Obamacare: Taxpayers Must Report Personal Health ID Info to IRS
The new form will require disclosure of a taxpayer’s personal identifying health information in order to determine compliance with the Affordable Care Act’s individual mandate.
As confirmed by IRS testimony to the tax-writing House Committee on Ways and Means, “taxpayers will file their tax returns reporting their health insurance coverage, and/or making a payment”.
So why will the Obama IRS require your personal identifying health information?
Simply put, there is no way for the IRS to enforce Obamacare’s individual mandate without such an invasive reporting scheme. Every January, health insurance companies across America will send out tax documents to each insured individual. This tax document—a copy of which will be furnished to the IRS—must contain sufficient information for taxpayers to prove that they purchased qualifying health insurance under Obamacare.
This new tax information document must, at a minimum, contain: the name and health insurance identification number of the taxpayer; the name and tax identification number of the health insurance company; the number of months the taxpayer was covered by this insurance plan; and whether or not the plan was purchased in one of Obamacare’s “exchanges.”
This will involve millions of new tax documents landing in mailboxes across America every January, along with the usual raft of W-2s, 1099s, and 1098s. At tax time, the 140 million families who file a tax return will have to get acquainted with a brand new tax filing form. Six million of these families will end up paying Obamacare’s individual mandate non-compliance tax penalty.
As a service to the public, Americans for Tax Reform has released a projected version of this tax form to help families and tax specialists prepare for this additional filing requirement. Taxpayers may view the projected IRS form at www.ObamacareTaxForm.com. On the form, lines 3-4 show where taxpayers will disclose their personal health ID information.
View PDF here.
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Lou Barletta Signs the Taxpayer Protection Pledge
Former Congressman Lou Barletta has signed the Taxpayer Protection Pledge in his bid for the Republican nomination for Governor of Pennsylvania. The Pledge, sponsored by Americans for Tax Reform, commits signers to oppose any and all efforts to increase taxes.
Americans for Tax Reform offers the Pledge to all candidates for state and federal office. Thirteen governors and over 1,000 state legislators have signed the Pledge. Lou Barletta will join more than 30 of Pennsylvania’s state representatives in signing the Pledge this year.
Attorney General Josh Shapiro and other Democratic contenders for governor do not share Mr. Barletta’s commitment to a pro-growth tax regime. Since taking power in 2014, the incumbent Wolf administration has proposed or supported 14 different tax hikes on Pennsylvania families. The governor’s first proposal – a $4.6 billion tax increase – would have been the largest in state history, burdening a family of four with an additional $1,400 in annual taxes. This February, Democrats proposed another $6 billion in new taxes, including raising the state’s flat personal income tax by a prodigious 46%.
By signing the Taxpayer Protection Pledge, Lou Barletta promises to take Pennsylvania in a new direction and prioritize the well-being of working families over unnecessary state spending.
Before the state Convention, ATR will publish a more detailed evaluation of each Republican candidate’s record and positions on taxes and government spending.
“I want to congratulate Lou Barletta for taking the Taxpayer Protection Pledge. Pennsylvanians deserve better than tax-and-spend policies that fall hard on the backs of hardworking families and small businesses. They want real solutions that create jobs, cut government spending, and make Pennsylvania a more attractive place to live and raise a family,” said Grover Norquist, president of ATR.
“By signing the Pledge, Lou Barletta has demonstrated that he understands the problems of hard-working taxpayers in Pennsylvania.”
“Democratic candidates in Pennsylvania have made it clear they will continue to pursue a higher tax and spend agenda that grows government and increases the burden of state spending on taxpayers. This is nothing new for supporters of the Wolf administration, which pursued tens of billions in new taxes over two terms in office,” Norquist continued.
The taxpayer protection Pledge is a public, written, commitment by an elected official or candidate to the voters of his or her state. The pledge is a commitment to oppose and vote against any tax increase. All candidates for federal and state office are offered the pledge each election cycle since 1986.
Photo Credit: US House of Representatives
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Biden Wants IRS to Snoop on Your Bank Account: "Amounts that come into their bank accounts, and what amounts go out of their bank accounts."
President Biden wants to impose the largest tax increase since 1968 and hire 87,000 new IRS agents and auditors. He wants them to have automatic access to information about every Americans' bank account as well as every Paypal, Venmo, and CashApp account, even if you are not accused of wrongdoing.
The IRS would automatically obtain and store the data.
On Thursday Biden tried to justify the privacy invasion by saying it was just "two pieces of information."
What are the two pieces?
Biden said:
"The amounts that come into their bank accounts, and what amounts go out of their bank accounts."
Are you comforted?
If Democrats enact the plan, banks and third-party payment providers, like Venmo, PayPal, and CashApp would be required to report ALL account holders’ aggregate account outflows and inflows to the IRS.
The IRS will use these powers against Americans of all income levels. Requiring banks and third-party payment providers to report this kind of information is an indefensible invasion of privacy.
The mass collection of this bank account data will lead to many IRS fishing expeditions into the matters of innocent Americans. There are grave criminal justice ramifications to this proposal.
At a time when Americans are already struggling, these new reporting rules would create unnecessary burdens. As noted in this excerpt from Forbes:
It may create problems, however, that should be considered and addressed as this plan works its way through Congress. For example, consider a young couple saving up to buy a home. All savings are put into the “dream home” savings account. Then, when it comes time to make the down payment, the $50,000 dream home savings goes into the regular checking account, which is then wired to the seller’s escrow account. Buying a home is not a taxable event (at least for federal income tax), selling one is. Will the IRS receive information from the financial institutions that leads to an audit?
Paul Merski, vice president of congressional relations at Independent Community Bankers of America, voiced his criticism of the proposal:
Banks already report millions of transactions a day to the Financial Crimes Enforcement Network in the form of currency transaction reports, in addition to suspicious activity reports, which are required when potential illicit activity is detected by a bank. Banks are required to submit currency transaction reports when a deposit or withdrawal is $10,000 or more, a threshold that’s already very low, Merski said.
Merski said the proposal, as written, is akin to “sending your bank statement to the IRS every month,” which would be opposed by the banking industry because of the reporting burdens already required by federal regulators.
“The federal government can’t track all of that—any more requirements would be adding more hay to that haystack,” he said.
As also noted by the Wall Street Journal, the bank account snooping will give the IRS an "enormous" quantity of new data:
It would also create an enormous flow of information that the IRS would have to learn how to manage and use.
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Congress will have to weigh the potential burdens and privacy concerns against the revenue gains as it considers the plan.
The IRS has a long and poor and track record when it comes to safeguarding taxpayer information, so it won't be long before the private bank account information is shared with outside parties such as news organizations and progressive groups.
Photo Credit: Center for American Progress Action Fund
Ways and Means Dems Reject Commonsense Amendments to $3.5 Trillion Blowout
Democrats on the House Ways and Means Committee voted against numerous commonsense amendments introduced by Republican members throughout the four-day long markup of the $3.5 trillion tax and spend reconciliation plan.
If this legislation is signed into law, it will raise taxes on working families and small businesses. It will make America less globally competitive, increase the cost of goods and services, and eliminate jobs including high-paying manufacturing jobs.
Below are ten commonsense amendments that Democrats rejected.
1. Democrats voted against ensuring the corporate rate is competitive with China and the rest of the world. Specifically, they rejected Rep. Kevin Brady’s (R-Texas) “Build Back Better in America, not China” amendment which would have prevented several tax hikes that will put America at a competitive disadvantage with foreign competitors. Under the Democrats’ plan, the U.S. federal and state corporate tax rate would be 31 percent, significantly higher than China’s corporate tax rate is 25 percent and the OECD average rate in 23.5 percent.
2. Democrats voted in support of a tax break for well-funded, elite universities. Democrats voted against Rep. Tom Reed’s (R-N.Y.) “No Tax Shelters for Ivy League Elites” which would have prevented $2.5 billion loophole for wealthy Ivy League universities. This provision effectively rewards the institutions with the largest endowments.
3. Democrats opposed an amendment preventing a high global minimum tax on U.S. businesses before ensuring China enacts a minimum tax of its own. Rep. Devin Nunes’s (R-Calif.) "Stop Shipping Jobs to China" amendment would have prevented increasing taxes on the global intangible low-taxed income (GILTI) regime until China enacts a global minimum tax of its own. It also would have prevented the GILTI rate from being a rate higher than China’s.
4. Democrats voted against protecting Americans from being harassed and targeted by the IRS. Rep. Mike Kelly’s (R-Pa.) "Protecting Families and Small Businesses from a Supercharged IRS" amendment would have prevented the IRS from creating a new reporting regime that forces the disclosure of any business or personal account that exceeds $600. Not only would this include the bank, loan, and investment accounts of virtually every individual and business, but it would also include third-party providers like Venmo, CashApp, and PayPal.
5. Democrats voted in favor of reinstating tax shelters for blue-state millionaires instead of funding cancer research. Rep. Adrian Smith’s (R-Neb.) "Cancer Cures Instead of SALT Tax Shelters for Millionaires" amendment would have funded cancer research and extend middle-class tax cuts instead of reinstating the full SALT tax deduction for wealthy people in blue states, a $400 billion tax break that many Democrats want to include in the reconciliation bill.
6. Democrats voted in favor of a $96 billion tobacco & vaping tax hike that will hit low- and middle-income Americans. Rep. Drew Ferguson’s (R-Ga.) “Preserving Personal Choices” amendment would have prevented this $96 billion tax hike. Increasing tobacco taxes is a clear violation of President Biden’s pledge to not raise taxes on anyone making less than $400,000 a year.
7. Democrats refused to ensure that their tax increases wouldn't reduce U.S. employment and investment. Rep. Mike Kelly’s (R-Penn) “Return to Full Employment in America” amendment would have required the Treasury Secretary certify that Democrats’ tax increases won’t reduce U.S. employment and investment. Many of the tax hikes being pushed by Democrats will harm the economy. For instance, 70 percent of the corporate income tax is borne by workers through lower wages and less jobs, while increasing the capital gains rate will reduce investment and slow growth.
8. Democrats voted against ensuring their drug price controls wouldn't shift pharmaceutical investment and jobs to China. Rep. Darin LaHood’s (R-Ill.) "Standing Up to China" amendment would require H.R. 3, legislation to impose a 95% tax on medicines and foreign reference pricing wouldn’t shift medical innovation and manufacturing jobs to China. Nationwide, the pharmaceutical industry directly or indirectly accounts for over four million jobs across the U.S and in every state, according to research by TEconomy Partners, LLC. The average annual wage of a pharmaceutical worker in 2017 was $126,587, which is more than double the average private sector wage of $60,000.
9. Democrats refused to certify that new regulations and tax hikes on the energy sector wouldn't lead to increased oil and gas production by foreign competitors. Rep. Jodey Arrington’s (R-Texas) “No Giveaways to Polluting Countries” amendment would have required that the Treasury Secretary certify that Democrats' hikes on oil and gas would not reduce U.S. energy independence and increase oil and gas production in Russia, China, Venezuela, or Iran. The oil and gas industry supports 11.3 million total American jobs across all 50 states and accounts for nearly 8 percent of GDP. In 2017, jobs in the oil and gas sector paid an average salary of $102,000, 85 percent higher than the average private sector salary.
10. Democrats voted against keeping intellectual property and jobs in the United States. Rep. Kevin Hern’s (R-OK) “Offshore Tax Haven Reduction” amendment would have struck down the repeal of the deduction for foreign-derived intangible income (FDII). If this tax increase goes into effect, it will ship American intellectual property and jobs overseas, creating long-term economic damage to the country. It will undermine American competitiveness and benefit foreign countries like China that provide extensive and generous tax credits and subsidies to incentivize IP.
Photo Credit: "US Capitol Dome on an Overcast Evening" by John Brighenti licensed under CC BY 2.0
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Dems Set Biden Up to Break Tax Pledge
Congressional Democrats are pushing a series of tax increases that hit households making less than $400K, setting up President Biden to break his tax pledge.
Biden and Vice President Harris made the $400K tax pledge a key part of the 2020 presidential campaign, clearly stating the commitment at least 60 times.
Below is the video and written documentation of this promise:
Click here for the short version of the video with 13 examples of the pledge.
Click here for the full version of the video with every instance of the pledge.
Click here for a 45-second sizzle reel of the pledge.
The full written documentation of the pledge can be found below:
Joe Biden on CNBC, May 22, 2020: "Nobody making under 400,000 bucks would have their taxes raised. Period. Bingo."
Joe Biden on ABC News, August 23, 2020:
David Muir, ABC News: "So, no new taxes, $400,000 and down?"
Biden: "No new taxes. There would be no need for any."
Joe Biden in Kenosha, Wisconsin on September 3, 2020: "I pay for every single thing I’m proposing without raising your taxes one penny. If you make less than 400 grand, you’re not going to get a penny taxed."
Joe Biden during a WFLA Interview on September 15, 2020: “Nobody making less than $400,000 have to pay a penny more in tax under my proposals.”
Joe Biden during a Telemundo Interview on September 15, 2020: "I'm not going to raise taxes on anybody making less than 400,000.”
Joe Biden on Twitter, September 17, 2020: “If you make under $400,000, you will not pay a penny more in taxes when I'm president."
Joe Biden on Twitter, September 17, 2020: "No surprise, Donald Trump is lying about my tax plan. Here’s the truth about how I’ll make corporations pay their fair share while ensuring Americans making under $400,000 don’t pay a penny more."
Joe Biden in Hermantown, Minnesota on September 18, 2020 "And I’ll do it without raising anyone’s taxes if you make less than $400,000 a year."
Joe Biden in Manitowoc, Wisconsin on September 21, 2020: “Under my plan nobody making less than 400,000 bucks -- and I don’t make it and you don’t make it, I don’t think -- in this country will see their taxes go up.”
Joe Biden in Greensburg, Pennsylvania on September 30, 2020: “And we’re going to do it without asking anyone who makes under $400,000 a year to pay one more penny in taxes. Guaranteed. My word on it.”
Joe Biden in Jonestown, Pennsylvania on September 30, 2020: “We’re going to do it all without raising a penny in taxes for anybody who makes less than $400,000 a year.”
Joe Biden in Grand Rapids, Michigan on October 2, 2020: “Anyone making less than $400,000 a year won’t pay a penny more."
Joe Biden in Miami, Florida on October 5, 2020: “I’m not going to raise taxes on anyone who makes less than $400,000 a year. You won’t pay a penny more. I guarantee you.”
Kamala Harris during Vice Presidential Debate on October 7, 2020: “Joe Biden has been very clear. He will not raise taxes on anybody who makes less than $400,000 a year.”
Joe Biden on Twitter, October 7, 2020: “Let me be clear: A Biden-Harris Administration won't increase taxes by a dime on anyone making less than $400,000 a year.”
Joe Biden in Las Vegas, Nevada on October 9, 2020: “It’s not going to raise a penny in tax for anyone making less than $400,000 a year. Not a penny.”
Kamala Harris on Twitter, October 9, 2020: “Joe Biden has been very clear: he will not raise taxes on anybody who makes less than $400,000 a year.”
Joe Biden in Erie, Pennsylvania on October 10, 2020: “I’m not going to raise taxes on anybody making less than 400 grand.”
Joe Biden in Toledo, Ohio on October 12, 2020: “I’m not going to raise taxes on anyone who makes less than $400,000 a year."
Joe Biden in Pembroke Pines, Florida on October 13, 2020: “I’m not going to raise taxes on a single solitary American making less than $400,000 a year. You won’t pay a penny more. It’s a guarantee.”
Joe Biden on Twitter, October 15, 2020: “Let me be very clear: If you make under $400,000 you won’t pay a penny more in taxes under my administration.”
Joe Biden ABC Town Hall on October 15, 2020:
Anthony Archer (Voter): "Thank you, Mr. Vice President. You stated that anyone making less than $400,000 will not see one single penny of their taxes raised."
Biden: "That’s right."
Joe Biden in Michigan on October 16, 2020: “No one who makes less than $400,000 a year will pay a penny more.”
Kamala Harris in Orlando, Florida on October 19, 2020: “Joe Biden will not increase taxes on anyone who makes less than $400,000 a year, period.”
Kamala Harris in Jacksonville, Florida on October 19, 2020: “Taxes will not be raised on anyone making less than $400,000 a year.”
Kamala Harris in Milwaukee, Wisconsin on October 20, 2020: “We will not increase taxes for anybody making under $400,000 a year.”
Kamala Harris in Asheville, North Carolina on October 21, 2020: “Joe Biden is saying, I’m not going to raise taxes on anybody who makes less than $400,000 a year.”
Kamala Harris in Atlanta, Georgia on October 23, 2020: “Which is why Joe Biden and I are saying, “One, taxes will not be raised on anyone making less than $400,000 a year.”
Joe Biden in Bucks County, Pennsylvania on October 24, 2020: “None of you will have your taxes raised. Anyone making less than $400,000 will not see a penny in taxes raised."
Joe Biden on CBS 60 Minutes, October 25, 2020:
Biden: “Nobody making less than $400,000 will pay a penny more in tax under my proposal.”
Norah O'Donnell, CBS: "That's a promise?"
Biden: "That's a guarantee. A promise. I give you my word as a Biden. That's an absolute guarantee."
Joe Biden in Atlanta, Georgia on October 27, 2020: “I guarantee you -- no matter what you hear this president lying about -- no one making less than $400,000 a year will have one penny in taxes raised. Not one penny. It’s a guarantee.”
Kamala Harris in Reno, Nevada on October 27, 2020: "Joe Biden says we’re not going to increase taxes on anyone making less than $400,000 a year."
Kamala Harris in Las Vegas, Nevada on October 27, 2020: “Joe Biden says, that we’re not going to raise taxes on anyone making less than $400,000 a year."
Joe Biden in Atlanta, Georgia on October 27, 2020: “No one making less than $400,000 a year will have one penny in taxes raised. Not one penny. It's a guarantee.”
Kamala Harris in Phoenix, Arizona on October 28, 2020: “We are not going to raise taxes on anyone making under $400,000 a year."
Kamala Harris in Tucson, Arizona on October 28, 2020: “Joe Biden who says, 'You want to deal with the economy, then one, we will not raise taxes on anyone making less than $400,000 a year.'"
Joe Biden in Broward County, Florida on October 29, 2020: “We can do it without raising taxes on a single person making less than 400,000 bucks a year.”
Joe Biden in Tampa Bay, Florida on October 29, 2020: “I guarantee you -- my word as a Biden -- no one making less than $400,000 will pay a single penny more in taxes. Not a penny.”
Kamala Harris in Fort Worth, Texas on October 30, 2020: “Joe Biden is committed to not raising taxes ever on anyone making less than $400,000 a year.”
Joe Biden in Des Moines, Iowa on October 30, 2020: “We can do it without raising a penny tax on the middle class. I guarantee you -- give you my word as a Biden -- no one making less than $400,000 a year will see a penny in their taxes raised, no one.”
Kamala Harris in McAllen, Texas on October 30, 2020: “Let’s deal with the economy and not raise taxes for anyone who makes less than $400,000.”
Joe Biden in St. Paul, Minnesota on October 30, 2020: “I promise you, you have my word, if you make less than $400,000 a year, you won’t pay a penny more in taxes.”
Joe Biden in Milwaukee, Wisconsin on October 30, 2020: “I give you my word as a Biden, if you make less than $400,000 -- if I’m elected president -- you’re not going to see a penny of your taxes go up, not a penny.”
Kamala Harris in Houston, Texas on October 30, 2020: “Joe Biden says we will not raise taxes on anyone that makes less than $400,000 a year.”
Kamala Harris in Fort Worth, Texas on October 30, 2020: “Which is why Joe Biden is committed to not raising taxes ever on anyone making less than $400,000 a year.”
Joe Biden in Detroit, Michigan on October 31, 2020: “Under my plan if you make less than $400,000 I guarantee you're not going to pay a penny more in taxes.”
Joe Biden in Flint, Michigan on October 31, 2020: “Under my plan, if you make less than $400,000 a year, you’re not going to pay a penny in additional taxes.”
Joe Biden on Twitter, November 1, 2020: "Under my tax plan, no one making under $400,000 will see their taxes go up."
Joe Biden in Cleveland, Ohio on November 2, 2020: “Under my plan, if you make less than $400,000, you won’t pay a single penny more in taxes. You have my word on it.”
Joe Biden in Beaver County, Pennsylvania on November 2, 2020: “We’re not going to raise taxes on anybody making less than 400,000 bucks a year.”
Joe Biden in Pittsburgh, Pennsylvania on November 2, 2020: "Under my plan I commit to you no one making less than 400 grand is going to see a penny in taxes raised."
Kamala Harris in Pittsburgh, Pennsylvania on November 2, 2020: “Let me be clear, Joe and I will not increase taxes on anyone making under $400,000 a year, period.”
Joe Biden in Pittsburgh, Pennsylvania on November 2, 2020: “Under my plan, as Kamala said, if you make less than 400,000 bucks, you’re not going to pay a penny more in taxes.”
Kamala Harris in Detroit, Michigan on November 3, 2020: “That’s why Joe says we’re not passing any taxes on anybody making less than $400,000 a year."
Kamala Harris on Twitter, November 11, 2020: “As president, @JoeBiden will make corporations and the wealthiest finally pay their fair share—and he won’t ask a single person making under $400,000 per year to pay a penny more in taxes."
Kamala Harris on Twitter, November 21, 2020: “Let’s be clear: if you make under $400,000 a year, you won’t pay a penny more in taxes under a Biden-Harris administration.”
Joe Biden during an ABC News interview on March 16, 2021: "If you make more than -- less than $400,000, you won't see a fed -- one single penny in additional federal tax."
Joe Biden during remarks in Washington, D.C. on April 2, 2021: "And it won’t raise a penny tax on a family making less than $400,000 a year — no federal tax, no addition."
Joe Biden during remarks in Washington, D.C. on April 7, 2021: "I will not impose any tax increases on people making less than $400,000 a year."
Joe Biden during a speech in Washington, D.C. on April 28, 2021: "I will not impose any tax increases on people making less than $400,000 a year.
Joe Biden during a speech in Portsmouth, Virginia on May 3, 2021: "The reason I’m bothering to do this is I keep hearing out in the press, 'Biden is going to raise your taxes.' Anybody making less than $400,000 a year will not pay a single penny in taxes."
Photo Credit: By Gage Skidmore licensed under CC BY-SA 2.0
9 Facts About The Democrats $96 Billion Tobacco & Vaping Tax Grab
- Congressional Democrats plan to double the Federal Tobacco Tax – a clear violation of President Biden’s pledge to not raise taxes on anyone earning under $400,000
- This will disproportionately harm the poorest Americans and increase income inequalities: 72% of smokers are low-income earners. In some states poorer smokers already spend one quarter of their income on tobacco
- Tobacco Tax hikes have been shown to do nothing to reduce smoking rates
- Tobacco tax hikes have been proven to lead to more smuggling by international criminal syndicates, often with terrorist links, which the State Department calls “a threat to national security”
- Democrats also plan to increases taxes on people trying to quit smoking though e-cigarettes, smokeless tobacco, heated tobacco, or nicotine pouches by thousands of percent, in some cases by thousands of percent.
- New taxes will be imposed on products authorized by the FDA to be marketed as putting people “at a lower risk of mouth cancer, heart disease, lung cancer, stroke, emphysema, and chronic bronchitis” and "help addicted adult smokers transition away from combusted cigarettes and reduce their exposure to harmful chemicals".
- A new vaping tax would make some e-cigarettes more expensive than combustible tobacco – despite them being 95% safer and recommended by over 50 of the world’s leading medical bodies.
- A large-scale analysis from the US’s top cancer researchers coordinated by Georgetown University Medical Center found that 6.6 million American lives can be saved if a majority of cigarette smokers switched to vaping.
- Academic modelling has shown that the vaping tax will lead to more than 2.75 million additional American smokers
Photo Credit: Judy Gallager
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Dem Bill Gives Tax Cuts to Reporters at "Local Newspapers" With Up to 750 Employees
Congressional Democrats have proposed a tax credit for "local news journalists" at newspapers with up to 750 employees. Yes, a special tax cut for reporters.
The Democrats' multi-trillion-dollar tax and spend plan contains an employment tax credit of up to $12,500 per person for reporters at “eligible” newspapers. As a section-by-section analysis from the Ways and Means Committee details:
“The credit amount is equal to 50% of wages for each of the first 4 calendar quarters, and 30% of wages for each calendar quarter thereafter. Eligible local newspaper publisher is any employer that is in the trade or business of publishing a local newspaper that serves the needs of a regional or local community and who employs no more than 750 employees.”
This special reporter tax carve-out would amount to $1.3 billion. Beneficiaries would likely include many established daily newspapers and left-leaning alternative weeklies, and such papers as The Malibu Times, Aspen Times and the Vineyard Gazette serving the progressive playground of Martha’s Vineyard.
The bill also provides a $1,500 tax credit for the purchase of an "e-bike" costing up to $8,000. So if you are a "local" journalist in the market for an e-bike, your ship has come in.
Photo Credit: "Journalist with pipe" by C.A.D.Schjelderup licensed under CC BY-SA 4.0
Study: Democrats’ $3.5 Trillion Bill Will Lead to Up To 324 Fewer New Medicines
Democrats’ drug price controls in the $3.5 trillion blowout would lead to 167 to 324 fewer new drugs, according to an issue brief by Tomas J. Philipson and Troy Durie at the University of Chicago.
Within their $3.5 trillion reconciliation package, Democrats have included H.R. 3, legislation that government price controls on American medical innovation. Specifically, it creates a 95 percent excise tax on manufacturers and imposes an international reference pricing scheme that directly imports foreign price controls into the United States.
According to Philipson and Durie’s brief, this provision would lead to a 29.2 to 60 percent reduction in R&D spending, which translates to 167 to 324 fewer new drug approvals:
“We calibrate that the price controls implemented in the United States would lead to a 29.2 to 60.0 percent reduction in R&D from 2021 to 2039. This equates to $952.2 billion to $2.0 trillion in lost R&D spending and 167 to 342 fewer new drug approvals during this period. This means annual new drug approvals will be 11.7 to 24.0 percent lower per year from 2021 to 2029 and 45.0 to 92.4 percent lower from 2030 to 2039.”
Though these estimates are significantly higher than the CBO’s, the authors explain that their estimate is conservative:
“We discuss how these findings, as well as findings from other studies, differ from CBO (2019), which finds only 37 fewer new drug approvals over this time period, which is 550.2 to 1,024 percent lower than our estimates. Our estimates are conservative as the entire evidence base is considered and not only the evidence base for the more R&D sensitive US market.”
These results are severe, but not surprising. H.R. 3 arbitrarily sets the prices of medicines based off the prices in six countries which utilize socialist price controls in their healthcare systems: Australia, Canada, the United Kingdom, France, Germany, and Japan.
These countries’ access to care is, inevitably, lower. For instance, Canadian patients wait an average of 19.8 weeks from referral to treatment. In the UK, at any one time, 4.5 million patients were waiting to see a doctor or receive care. By comparison, 77 percent of Americans are treated within four weeks of referral, while just 6 percent wait more than two months.
Further, Americans have access to far more medicines than other countries. According to research by the Galen Institute, 290 new medical substances were launched worldwide between 2011 and 2018. The U.S. had access to 90 percent of these cures. By comparison, the United Kingdom had access to 60 percent of medicines, Japan had 50 percent, and Canada had just 44 percent.
In trying to be more like foreign countries with socialist policies, Democrats will restrict Americans’ access to life-improving and life-saving medicines. Hundreds of new cures will not be developed in the future which will harm American patients and the healthcare system.
Photo Credit: "Medicine" by The Focal Project is licensed under CC BY-NC 2.0
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More States Are Reducing Barriers To Employment
Over the past two years, lawmakers in various state capitals have enacted a new reform that will make occupational licensing requirements less of a barrier to employment. This new reform is known as universal license recognition (ULR). Arizona began this reform movement when it passed its ULR law in 2019. As of now, at least sixteen states have enacted it, the most recent being Mississippi in March (while four of these 16 laws had been on the books prior to 2019, this reform movement took off in earnest after the passage of the Arizona bill in 2019).
What are ULR laws? They are laws by which states recognize occupational licenses granted by other states. This means that if a worker in a licensed occupation moves to a new state that has passed universal recognition legislation, they can get to work right away. This gives workers greater flexibility and makes states with a ULR law more attractive to new residents.
ULR laws in various states tend to be similar, but not identical. According to Iris Hentze at the National Conference of State Legislatures, two of the most common requirements for recognition are “being licensed and in good standing with your home licensing board” and that the applicants “pay applicable fees and...undergo background checks.” While workers will need to eventually get a new license for the state they’ve moved to, in the 16 states with ULR laws “the process is shorter for licensed workers than it is for those seeking a license for the first time.”
One of the most significant differences between different ULR laws is whether they require “substantial equivalence” or “scope of practice” for recognition. According to Hentze at NCSL, states using “substantial equivalence” require that “that the license an applicant holds in his or her home jurisdiction be substantially equivalent to or exceed its own requirements” to have their license recognized in their new state of residence.
States using “scope of practice” on the other hand require the applicant to be “currently licensed or certified by another state to work in an occupation with a similar scope of practice”. According to the America Legislative Exchange Council (ALEC), scope of practice is “a more direct comparison of whether a license is to perform the same day-to-day duties of the job itself.”
According to the Goldwater Institute, since “Arizona became the first state to enact universal recognition,” it has so far helped 3,000 professionals get to work in Arizona.
The push for universal license recognition was further spurred on when the COVID-19 pandemic showed how licensing requirements stifle worker mobility, particularly when additional healthcare workers were needed in some states more than others. According to ALEC, to meet demand “states like New York...issued temporary executive orders recognizing licenses for out-of-state healthcare workers.”
Since then, several more states have passed Universal Recognition laws, bringing the total to sixteen. Lawmakers in other states have introduced ULR that did not pass in 2021, but can be considered in future legislative session. According to the Goldwater Institute’s Heather Curry, “this session, more than 15 states have introduced legislation to extend out-of-state license recognition to skilled professionals.”
In a few short years, we’ve gone from zero to 16 states with ULR laws, four of them enacted in 2021 alone, with still more debating similar measures. This idea is catching on, as more and more states realize that letting workers do their jobs with minimal hindrance brings plenty of benefits and few, if any, costs.
Photo Credit: "Utility Worker" by Dori is licensed under CC BY-SA 3.0.
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Norquist and Kudlow Discuss the Harms of Dem $3.5 Trillion Tax-and-Spend Blowout
ATR President Grover Norquist was guest on Fox Business Network's Kudlow show today for a discussion of the $3.5 trillion reconciliation bill being pushed by congressional Democrats.
Norquist noted that the burden of the proposed corporate tax rate increase will fall on workers:
"The American people get that when you have higher corporate taxes, that is largely paid for by lower wages and lower wage increases in the future. It is also paid for in higher prices and in less competitive production in the United States compared to China or Europe."
Kudlow also played a portion of ATR's upcoming television ad, pointing out the problems with the enormous tax and spending proposal.
VIDEO: JCT Confirms Dem Corporate Tax Hike Hits Workers
Today the Joint Committee on Taxation confirmed that corporate tax rate hikes diminish the wages of workers. Testifying before the House Ways & Means Committee, JCT Chief of Staff Thomas A. Barthold said:
"Literature suggests that 25% of the burden of the corporate tax may be borne by labor in terms of diminished wage growth."
Congressman Mike Kelly (R-Pa.) then asked, "Who is going to bear the brunt of this [Democrat corporate income tax hike]?
Barthold replied:
"Labor. Laborers."
Economists across the political spectrum agree that workers bear the brunt of corporate tax increases. And 25% is on the very low end.
According to the Stephen Entin of the Tax Foundation, labor (or workers) bear an estimated 70 percent of the corporate income tax:
"Over the last few decades, economists have used empirical studies to estimate the degree to which the corporate tax falls on labor and capital, in part by noting an inverse correlation between corporate taxes and wages and employment. These studies appear to show that labor bears between 50 percent and 100 percent of the burden of the corporate income tax, with 70 percent or higher the most likely outcome."
A 2012 paper at the University of Warwick and University of Oxford found that a $1 increase in the corporate tax reduces wages by 92 cents in the long term. This study was conducted by Wiji Arulampalam, Michael P. Devereux, and Giorgia Maffini and studied over 55,000 businesses located in nine European countries over the period 1996-2003:
"We identify this direct shifting through cross-company variation in tax liabilities, conditional on value added per employee. Our central estimate is that $1 of additional tax reduces wages by 92 cents in the long run. The incidence of a $1 fall in value added is smaller, consistent with our wage bargaining model."
A 2015 study by Kevin Hassett and Aparna Mathur found that a 1 percent increase in corporate tax rates leads to a 0.5 percent decrease in wage rates. The study analyses 66 countries over 25 years and concludes that workers could see a greater reduction in wages than the federal government raises in new revenue from a corporate income tax increase:
"We find, controlling for other macroeconomic variables, that wages are significantly responsive to corporate taxation. Higher corporate tax rates depress wages. Using spatial modelling techniques, we also find that tax characteristics of neighbouring countries, whether geographic or economic, have a significant effect on domestic wages."
A 2006 study by William Randolph of the Congressional Budget Office found that 74% of the corporate tax is borne by domestic labor:
"Burdens are measured in a numerical example by substituting factor shares and output shares that are reasonable for the U.S. economy. Given those values, domestic labor bears slightly more than 70 percent of the burden of the corporate income tax."
A 2007 study by Alison Felix estimated that a 1 percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. She concluded that the wage reductions are over four times the amount of collected corporate tax revenue:
"The empirical results presented here suggest that the incidence of corporate taxation is more than fully borne by labor. I estimate that a one percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. The magnitude of the results predicts that the decrease in wages is more than four times the amount of the corporate tax revenue collected."
A 2012 Harvard Business Review piece by Mihir A. Desai notes that raising the corporate tax lands “straight on the back” of the American worker and will see a decline in real wages:
"Because capital is mobile, high tax rates divert investment away from the U.S. corporate sector and toward housing, noncorporate business sectors, and foreign countries. American workers need that capital to become more productive. When it’s invested elsewhere, real wages decline, and if product prices are set globally, there is no place for the corporate tax to land but straight on the back of the least-mobile factor in this setting: the American worker."
Even the left-of-center Tax Policy Center estimates that 20 percent of the burden of the corporate income tax is borne by labor:
"In calculating distributional effects, the Urban-Brookings Tax Policy Center (TPC) assumes investment returns (dividends, interest, capital gains, etc.) bear 80 percent of the burden, with wages and other labor income carrying the remaining 20 percent."
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