Tom Hebert

Georgia Middle Class Families Will Pay Higher Taxes If Warnock and Ossoff Win

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Posted by Tom Hebert on Tuesday, December 1st, 2020, 7:45 AM PERMALINK

If Raphael Warnock and Jon Ossoff are elected to the Senate by winning the January 5, 2021 runoff elections, they will rubber stamp the Biden-Harris agenda of higher taxes on the American people.

Joe Biden has promised  $4 trillion in new or higher taxes on the American people and has pledged to repeal the Trump- Republican Tax Cuts and Jobs Act “on day one.” This would raise taxes on middle class Americans all across the country – a family of four with the median annual income of $73,000 will see a tax hike of more than $2,058. 

This means that if Warnock and Ossoff win on January 5th, their first order of business will be to raise taxes on all Georgians by repealing the Tax Cuts and Jobs Act. 

Using IRS data from 2017 and 2018, ATR calculated the average decrease in tax liability for various income thresholds thanks to the Tax Cuts and Jobs Act. Families with AGI of between $50,000 and $100,000 saw a tax cut of roughly double that families with AGI of over $1 million received. The breakdown for Georgia is below: 

  • Taxpayers with AGI of between $25,000 and $49,999 saw their average tax liability drop from $2,553.19 in 2017 to $2,312.76 in 2018, a 9.4 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $50,000 and $74,999 saw their average tax liability drop from $5,459.71 in 2017 to $4,829.49 in 2018, a 11.5 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $75,000 and $99,999 saw their average tax liability drop from $8,803.29 in 2017 to $7,675.99 in 2018, a 12.8 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $100,000 and $200,000 saw their average tax liability drop from $17,824.57 in 2017 to $15,881.30 in 2018, a 10.9 percent reduction in federal tax liability.
  • Taxpayers with AGI of over $1 million saw their average tax liability drop from $786,363.64 in 2017 to $737,697.06 in 2018, a 6.2 percent reduction in federal tax liability.

Incumbent Republican Senators David Perdue and Kelly Loeffler have been consistent advocates of lower taxes and limited government. Sen. Perdue voted for the TCJA, which reduced taxes for Georgians across the board. While Sen. Loeffler was not in Congress at that time, she has consistently voiced support for lower taxes and has signed the Taxpayer Protection Pledge signer, a written commitment to her constituents to oppose any and all income tax increases.

The distinction is clear – Perdue and Loeffler will fight for low taxes and a strong economy while Ossoff and Warnock will vote for the Biden agenda of higher taxes on all Georgians and Americans across the country. 

Photo Credit: John Ramspott

Study Shows Expanding Unemployment Keeps Americans Out Of Work

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Posted by Tom Hebert on Tuesday, November 24th, 2020, 2:55 PM PERMALINK

Democrats are fighting to expand several unemployment programs into 2021, including reviving the Pelosi $600-per-week increase in unemployment payments that subsidized welfare over work. 

This could endanger the economic recovery, as past expansions of unemployment programs have resulted in more Americans out of work and decreased labor demand, according to a 2019 study from the New York Federal Reserve.

On the heels of the Great Recession, Congress extended unemployment benefits for 13 weeks on top of the normal 26 week duration in June 2008. After President Obama took office, Congress passed a number of additional expansions to unemployment, eventually topping out at 99 weeks of benefits. 

Analysts from the New York Federal Reserve estimated that the unemployment rate would have been 2.2 percentage points lower in 2011 and 3 percentage points lower in 2010 if Obama’s benefit expansion did not exist. This means that the disincentive to work the benefit expansion created kept approximately 4 million Americans out of a job during the slowest economic recovery in modern history.

The report also found that extended durations of unemployment payments have a negative impact on labor demand, as “...firms would expect to bargain with workers entitled to high benefits at all future dates.” 

Democrats are pushing to revive the CARES Act’s temporary $600-per-week federal pandemic unemployment compensation (FPUC) benefit. Before the FPUC expired in July, it created a situation in which 68 percent of Americans got paid more on unemployment than in the workplace. 

The subsidy of welfare over work will have lasting impacts on the economy that will only worsen if brought back. A recent study conducted by the Heritage Foundation found that the FPUC will reduce GDP by between $955 billion and $1.49 trillion. 

The economy is recovering strongly from the pandemic, and several promising COVID-19 vaccine candidates are on the horizon. Since the April pandemic-low, 12.1 million jobs have been recovered as businesses continue to reopen and Americans continue getting back to work. Since October, over half of the jobs lost to the Coronavirus pandemic have now been recovered, and unemployment has fallen from a record high 14.7 percent to 6.9 percent. 

While workers who have been displaced by the pandemic through no fault of their own deserve a safety net, history tells us that extending these programs will do more harm than good. As our economy continues to rebound, lawmakers must keep these facts in mind and reject policies that would prolong high unemployment rates and discourage Americans from safely re-entering the workforce.

Photo Credit: Gage Skidmore

Deutsche Bank Analyst Calls For Tax On “Privilege” of Working From Home

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Posted by Tom Hebert on Tuesday, November 17th, 2020, 2:24 PM PERMALINK

Millions of Americans across the country have been forced to self-isolate and work from home for months because of the Coronavirus pandemic. With new lockdowns being floated across the country, one Deutsche Bank analyst is now proposing to tax American workers for this “privilege.” 

Under the proposal, workers would be required to pay a 5 percent tax on their income for every day they work remotely. The analyst projects that this could raise $48 billion per year in the United States. 

The rationale for this tax? According to the Deutsche Bank analyst, Americans working remotely are basically mooching off society:

“…a big chunk of people have disconnected themselves from the face-to-face world yet are still living a full economic life. That means remote workers are contributing less to the infrastructure of the economy whilst still receiving its benefits.” 

The report argues that Americans being forced to work from home are seeing “direct financial savings on expenses such as travel, lunch, clothes, and cleaning,” so can afford paying a new tax. Other benefits of working from home cited by the report include “forgone socializing” and “greater job security.” 

This report assumes that Americans working from home are living in luxury. In reality, many Americans working from home have faced significant challenges through the pandemic including a reduction in work hours, uncertainty over the future of their employment and declining mental health due to the government-mandated lockdowns. In fact, according to the CDC, 40 percent of American adults surveyed in June reported struggling with mental health or substance abuse during the pandemic. 

In addition to the clear downsides of forced isolation, there are many problems with this tax. For one, it could dramatically increase complexity in the code.

The tax would put new burdens on small and large companies that would presumably have to track whether their employees worked from home on any given day. It would be difficult to track especially with workers that work part-time or half days.

The report suggests exempting self-employed and low-wage Americans, which could incentivize businesses to hire contractors or part-time workers over full-time employees.

Revenue generated from the tax is supposed to “support the mass of people who have been suddenly displaced by forces outside of their control.” While there should be a safety net for these Americans, the solution is not to tax those that still have their jobs. A work from home tax is nothing but an excuse to expand the size and scope of government.

While the work from home tax hike has so far not gained traction from the Left, it would fit neatly into the playbook of Bernie Sanders and Alexandria Ocasio-Cortez who have called for a $90 trillion Green New Deal, a $32 trillion Medicare for All, and a 70 percent income tax rate.

Joe Biden, Kamala Harris, and Democrat governors are considering new lockdowns, which would force millions of Americans back into isolation. Americans working from home have faced job insecurity, reduced hours, increased depression and anxiety, and declining mental health. A tax on the so-called “privilege” of working from home would exacerbate these negative side effects and add to this misery for millions of Americans.

Photo Credit: SalFalko

U.S. Economy Adds 638K Jobs In October As COVID-19 Recovery Continues

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Posted by Tom Hebert on Friday, November 6th, 2020, 12:28 PM PERMALINK

The economy is continuing to recover strongly from the Coronavirus pandemic, with 638,000 jobs added in October according to data released today by the Bureau of Labor Statistics. Since the April pandemic-low, 12.1 million jobs have been recovered as businesses continue to reopen and Americans continue getting back to work. Over half of the jobs lost to the Coronavirus pandemic have now been recovered, a sign that the pro-growth policies enacted by Republicans and President Trump have been successful. 

The unemployment rate fell to 6.9 percent, with the private sector adding 906,000 jobs in total. This outpaced overall employment gains due to 268,000 government jobs being lost. 

Despite the pandemic, this is a lower unemployment rate during the entirety of the Obama-Biden first term. At the same time in 2012, the Obama-Biden unemployment rate was 7.9 percent. 

The unemployment rate fell across the board for key demographics, falling to 10.8 percent for blacks, 7.6 percent for Asians, 8.8 percent for Hispanics, and 6.5 percent for women. Black employment increased by 433,000 alone, the second single largest increase on record. 

The October jobs numbers again beat industry expectations – economists surveyed by the Dow Jones projected a gain of 530,000 and an unemployment rate of 7.7 percent.

These strong jobs numbers come on the heels of other economic good news – the US economy grew by 7.4 percent in the third quarter of 2020, or 33.1 percent on an annualized basis – the fastest pace of GDP growth ever recorded.

The labor force participation rate increased 0.3 percent to 61.7 percent, and the number of Americans on temporary layoff fell by 1.4 million to 3.2 million. This measure is down significantly from a high of 18.1 million in April. 

These jobs gains came in some of the hardest-hit sectors of the economy, including 271,000 jobs added in the hospitality industry and 208,000 jobs added in professional and business services. Construction also added 84,000 jobs in October. 

While more work remains to be done, these strong economic indicators show that the Republican pro-growth agenda of tax cuts and regulatory relief is the way to recover from the pandemic. The fundamentals of the economy remain strong, and lawmakers should continue to enact pro-growth policies that will help the economy continue to recover. 

In stark contrast, Joe Biden wants to raise taxes on the American people by over $4 trillion and repeal the Tax Cuts and Jobs Act “on day one.”  In just six months, the economy has recovered 54 percent of jobs lost to the pandemic. It took the Obama-Biden administration 31 months to recover the same share of jobs lost during the 2008-2009 recession.  

As the U.S. economy turns the corner on the COVID-19 pandemic, Biden’s tax hikes will thwart our recovery and decimate our economy. 

Photo Credit: Gage Skidmore

Congress Should Pass The "Pandemic Preparedness, Response, and Recovery Act"

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Posted by Tom Hebert on Monday, September 28th, 2020, 11:15 AM PERMALINK

Senator James Lankford (R-Okla.) and Representative Virginia Foxx (R-N.C.) have introduced S. 4708/H.R.8038, the “Pandemic Preparedness, Response, and Recovery Act” (PPRRA), legislation that would provide a pathway toward identifying and repealing regulations that have hindered the ability of the country to respond to the Coronavirus pandemic. 

ATR supports this legislation and urges its swift passage. A coalition of ten conservative groups and activists led by FreedomWorks released a letter in support of the PPRRA, which you can view here

This legislation would establish a temporary bipartisan Congressional review commission that would analyze regulations to determine their efficacy. The Commission’s main focus will be on regulations that could impact our nation’s COVID-19 recovery or hinder our response to future pandemics, with special emphasis on those that create unnecessary paperwork or create red tape for smaller entities. 

The Commission can determine if a regulation should be amended, streamlined, or repealed entirely. Commission recommendations would then be given expedited review by both chambers of Congress. 

Similar commissions have been effective in taming bureaucratic bloat in the past. For example, the Base Realignment and Closure (BRAC) commissions have reined in redundant spending by closing certain post-Cold War Department of Defense military installations.  

The PPRRA resembles the “Regulatory Improvement Act,” legislation with broad bipartisan support that has been introduced in Congress every year since 2013. The RIA would establish a similar independent commission to comb through the Code of Federal Regulations to identify duplicative, unnecessary regulations that hamper economic activity. The Commission would then present its recommendations to Congress for a simple up or down vote. 

In the early days of the pandemic, excessive regulation on all levels of government hindered our nation’s COVID-19 response. Onerous certificate-of-need regulations led to a shortage of ICU beds at the state level, and FDA regulations initially restricted states from developing COVID-19 testing. 

Instead of consolidating more power in the federal government’s hands, President Trump and his administration have made regulatory relief a central part of the Coronavirus response. State and local governments have followed suit, leading to the waiver or suspension of nearly 850 rules and regulations nationwide. 

ATR has kept a running list of this deregulation, which you can view here

As our economy recovers from the immense damage the Coronavirus pandemic has caused, it is vitally important that burdensome red tape does not stand in the way of job creation or small business growth. Additionally, needless regulation should not stand in the way of our nation’s ability to respond to future pandemics or outbreaks. 

If implemented, the PPRRA will help advance future regulatory reform by providing a pathway to repeal regulations that were never needed in the first place. Congress should pass the PPRRA and President Trump should sign it into law. 

Photo Credit: Mark Fischer

RSC Framework Will Help American Workers Get Back To Work

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Posted by Tom Hebert on Wednesday, September 23rd, 2020, 9:45 AM PERMALINK

The Republican Study Committee’s American Worker Task Force has released a report called “Reclaiming the American Dream: Proposals to Empower The Workers of Today and Tomorrow.”

The framework, released by Task Force Chairman Rep. Andy Barr (R-Ky.) and RSC Chairman Rep. Mike Johnson (R-La.), contains 118 recommendations designed to empower the American worker as our economy turns the corner on the COVID-19 pandemic.

Here are five key proposals from the Task Force report that will help American workers and rebuild our economy.

Codifying Trump’s EO Allowing Americans with 401(k)s to Invest in Private Equity

The report recommends allowing American workers that utilize 401(k)s to invest in private equity, expanding investment options for millions of American families.

This proposal would codify President Trump’s June 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.

Expanding Tax-Advantaged 529 Savings Accounts

The Task Force recommends expanding popular tax-advantaged 529 education savings accounts to cover Pre-K, homeschooling expenses, additional education expenses, short term degree programs, job training programs, and other educational programs.

529 accounts allow parents to save and invest after-tax income for education costs. Any money earned through 529 investment is tax-free, making these plans a popular choice for parents looking to save for future education expenses.

529 plans are also popular with the middle class - in December 2019, total assets have reached an all-time high of $371.5 billion, and there a record 14.25 million 529 savings accounts in use today. The average account balance is also $26,054, another record high.

As students across the country are forced to learn from home due to government-mandated school closures, expanding 529 accounts is a commonsense move that will help millions of American families save and prepare for education expenses.

Creating Universal Savings Accounts

The Task Force advocates creating Universal Savings Accounts (USA), a tax-free savings account that can be used for expenditures of any kind.

Currently, there are approximately 15 tax-advantaged savings accounts that can be used for healthcare, education, and retirement. When used correctly, these accounts can drastically reduce the tax burden for individuals and families. Unfortunately, the complex requirements of how these accounts can be utilized causes many individuals to under-save.

USAs solve this problem by allowing individuals to save or invest a certain amount in tax-free accounts without limitations on how the money can be spent. By introducing a simple, streamlined saving account available for any expenditure, Americans will save more, be taxed less, and be able to better manage their finances.

Getting Able-Bodied Americans on Social Security Disability Insurance Back To Work

Welfare reform is a critical part of rebuilding our economy and getting able-bodied Americans back to work. Over the past two decades, enrollment in the Social Security Disability Insurance (SSDI) program has grown by 60 percent, and the Labor Force Participation Rate has plummeted to 63 percent.

To remedy this discrepancy and encourage Americans to reenter the workforce, the Task Force has several recommendations, including:

  • Establishing a flat benefit level, increasing benefits for low-income beneficiaries and decreasing them for the highest-income earners.
  • End double-dipping of SSDI and normal unemployment, which would prevent individuals from drawing benefits from both programs simultaneously.
  • Include unearned income in the definition of income, which would include all investment and passively earned income in the assessed income of potential applicants and beneficiaries.

Taken together with the numerous other SSDI reforms the Task Force proposes, these recommendations will remove disincentives to re-enter the workforce for Americans claiming SSDI.

Reforming the Supplemental Nutrition Assistance Program (SNAP)

Under current law, the Supplemental Nutrition Assistance Program (SNAP) disincentivizes work and keeps Americans from being self-reliant.

  • The Task Force recommends several steps to reform SNAP, including:
  • Eliminating waivers to locations where the average 24-month unemployment rate is 20 percent higher than the national average. These waivers unnecessarily separate a SNAP beneficiary from accessible labor markets.
  • Codifying Trump’s EO that establishes a nationwide metric for strengthening SNAP’s work requirements.
  • Enacting other reforms that would prevent individuals from receiving SNAP benefits without the requisite need.

Photo Credit: Lara Eakins

ATR Supports Sen. Cruz's "RECOVERY Act"

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Posted by Tom Hebert on Tuesday, September 15th, 2020, 10:15 AM PERMALINK

Senator Ted Cruz (R-Texas) has introduced “The Reinvigorating the Economy, Creating Opportunity for Every Vocation, Employer, Retiree, and Youth (RECOVERY) Act,” legislation designed to help the American economy continue recovering from the Coronavirus pandemic.

Here are several provisions that will help the economy recover and get Americans safely back to work. 

Tax credits for employee testing and personal protective equipment

The RECOVERY Act provides a $150 tax credit to businesses that test their employees for Coronavirus on a biweekly basis for the remainder of 2020. This tax credit provides a direct incentive for employers to implement robust testing programs that keep their employees safe. 

In addition, the Cruz bill establishes several tax credits designed to foster the conditions for businesses to safely reopen and operate. Employers can claim 50 percent of the cost of qualified expenses as a credit against applicable employment taxes on a quarterly basis.

Employers can claim a credit between $500 to $1,000 per employee depending on the size of their business. Qualified expenses include providing personal protective equipment for employees as well as reconfiguring and retrofitting workspaces. 

Right to Test Act and FDA reciprocity 

The RECOVERY Act includes the “Right to Test Act,” legislation that would allow states to approve and distribute Coronavirus tests as long as the state or federal government has declared a public health emergency. This would empower states to bypass FDA approval and drastically ramp up our testing capacity.

We already know what happens when Washington bureaucrats are in charge of developing and producing Coronavirus testing. The Center for Disease Control (CDC) took weeks to develop a Coronavirus test after the pandemic reached our borders, only to contaminate the first round of testing kits and completely botch the rollout. 

The RECOVERY Act also establishes a reciprocal marketing approval process for COVID-19 drugs, biological products, and medical devices. This bill allows the sale of COVID-19 treatments or cures in the United States that have not yet been approved by the FDA if the product has already been approved in other countries.

Product sponsors must meet several criteria in order to sell in the U.S. 

The FDA is notoriously slow at approving new drugs. On average, it takes 90.3 months for pharmaceuticals to go through the development and approval process, imposing immense R&D costs on manufacturers. In the middle of a global pandemic, we simply can’t afford to have the government slow things down more than they already do.

Liability protection for businesses 

The RECOVERY Act establishes a liability shield for businesses operating during the Coronavirus pandemic. 

This provision prevents businesses and/or individuals from being held liable in any Coronavirus exposure action unless the plaintiff can conclusively prove that: 

  • The businesses or individual were not making “reasonable efforts in light of all the circumstances” to comply with all applicable government standards at the time of the alleged exposure. 
  • The business or individual engaged in “gross negligence or willful misconduct” that caused the accidental exposure to COVID-19. 
  • The accidental exposure caused the plaintiff personal injury. 

As our economy begins to turn the corner on COVID-19, a liability protection for businesses that have acted in good faith to keep their customers and employees safe is absolutely crucial to getting Americans safely back to work. This provision prevents trial lawyers from cashing in on the crisis with predatory and abusive legislation. 

Payroll tax holiday for employers and employees

The RECOVERY Act temporarily suspends the payroll tax for employers and employees from the date of enactment through the end of 2020. This payroll tax holiday will lower the cost to businesses for hiring new employees, accelerating the reopening process and continuing to get Americans safely back to work.

This legislation builds on President Trump’s payroll tax executive order which deferred Social Security payroll taxes from September 1 to December 31, 2020.  This proposal makes the moratorium permanent so that taxpayers do not have to pay back payroll tax relief next year.

Ways and Means Republican Leader Kevin Brady (R-Texas) has introduced similar legislation in the House of Representatives. 

Indexing capital gains to inflation 

The RECOVERY Act ends the taxation of inflationary gains by indexing the calculation of capital gains taxes to inflation. Under current law, the capital gains tax fails to account for gains that are based on inflation. This unfairly exposes taxpayers to additional taxation. 

For example, an investor makes a capital investment of $1,000 in 2000 and sells that investment for $2,000 in 2017 will be taxed for a $1,000 gain at a top capital gains tax rate of 23.8 percent. After adjusting for inflation, the “true gain” is much lower – just $579. (1,000 in 2000 - $1,421 in 2017).

Ending the inflation tax would also benefit millions of middle class households. ATR looked at Internal Revenue Service data from 2017 (the most recent available data) to determine what percentage of middle class households had a capital gains filing:

  • 25,494,330 American households had a capital gains filing 
  • 13,730,710 (53%) made less than $100k 
  • 20,466,770 (80%) made less than $200k 

The breakdown for all 50 states is here

Full business expensing 

The RECOVERY Act would implement permanent full business expensing for qualified property. This would allow businesses to deduct the cost of new investments (machinery, equipment, etc.) in the year they are made. 

There are several benefits to this policy. First, it incentivizes new investment, leading to greater economic productivity, job growth and higher wages. Second, it 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, full expensing will help businesses make vital investments in the coming months and years as they seek to bring workers back, onshore manufacturing capabilities, and ramp up production.


The RECOVERY Act would enact the “REINS Act,” legislation that overhauls the regulatory process and strengthen Congressional oversight of agency rulemaking. 

The legislation also includes a provision that permanently repeals regulations that have been waived or suspended during the Coronavirus pandemic and creates a regulatory review commission for Congress to reinstate rules if they are truly needed. If for some reason the regulation is truly needed in order for agencies to function properly, Congress can reinstate the rule after recommendation from the commissions.

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 nationwide.

ATR has kept a running list of these waived regulations, which you can view here.

529 expansion 

The RECOVERY Act allows Americans to use 529s for K-12 expenses for students engaged in home learning including students enrolled in public, private, or religious school and students that are homeschooled through the end of 2022. 

529s are tax advantaged savings accounts that allow parents to save and invest after-tax income for education costs. Any money earned through 529 investment is tax-free, making these plans a popular choice for parents looking to save for future education expenses. 

Qualified expenses include curriculum materials, books, online educational materials, tutoring costs, fees for standardized testing, and expenses for students with disabilities.

The coronavirus pandemic has resulted in additional costs for American families stemming from the need to ensure schools openly safely and the implementation of online and distance learning. These new costs are exacerbated by the financial hardships that Americans are experiencing across the country due to a lost job, or reduction in work hours.

Expanding HSAs by enacting the Pandemic Healthcare Access Act 

The RECOVERY Act also includes Senator Cruz’s “Pandemic Healthcare Access Act,” legislation that would allow all healthcare plans to use Health Savings Accounts throughout the Coronavirus pandemic. 

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

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

Photo Credit: Gage Skidmore

ATR Supports Sen. Ernst's "End-of-Year Responsibility Act"

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Posted by Tom Hebert on Monday, September 14th, 2020, 9:00 AM PERMALINK

Americans for Tax Reform has released a letter in support of S. 1238, the "End-of-Year Fiscal Responsibility Act," legislation sponsored by Senator Joni Ernst (R-Iowa). S. 1238 caps the amount that federal agencies can spend in the final two months of the fiscal year.

If implemented, S. 1238 will save billions of dollars in taxpayer funds per year and bend Washington towards a path of fiscal restraint. 

ATR commends Senator Ernst for her leadership on fiscal restraint and urges all Senators to co-sponsor this legislation. 

Click here to read the full letter or see below: 

Dear Senator Ernst:  

I write in support of S. 1238, the “End-of-Year Fiscal Responsibility Act,” legislation that caps the amount that federal agencies can spend in the final two months of the fiscal year. If implemented, S. 1238 will save billions of dollars in taxpayer funds per year and bend Washington towards a path of fiscal responsibility.

Americans for Tax Reform commends you for your leadership on fiscal restraint and urges all members to co-sponsor this legislation.

Federal spending is completely out of control. Our national debt is $26 trillion and climbing. Congress has spent nearly $2.5 trillion this year in response to the Coronavirus pandemic, and Democrats want to spend trillions more.

Now more than ever, policymakers and bureaucrats alike have a duty to be responsible stewards of federal resources.

Currently, federal agencies are required to return any unused funding to the Treasury Department by the end of the fiscal year. While this seems like fiscally responsible policy, this system creates a perverse “use-it-or-lose-it” situation where agencies spend billions of dollars in the final two months of the fiscal year.

This is not a hypothetical scenario –during the final seven days of FY 2018, federal agencies spent a whopping $53 billion of taxpayer money on frivolous purchases unrelated to agency function. These purchases include $4.6 million on lobster tail and crab, $2.1 million on games and toys, $1.2 million on playgrounds, and $308,994 on alcohol.

To remedy this, S. 1238 limits an agency’s spending in the final two months of the fiscal year to the average amount the agency spent over the preceding ten months. This simple step will prevent bureaucrats from going on end-of-year spending binges to avoid sending money back to the Treasury.

Ultimately, the End-Of-Year Fiscal Responsibility Act is a commonsense piece of legislation that will save taxpayers billions of dollars in spending every year.


Grover Norquist
President, Americans for Tax Reform

Photo Credit: Gage Skidmore

Transparency Rule Should Be Improved To Better Benefit Consumers

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Posted by Alex Hendrie, Tom Hebert on Thursday, September 10th, 2020, 10:45 AM PERMALINK

The Trump Administration has pushed for healthcare transparency that benefits American patients and curbs the opacity of the health system.

To that end, the administration has proposed a rule on “Transparency in Coverage” that is designed to encourage healthcare insurers to be more transparent with patients regarding healthcare costs. 

While this push for healthcare transparency is laudable, components of this proposed rule could undermine efforts to lower healthcare costs for patients all across the country. Although transparency measures are often popular with the American people, it is important that they are not used to force businesses and individuals to give up sensitive information that does nothing to properly inform the public.

There are two central problems with this rule. First, the rule forces insurers to disclose negotiated rates to consumers, proprietary financial information that is integral to their business operations. This would do nothing to better inform consumers and could actually drive up costs by allowing third parties to leverage the proprietary information. Second, the rule mandates the creation of internet portals for consumer use, subjecting insurers to stringent government mandates and onerous regulations. A better approach would be to work with the private sector on increasing utilization of existing portals.

Overview of the Proposed Rule

In June 2019, President Trump issued Executive Order (EO) 13877 with the goal of empowering patients to choose the healthcare that is best for them. The EO directed several Departments to issue Advanced Notices of Proposed Rulemaking (ANPRM) to solicit comments from stakeholders on a proposal to require healthcare providers, health insurance issuers, and self-insured group health plans to provide patients with information about expected out-of-pocket costs before they receive care. 

In November, the Departments of Health and Human Services (HHS), Treasury, and Labor instead issued a Notice of Proposed Rulemaking (NPRM) on “Transparency in Coverage.” 

If implemented, the proposed rule would mandate commercial health plans to create an internet-based tool to supply patients with a cost estimate of their out-of-pocket expenses before they receive care from a provider. These internet portals would be subject to strict regulation by the Departments that issued the rule, and would likely impose hundreds of millions of dollars in regulatory costs on the healthcare system. 

The rule details seven elements that plans must disclose to healthcare consumers:

  1. Estimated cost-sharing liability: an estimate of the total out-of-pocket cost a patient is responsible for paying for a covered item or service under the terms of their healthcare plan or coverage.
  2. Accumulated amounts: the amount of financial responsibility the consumer has incurred up to the date of request for cost-sharing information.
  3. Negotiated rate: the contractually-agreed upon amount of money that providers accept as full payment for covered items or services.
  4. Out-of-network allowed amount: the maximum amount a provider would pay for an out-of-network item or service, including the consumer’s cost-sharing liability. 
  5. Items and services content list: for a service that is subject to a bundled payment arrangement, the issuer must display a list of covered items and services and the consumer’s cost-sharing liability for those services.
  6. Notice of prerequisite to coverage: if applicable, the issuer would indicate if a covered item or service is subject to a prerequisite for coverage, like concurrent review or prior authorization. 
  7. Disclosure notice: issuers must provide several disclosure notices, including ––
  • A statement indicating that consumers may be balance billed by out-of-network providers. 
  • A statement indicating that actual charges may be different than the cost-sharing estimate. 
  • A statement indicating other necessary disclaimers, like when the estimate expires or whether rebates or discounts impact prescription drug estimates.

While much of this information should be disclosed to consumers, a significant amount of it already is disclosed through existing tools developed by insurers. However, the disclosure of negotiated rates should not be disclosed as it forces businesses to release proprietary financial information that is of little use to patients but is akin to the intellectual property of insurers.

Disclosure of Negotiated Rates Is Meaningless to Consumers and Could Drive Up Costs for Patients and Families

Accessing negotiated rates is essentially meaningless for consumers because they do not reflect the out-of-pocket costs consumers pay. This requirement distracts from what is really important –– the direct cost to patients and overall quality of care. 

Deciphering negotiated rates would be difficult for even the most sophisticated healthcare consumer. Consumers would have to enter billing codes and other complex data into the government-mandated internet portals to access the negotiated rates that are useless to them in the first place. Patients and families have enough to deal with in trying times without having to decipher files that can only be read by machines. 

Instead of reducing costs, the proposed rule could have the opposite effect of driving healthcare costs up for consumers all across the country by forcing insurers to disclose negotiated rates for in-network services.

Negotiated rates are the proprietary financial information of the parties to the contract -- healthcare providers and insurers, so this proposed rule is akin to using government power to force companies to release their intellectual property to competitors. The biggest beneficiary of disclosing negotiated rates would be third parties and consultants, who could stand to receive a windfall using the proprietary financial information of healthcare plans to game the system and make profit.

This is not hypothetical -- in 2015, the Federal Trade Commission (FTC) looked at the impact that negotiated rate disclosure would have on patients and concluded that transparency can drive up prices. As the report notes:  

Too much transparency can harm competition in any industry, including health care. Typically, health care providers (hospitals, outpatient facilities, physician groups, or solo practitioners) compete against each other to be included on a health plan’s list of preferred providers. When networks are selective, providers are more likely to bid aggressively, offering lower prices to ensure their inclusion in the network. But when providers know who the other bidders are and what they have bid in the past, they may bid less aggressively, leading to higher overall prices.

Transparency in private markets isn’t just a problem that affects healthcare. In the 1990s, the Danish government forced manufacturers of ready-mix concrete to disclose their negotiated rates to consumers. The result? Concrete prices rose 15 to 20 percent. As companies realized what other bidders were charging for their product, they colluded to raise prices.

Ultimately, disclosure of negotiated rates undermines the ability of insurers and providers to deliver the best quality care to consumers at the lowest possible price. When negotiated rates are disclosed, the absence of selective networks discourages vigorous competition.

If the impetus for competition is gone, negotiated rate disclosure could even create a perverse incentive for collusion, which would drive up prices for patients. Any transparency proposal should not force disclosure of negotiated rates.

Internet-based tools fail to drive down costs 

The second issue with the proposed rule is that it forces insurers to create new internet portals subject to stringent government mandates and regulations. While consumers should be able to view data in a readily available way, insurers have already created similar internet portals, so this mandate is unnecessary and could force the creation of duplicative portals. 

In addition, this mandate could centralize control within the federal government and impose hundreds of millions of dollars in additional regulatory costs on the private sector.

If the administration wants to give consumers access to data, agencies could partner with the private sector to increase utilization of already created tools. However, private stakeholders should have the flexibility to design these tools free of government mandates.

Existing tools have done little to directly reduce healthcare costs for consumers, as noted by several studies. For instance, a 2016 JAMA study shows no correlation between online price transparency tools and reduced consumer healthcare spending. The study focused on two large U.S. employers representative of multiple market areas that offered employees an internet-based transparency tool. 

After adjusting for demographic effects and health characteristics, being offered the tool was associated with a $59 increase in mean out-of-pocket spending for patients. The study also found that employees were largely uninterested in using the tool, with only 10 percent using it at least once. 

A recent report from the Massachusetts Attorney General’s office backs up the JAMA study. The report advises policymakers to “temper expectations that consumer-driven health care price transparency tools will reduce overall health care cost growth.” The report also found that consumers use these tools relatively infrequently, and that consumers generally do not seek to hold plans to the estimates they receive. 

Clearly, the problem with online pricing tools is that they are not widely used, not whether they are widely available. Policymakers should focus on expanding utilization of price disclosure tools rather than creating new, duplicative government portals.


The Trump Administration’s focus on putting patients first is admirable. On the surface, encouraging more transparency in healthcare is a commonsense way to lower prices for patients. 

However, two concerning parts of the proposal could drive up healthcare costs for patients and impose massive burdens on insurers.  

Forcing insurers to disclose negotiated rates would make public proprietary information that is meaningless to patients, but very meaningful to consultants who could see significant financial benefit from being able to game the system.

In addition, stringent government requirements mandating creation of internet-based tools would place onerous burdens on insurers. Resources could be better spent ensuring that utilization of existing tools increase. 

While the intent of the proposed rule is laudable, changes should be made to the rule before proceeding with implementation. Moving forward, the administration should ensure transparency measures are targeted toward helping patients and reducing costs. 

Photo Credit: American Life League

Trump Economy Adds 1.4 Million Jobs As Coronavirus Recovery Continues

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Posted by Tom Hebert on Friday, September 4th, 2020, 10:49 AM PERMALINK

The economy is continuing to recover strongly from the Coronavirus pandemic, with 1.4 million jobs added in August as businesses continue to reopen. The Trump economy has now recovered nearly half of the jobs lost to the Coronavirus pandemic since March. 

The unemployment rate dropped nearly two percentage points from 10.4 percent to 8.4 percent, according to the August jobs data released today by the Bureau of Labor Statistics. 

The August jobs numbers again beat estimates, which projected 1.32 million jobs added and a 9.8 percent unemployment rate. The 8.4 percent unemployment rate is by far the lowest since the beginning of the pandemic. 

Job creation in May, June, July, and August has met or exceeded industry expectations. In those four months, job creation beat expectations by a combined 12.2 million jobs.  

The labor force participation rate increased slightly to 61.7 percent in August. The number of Americans on furlough also dropped by 7.1 million, and Americans on temporary layoff dropped by a third to 6.2 million. 

These gains include 249,000 retail jobs, 197,000 professional and business services, and 174,000 jobs in leisure and hospitality as bars and restaurants reopen. The economy also added 29,000 manufacturing jobs in August. 

While more work remains to be done, these strong economic indicators show that President Trump’s pro-growth agenda of tax cuts and regulatory relief are the way to recover from the pandemic. 

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