Three bills were marked up in the House Ways and Means Committee this week. The bills – H.R. 3936, the Tax Cuts for Working Families Act, H.R. 3937, the Small Business Jobs Act, and H.R. 3938, the Build it in America Act – will promote a more efficient tax code, relief for small businesses, and more American innovation. In 2017, the Tax Cuts and Jobs Act (TCJA) raised the standard tax deduction from $6,500 to $12,000 for single filers and from $13,000 to $24,000 for married couples filing jointly. Plainly and simply, American families got to keep more of their hard-earned paychecks by exempting a greater amount of their income from taxes. This also added a much-needed level of simplicity to the tax code. Thankfully, H.R. 3936 doubles down on this successful approach to simplify taxes. The legislation would add a bonus “guaranteed deduction” of an extra $4,000 for couples, $3,000 for heads of household, and $2,000 for all other filers. H.R. 3937 builds on this simplicity by repealing the Biden administration’s misguided 1099-K reporting rule. This rule required companies like Venmo, CashApp, and PayPal to report any transactions by a user that amount to over $600. The previous standard was well above this, sitting at $20,000 to require a 1099-K. Lastly, H.R. 3938 provides a boost to the economic engine by extending expiring and already-expired provisions of the TCJA through 2025. This bill restores expensing for research and development costs, which decreases the risk of investing in the American economy and will incentivize innovators. It also has a host of other provisions relating to expenses that will give American businesses a break when it comes to investing in themselves.  Three good bills to bring more tax relief to everybody. 
 
 
Don’t Import Europe’s Carbon Tax
 
Republicans and Democrats are considering implementing a carbon border adjustment mechanism, a charge on imports calculated from the carbon consumed in their manufacture. In doing so, they are preparing to wed one of the oldest economy-killing fads to a much newer one. Sens. Chris Coons (D-DE) and Kevin Cramer (R-ND) last week introduced legislation that would likely, as Coons suggested, “lay the scientific foundation for moving forward with a carbon border adjustment.” The policy essentially unites protectionism and environmentalism, appealing to Republicans’ rediscovered antipathy toward free trade and satisfying Democrats’ environmental itch by making the import and consumption of goods from foreign lands with less stringent environmental standards costlier. What’s more, it would incentivize foreign manufacturing companies to green up their business practices. An American CBAM would itself be an import, as the European Parliament and European Council approved one of their own in May. The European Union hopes to fortify its Emissions Trading System, a cap-and-trade system through which European firms purchase carbon-use authorizations, against corporate efforts to dodge ETS charges by offshoring production.
 
A CBAM, like any other tax or tariff, raises the price of covered goods. The economics are simple. When the seller’s costs increase, he or she relays some, or all, of that increase to the consumer. Moreover, protectionist policies such as this one warp industry’s economic incentives, encouraging firms to evade duties at the cost of operational efficiency. This inflates prices further. Tariffs also invite policy retributions from put-upon trading partners. America’s recent protectionist bungling serves as a case study. For example, one round of tariffs introduced against China in 2019 cost the typical American household $831 annually, according to projections by the Federal Reserve Bank of New York. Another Fed report, published in May 2020, suggested the recent U.S.-China trade war slashed the market capitalization of observed American firms by roughly $1.7 trillion. The Congressional Budget Office projected that Trump-era tariffs, imposed on several countries, would in 2020 reduce GDP by 0.5% and real household incomes by $1,277. The United States, unlike Europe, imposes no carbon tax. Nonetheless, environmental regulations impose substantial compliance costs on American manufacturers. Accordingly, the CBAM proposed in 2021 by Coons and Rep. Scott Peters (D-CA) sought “to account for the cost incurred by U.S. businesses to comply with laws and regulations limiting greenhouse gas emissions.”
 
Lawmakers have been trying to pass some sort of CBAM for the past several years, with little to no regard for these negative effects. Coons and Sen. Bill Cassidy (R-LA) announced a pair of forthcoming CBAM proposals earlier this year. Another more environmentally minded bill, proposed in 2022 by Sen. Sheldon Whitehouse (D-RI), tied the CBAM rate to the exporting nation’s “carbon intensity.” Unlike his colleagues, Whitehouse seeks also to introduce carbon fees for domestic manufacturers as well as foreign ones. Any CBAM that includes no levy on domestic manufacturers would likely violate America’s international trade obligations and necessitate further harm at home. Article 3 of the General Agreement on Tariffs and Trade, a multilateral agreement enforced by the World Trade Organization (WTO), forbids signatories to favor domestically produced products over foreign competition. Imposing a national carbon tax to maintain WTO compliance would only further burden American consumers and industry. Conservatives typically understand the imprudence of state interventions in the economy. Those who have forgotten ought to brush up on their Economics 101 as congressional debates over CBAM proposals unfold.
 
 
 LIV and Let Live Golf
 
Golf legend Greg Norman shook up his sport when he helped start LIV Golf in 2021. It instantly became a significant competitor to the organization that had become nearly synonymous with the sport of golf for decades, the PGA Tour. Last week, the sport was shaken up again when it was announced that the PGA Tour and LIV Golf would be merging into a single entity. The deal itself – and some of the drama that surrounded it – perfectly encapsulates why the American federal government’s approach to mergers and antitrust is fundamentally flawed. Since its inception, congressional lawmakers were calling for investigations into LIV Golf. Last summer, Rep. Chip Roy (R-Texas) called on the Department of Justice (DOJ) to investigate the fledgling golf circuit for potential violations. A number of other lawmakers, including Sen. Chris Murphy (D-Conn.) have also been vocal in their opposition to the new tour. Ostensibly, this opposition came because of the funding Norman and LIV Golf received from the Public Investment Fund (PIF), a sovereign wealth fund controlled by the Kingdom of Saudi Arabia. Given this thinly-veiled protectionism by U.S. officials and unspoken threats by the PGA Tour to punish golfers who made the switch to the new entity, LIV launched its own lawsuit, alleging monopolistic practices by the PGA Tour. However, after weeks of talks and an agreement to merge the two tours, LIV Golf has announced an end to this litigation. All parties involved seem generally pleased and excited about the outcome.
 
From the start, LIV Golf promised a more exciting brand of golf and even started to popularize team golf tournaments – as opposed to the more common format of golfers competing individually. It also created a tour where golfers get paid more handsomely compared to their PGA counterparts. These new innovations – along with the immense wealth of the PIF – now gets merged with the tradition and recognition of the PGA Tour. Once again, all of the world’s best golfers can directly compete. This should be cheered by golf fans across America. The fans will get a better and more engaging product. The sniping and tension between the tour organizations and their athletes can simmer down. More golfers can get involved to advance their career and be paid more generously than they otherwise would. This is largely a win for all involved. However, this has not stopped U.S. regulators from continuing to circle. Rep. Roy tweeted after the deal was announced, “In the end, it’s always about the money. Saudi Arabia just bought themselves a one-world golf government.” Progressive lawmaker, Rep. Ro Khanna (D-Calif.) was more explicit in his response, calling for a Federal Trade Commission investigation and urging the players to unionize to oppose the deal. Rep. Nancy Mace – while cautiously supportive of the deal – added, “Any type of large acquisition or merger certainly deserves scrutiny in any industry.”
 
From LIV targeting PGA with antitrust suits to the various threats of policymakers at every stage of this story, it all illustrates the foolishness of the new, reactionary approach to antitrust policy in American politics. Anything that is big is considered bad. This has largely been directed at the tech industry as of late. Companies that are barely a couple of decades old are smeared as legacy monopolists, despite having just disrupted entire markets and establishing themselves in place of previously dominant competitors. The same misguided principle is being applied now to professional golf. For decades, the PGA Tour was virtually the only name in golf. Then, a new circuit with significant financial backing emerged on the scene. Within a couple of years, they managed to go toe-to-toe with the PGA Tour and this merger now promises the best of both worlds for fans. This is also hardly unprecedented. In 1966, the National Football League (NFL) and the American Football League (AFL) merged to create the modern NFL, by far the most popular sports league in the U.S.. It has been a wild success and it was explicitly approved by Congress. Today, the league generates $17.2 billion annually. Given the more international appeal of golf, this merger between LIV and the PGA Tour could be even more lucrative.
 
Big companies are not inherently bad. Mergers and acquisitions are not inherently bad. In fact, they very often are able to provide products, services, and entertainment in ways that separate entities simply cannot. The success of tech giants and the NFL should serve as glittering examples of this truth. The PGA-LIV merger is an opportunity for regulators and lawmakers to recognize the error of their ways in antitrust and abandon their wrong-headed approach that goes against the grain of economic progress and prosperity.
 

 
BLOGS:
   
Monday:  House Committee Takes Up Three Critical Tax Relief Bills
    
Wednesday: TPA’s Consumer Center Staves Off Flavored Vape Bans in Eight States in 2023
 
Thursday: TPA Slams Senate Judiciary Committee Markup of JCPA
  
Friday: Reality Check: Pharmacy Benefit Managers Offer Little Benefit to Americans
 
 
 
Media:
 
June 7, 2023: 1828 ran TPA’s op-ed, “Banning disposables would be the first step towards total Vape Prohibition.”
 
June 9, 2023: The Center Square ran TPA’s op-ed, “Facing federal pressure, Colorado lawmakers repeal GON-limiting law.”
 
June 11, 2023: TPA was mentioned in a letter to the editor in NJ.com titled, “N.J. city doesn’t need government to supply broadband service.”
 
June 12, 2023: WBFF Fox45 (Baltimore, Md.) interviewed me about speed cameras on the JFX.
 
June 12, 2023: Inside Sources ran TPA’s op-ed, “At Postal Service, Dog Bite Prevention is All Bark and No Bite.”
 
June 12, 2023: The Jacksonville Journal-Courier (Jacksonville, Il.) ran TPA’s op-ed, “Postal regulatory feud must end now.”
 
June 12, 2023:  Inside Sources ran TPA’s op-ed, “Not Much Hope for New Tobacco Director.”
 
June 13, 2023: Townhall.com ran TPA’s op-ed, “Golf Merger Exposes Government’s Flawed Antitrust Mindset.”
 
June 13, 2023: The American Spectator ran TPA’s op-ed, “No, the USPS Isn’t About to Be Privatized.”
 
June 13, 2023:  Real Clear Markets ran TPA’s op-ed, “European Regulators Embark On Yet Another Tech Policy Blunder.”
 
June 14, 2023:  The Washington Examiner (Washington, D.C.) ran TPA’s op-ed, “America shouldn’t import Europe’s carbon tariff.”
 
June 14, 2023: The Rutland Herald (Rutland, Vt.) ran TPA’s op-ed, “USPS dog bite math.”
 
June 15, 2023:  WBFF Fox45 (Baltimore, Md.) interviewed me about Governor Moore’s plan to build the redline.
 
June 15, 2023:  I appeared on WBOB 600 AM (Jacksonville, Fla.) to talk about infrastructure spending and the regulation of Big Tech.
 
June 15, 2023:  WBFF Fox45 (Baltimore, Md.) interviewed me about delays and an audit of the Kirwan Commission. 
 


Have a great weekend!