored pension plan.”

Banning stock buybacks is a terrible idea that would have a cascade of negative effects to our economy. Sen. Baldwin and Senate Democrats should abandon this misguided legislation

Photo Credit: Lacy Landre- Flickr


Rep. Kevin Hern Praises Republican Tax Cuts

Share on Facebook
Tweet this Story
Pin this Image

Posted by Tom Hebert on Tuesday, April 9th, 2019, 4:00 PM PERMALINK

Congressman Kevin Hern (R-Oklahoma’s 1st District) addressed Americans for Tax Reform’s annual pre-Tax Day press conference, hosted by Grover Norquist.

Hern, a longtime business owner and job creator, talked about how the Tax Cuts and Jobs Act has been beneficial for his district.

“As a business owner and job creator for over 34 years, I know what burdensome tax policy looks like,” Hern said. “Since reform was passed, Oklahomans have seen a windfall of economic growth, wage increases, more jobs, better benefits, and the list goes on and on.

“In fact, we have a great example in our district — Tulsa-based QuikTrip is a very large 800-unit chain that has gas stations, convenience stores, and is constantly improving and innovating.

“They give all of the credit of their continued growth and all they’ve done for their employees, the bonuses they’ve given to their hourly employees, not to just their leadership, that they’ve given because of the Tax Cuts and Jobs Act. And there are many other examples around our district from that particular tax cut.”

Hern also touched on how the Republican tax law has driven prosperity around the country.

“You know, this was a crucial step in turning around our economy, and President Trump continued to push and push and he continues to push about growing our economy with pro-growth policies, and it’s a clear indicator of success and it’s working,” Hern said.

“We need to create more jobs, put Americans in those jobs, because that’s what drives our prosperity in this country – job creation, and putting Americans in those jobs.”

Hern drew a bright line between the tax and spend liberalism of the Democrat Party and the Republican tax cuts.

“Compared to our friends across the aisle who want to increase our rates to 70 percent, 90 percent, I don’t think anybody in this room or anybody in American wants to work and give 90 percent of their income to the federal government.

“In fact, it ought to be the opposite of that, and that’s why we’ve seen the great growth that we’ve seen and why we will continue to see it.”

Hern concluded his remarks with a call to make the tax cuts permanent, saying: “We’ve gotta continue our work, continue our job to make this permanent as we get beyond 2025.”

Read ATR’s extensive list of tax reform good news in Oklahoma here.


Rep. Adrian Smith Praises GOP Tax Law

Share on Facebook
Tweet this Story
Pin this Image

Posted by Tom Hebert on Tuesday, April 9th, 2019, 2:48 PM PERMALINK

Ways and Means Committee member Adrian Smith (R-Nebraska’s 3rd District) addressed Americans for Tax Reform’s annual pre-Tax Day press conference, hosted by Grover Norquist.

In his remarks, Smith highlighted the Republican tax law’s impact on economic growth and wages.

“We are seeing this economic growth in a way that’s substantive, it is meaningful, and workers are benefiting, our economy is expanding, and I think that’s good news in and of itself,” Smith said.

Smith also noted that the Tax Cuts and Jobs Act included important tax cuts on both the corporate and the individual side.

“And as we do sort through all of this, I think it’s important to note that even President Obama said we needed a lower corporate tax rate,” Smith said.

“But we Republicans were not going to pass a corporate tax cut and not give individuals tax relief as well. That’s why we doubled the standard deduction, that’s why we doubled the child tax credit, and really empowered workers.

“The whole bill created upward pressure on wages. That’s going to do far more for workers than a group of politicians thinking they can come up with new regulations.”

For more economic good news from Smith’s home state of Nebraska, click here.

 

Schweikert Praises Tax Cuts and Jobs Act

Share on Facebook
Tweet this Story
Pin this Image

Posted by Tom Hebert on Tuesday, April 9th, 2019, 1:42 PM PERMALINK

Ways and Means Committee member David Schweikert (R-Arizona’s 6th District) addressed Americans for Tax Reform’s annual pre-Tax Day press conference, hosted by Grover Norquist.

Norquist introduced Schweikert as “one of the guys who made the magic happen on tax reform.”

Schweikert highlighted the Tax Cuts and Jobs Act’s positive effects on the economy.

“In many ways, if you take a look at what’s going on, it’s a miracle mathematically,” Schweikert said at the press conference. “And you’d think our friends on the other side would actually embrace the joy of what’s going on in our society, where populations that were functionally written off as to be the permanent underclass, are not.

"Their employment numbers...are the fastest quartile with income growth, and I will argue with you that it is substantially because of the things we did in tax reform that are moving investment into the parts of our economy that actually increase productivity. Because you can’t pay people more if you don’t have a society that is becoming more productive.”

Schweikert also took aim at tax-hiking Democrats that spread disinformation about the Tax Cuts and Jobs Act.

“And remember, to the reporters that are here. I would love you to go back to just before tax reform was passed, and go back and grab the quotes from what our brothers and sisters on the left were saying was going to happen over the first 12 months in revenues,” Schweikert said.

“Go back and pull up the first five months in comparison [for FY 2018 and 2019], and you’ll see revenues are functionally identical. We did not hit Armageddon.”

Schweikert ended his remarks with a challenge to Congress and the press to put partisanship aside and look at the data.

“There’s good things happening out there, and it breaks my heart that in this hyper-partisan environment that we exist in, that there seems to be this inability in this body or even our press to take one step backwards and take a look at the baseline data and what’s going on and the really good things that are happening out there,” Schweikert said. 

Americans for Tax Reform has catalogued a list of good news arising from the tax cuts for Schweikert’s home state of Arizona, which you can find here.

Click here to watch Congressman Schweikert's remarks from today's press conference. 


The IRS Must Stop Harassing Taxpayers Over the Conservation Easement Deduction

Share on Facebook
Tweet this Story
Pin this Image

Posted by Alex Hendrie, Tom Hebert on Monday, April 8th, 2019, 9:00 AM PERMALINK

In 1976, Congress created a charitable deduction under section 170(h) of the tax code to encourage taxpayers to conserve their property for future generations. Congress has consistently reaffirmed this provision, known as the conservation easement deduction, in legislation over the past several decades.  

In recent years, the IRS has targeted taxpayers that claim the deduction. In a clear violation of Congressional intent, the agency has sought to make it more difficult for taxpayers to claim the deduction and has taken taxpayers to court over their use of this deduction.

While the IRS has a responsibility to go after bad actors, it is unacceptable for the agency to harass law-abiding taxpayers for claiming a deduction provided by Congress. Unfortunately, that is exactly what appears to be occurring.

Moving forward, policymakers should ensure that the deduction is being properly administered by the IRS and is being used to expand private conservation as intended by Congress. Congress should debate and consider reforms through regular order to ensure that the IRS is not subjecting taxpayers that are properly taking the deduction to undue scrutiny.

What is the Conservation Easement Deduction?

The conservation easement deduction has existed for decades and incentivizes property owners to conserve land and historic sites by offering a charitable deduction. 

In order to claim the deduction, the taxpayer must agree to restrict their right to develop or alter the property. Organizations known as land trusts agree to monitor the restrictions placed on the property. 

Essentially, the taxpayer agrees to have the land conserved for the benefit of future generations. The amount of the tax deduction is based on the value of what was donated – a value determined by an independent appraiser.

The taxpayer typically can deduct up to 50 percent of adjusted gross income (AGI) in any given year and carry forward any unused deductions for up to 15 years.  

Congress Has Consistently Reaffirmed Its Commitment to Easement Deductions

It is important to note that the conservation easement deduction has bipartisan Congressional support.

Congress initially codified the provision in 1976 and extended the provision in 1977. It was then made permanent in the Tax Treatment and Extension Act of 1980.

More recently, in 2006, Congress narrowed the definition of conservation easements. At the same time, Congress temporarily expanded the easement deduction to 50 percent of AGI. This expansion was routinely extended by Congress and made permanent in 2015.

The IRS is Targeting Taxpayers Over the Conservation Easement Deduction

Despite the long history of the conservation easement deduction, the IRS has recently taken aim at taxpayers subjecting them to burdensome new filing requirements and onerous costs. 

On December 23, 2016, the IRS published Notice 2017-10, making partnership donations of conservation easements “listed transactions,” which means the IRS suspects tax avoidance. This notice was implemented in the final days of the Obama administration without any opportunity for public comment.

The Notice ignores the fact that partnerships syndicated to multiple individuals are an extremely common form of financing real estate investments. As a result of the Notice, partnership conservation easement donations are being more heavily scrutinized, and taxpayers are exposed to a flurry of complex paperwork and compliance requirements. For instance, taxpayers wishing to claim an easement deduction covered by the Notice must now fill out Form 8886, a “Reportable Transaction Disclosure Statement.” This form takes approximately 20 hours to complete and has a top penalty of $100,000 for failing to properly complete it.  

Adding insult to injury, Notice 2017-10 was applied retroactively all the way back to tax year 2010, so the complexity and potential liability is significant. In fact, if an individual fails to comply with the new listed transaction disclosure requirements, they could be hit with penalties up to $100,000 with no reasonable cause exception. 

Notice 2017-10 does nothing to address the problem it identifies — overvaluation of the conservation easement. Instead of addressing potential overvaluation, the Notice just makes it harder for taxpayers to claim an easement deduction by burdening them with excessive paperwork and threat of audit. 

The IRS has also used Section 6695A of the code to constrain the use of easement deductions. Section 6695A attempts to ensure that appraisals are accurate and applies a penalty of 125% of the appraiser’s fee if the appraised value is 150 percent above the IRS’s determined value.

There are several issues with this penalty as it relates to easement deductions. The IRS now routinely asserts on audit that conservation easements have little or no value – no matter how carefully prepared. The unreasonable threat of the penalty has the unfortunate effect of deterring competent appraisers that would otherwise appraise conservation easements. In Colorado, for example, there are now only five appraisers who are willing to work on valuing conservation easements. The recent Department of Justice action seeking an injunction and disgorgement of all past income from one conservation easement appraiser (whose appraisals have been upheld in court) only adds to difficulties of taxpayers in finding a competent and willing appraiser.

In addition, the penalty inherently assumes a bad faith motive on the behalf of the appraiser. Two competent appraisers can have different opinions on the highest-use value of a donation while still acting in good faith.

The IRS is Hauling Taxpayers to Tax Court

The IRS is also taking taxpayers to court to deny conservation easement deductions by asserting that longstanding and common easement grant deed provisions violate the rules. The IRS is also routinely alleging (without the benefit of qualified appraisals) that conservation easement donations have little or no value and that taxpayer easement appraisals are inflated. While there is nothing inherently wrong with the IRS challenging taxpayers that may be abusing the law, the IRS should not be routinely challenging tax benefits that Congress has specifically provided, particularly when there is no evidence of abuse.

Under these cases, the burden of proof typically falls on the accused, not the accuser, flipping the entire notion of American justice on its head.

Reforms Are Needed, But Law-abiding Taxpayers Must Be Protected

To be clear, it is important that the conservation easement deduction is not abused by taxpayers. There are several simple fixes that would strengthen and protect the easement deduction from potential abuse. 

One possible solution is adding additional requirements specific to conservation easements to ensure the accuracy of appraisals by both taxpayers and the IRS.

Congress could also introduce more transparency into the process by requiring public disclosure of easement donations and the resulting benefits to the public.

These reforms would uphold the integrity of the conservation easement deduction while it remains in law for all taxpayers.

Photo Credit: Martin Haesemeyer


U.S. Economy Adds 196,000 Jobs in March

Share on Facebook
Tweet this Story
Pin this Image

Posted by Tom Hebert on Friday, April 5th, 2019, 9:35 AM PERMALINK

The Department of Labor’s March jobs report shows that the GOP tax cuts and regulatory relief are continuing to have positive effects on the U.S. economy.

The U.S. economy added 196,000 jobs in March. Year over year wage gains have continued to grow at 3.2 percent. March’s report shows that the economy has added approximately 525,000 jobs so far in 2019, and over 5.5 million jobs since President Trump took office.

The labor force participation rate is also holding strong at 63 percent. This is a stark contrast to the 40-year lows the labor force participation rate hit under the Obama Administration.

The healthcare industry saw 49,000 new jobs added in March, while professional and technical services added 27,000 new jobs. The construction industry also added 16,000 new jobs.

The March jobs report shows that the labor market is roaring back after a fluke jobs number in February. The new growth is yet another sign that the Republican Tax Cuts and Jobs Act is benefiting the working class with higher wages and more job opportunities.

Photo Credit: Gage Skidmore


Conservatives Oppose IPI at ATR Capitol Hill Briefing

Share on Facebook
Tweet this Story
Pin this Image

Posted by Tom Hebert on Tuesday, April 2nd, 2019, 6:01 PM PERMALINK

On Tuesday, Americans for Tax Reform held a Capitol Hill briefing on the Department of Health and Human Services (HHS) proposal to subject Medicare Part B drugs to an “International Pricing Index” (IPI).  

As ATR has written extensively, the IPI payment model will effectively import foreign price controls into the United States, lowering quality and access to lifesaving medicine. In November, ATR led a coalition of 56 conservative groups in opposition to the IPI.

ATR President Grover Norquist opened the panel by highlighting the effects of the proposal on trade, saying: “Under this rule, every time we win on trade, the administration would have to raise drug prices on Americans. This is a truly bad idea.”

FreedomWorks Director of Policy Patrick Hedger referenced his recent study, “Poison Pill: Importing Foreign Drug Price Controls,” to outline the potential illegality of HHS using the Center for Medicare and Medicaid Innovation (CMMI) to develop the IPI. Obamacare created the CMMI, which allows HHS to conduct pilot programs in order to reduce the cost of Medicare and Medicaid. While efforts to reduce entitlement spending should be applauded, CMMI is outside the appropriations progress and devoid of Congressional oversight, and is prone to be used as a tool to push broad policy changes, as the administration is proposing with the IPI.

(FreedomWorks Director of Policy Patrick Hedger)

Hedger highlighted HHS’ regulatory overreach in using CMMI to run a test case on over half of the country, stating that: “This far exceeds anything Congress intended CMMI to do under the statute.” Hedger also explained that price controls are bad policy.

Under a free market, prices are determined by supply and demand without government intervention. By artificially lowering the price of a good or service, the demand for that good automatically increases. The supplier cannot keep up with the new demand at the lower price, so scarcity occurs. In the prescription drug industry, scarcity could be a potentially fatal problem.  

Galen Institute President Grace-Marie Turner spoke on the IPI’s adverse effects on patient access to prescription drugs. Turner referenced a recent Galen Institute Study,“Examination of International Drug Pricing Policies in Selected Countries Shows Prevalent Government Control over Pricing and Restrictions on Access” by Galen Institute Senior Fellow Doug Badger, that compares availability of drugs in the U.S. versus countries with price controls. 

(Galen Institute President Grace-Marie Turner)

The study found that Americans have access to approximately 89 percent of total new drugs, while countries like Greece (access to 14 percent of new drugs) and Canada (access to 43 percent of new drugs) do not have the same access to lifesaving medicine that American patients enjoy.

Center for a Free Economy President Ryan Ellis gave broader context to the current healthcare debate, arguing that the IPI is a pillar of the left’s true goal: implementing Medicare for All. Ellis argued that conservatives need to stop acceding to the left’s healthcare demands and focus on market-driven policy changes that would reduce drug prices.


(Center for a Free Economy President Ryan Ellis)

Ellis referenced his recent op-ed, “The Republican Temptation to Cave on Medicare for All,” and cited three policies that conservatives should support: HHS’ rebate rule, streamlining the FDA’s drug approval process, and updating Hatch-Waxman to strengthen patents. Taken in concert, Ellis argued that these policies would stop the country’s gradual march towards Medicare for All.

The fact is, price controls do not work. The administration’s proposal to import price controls would harm patients, reduce access to life saving medicines, and opens the door to proposals that expand the federal government’s stranglehold over healthcare even further.


Pages

×