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Congratulations Donald Trump! Let’s Get to Work On Extending the Tax Cuts
Building a strong economy appears to be a top priority as President-elect Donald Trump prepares for a second term. Extending the expiring tax cuts should be job one for Trump and the new Congress. Despite its success in lowering the tax burden both in terms of monetary value and time value for individuals and businesses, most of the Tax Cuts and Jobs Act (TCJA) reforms have either expired or are slated to expire soon.
The key to the success of the TCJA was its mix of making a simpler and flatter tax code for individuals and the introduction of investment-inducing incentives for businesses. Studies showed that around 80 percent of all filers saw a lower tax liability than they otherwise would have had the TCJA not been enacted. The TCJA also reduced the tax compliance burden by about 2 billion hours 3 years after it passed, allowing businesses to use that time and money for more productive uses than preparing and filing taxes. And, of course, nobody can forget the bonuses that were given out by corporations. America is facing increasing economic pressure from foreign adversaries that could erode its position as global economic leader. The tax code needs to support, rather than hamper, the ability of the U.S. economy to outcompete these foreign competitors. Unfortunately, the Biden Administration’s approach to corporate taxation did precisely the opposite. Not only are most of the investment-inducing provisions of the TCJA on track to expire, the U.S.’s effective corporate tax rate is higher that its peer economies—such as other Organization for Economic Cooperation and Development (OECD) countries. Instead of addressing this flaw, the 2025 budget brought forward by the Biden administration would increase that rate up to 28 percent. It would also establish a minimum effective tax rate of 21 percent for companies valued at $1 billion or more, amongst other rate increases on both stock buybacks and payroll taxes.
Increasing the corporate tax rate does little more than punish entrepreneurship, the motor of any vibrant economy. Corporations are not simply passive price-takers that will accept this tax pressure without downstream consequences. Unsustainably high corporate tax rates pressures businesses to close, downsize, or move to more tax-friendly jurisdictions, decreasing overall revenues. And in a context where emerging economies are taking proactive steps to lure these businesses in, America faces a higher risk of losing these valuable economic agents that provide valuable jobs and income for all Americans. The upcoming Trump administration should look into reversing this trend and ensure that the U.S. is well positioned to tackle foreign competition by creating a more business-friendly tax ecosystem. Bringing back the corporate rate to 21 percent would be a welcome first step, but a lower than OECD average should be the end goal. With what is shaping to be a Republican-led Senate and a healthy presence (or even majority) in the House, the upcoming Trump administration has the tools to build on TCJA’s success. Taxpayers would be thankful if he did.
Outdated Transplant Lives Claim Thousands of Lives
It’s easy to take a functioning kidney or liver for granted. But, for the approximately 100,000 Americans who are on the national waiting list for a lifesaving organ transplant, and the 17 Americans who die daily because their name wasn’t called fast enough, each day is a battle for survival. Recently, Harvard University researchers gave hope to transplant patients, finding that the Food and Drug Administration-approved drug donepezil can be used in “emergency situations to prevent irreversible organ injury while a person is being transported to a hospital.” But, until policymakers liberalize the transplant market and allow donors access to meaningful compensation (with proper safeguards), these medical advances will be frustratingly limited. Policymakers must end this preventable tragedy and save hundreds of thousands of lives.
Many pages have been published dissecting the deficiencies of the organ transplant system. The simple problem is an imbalance between supply and demand. With approximately 42,000 total transplants performed in the U.S. each year, transplant centers cannot hope to cover the 60,000 new individuals added to the waitlist each year. Not enough people are altruistically motivated to go under the knife and undertake a costly and disruptive operation for a stranger. And, because the National Organ Transplantation Act of 1984 deems it “unlawful for any person to knowingly acquire, receive, or otherwise transfer any human organ for valuable consideration for use in human transplantation if the transfer affects interstate commerce,” these individuals cannot be compensated for their donations. A promising solution would be allowing a market in transplanted organs, in which some mix of patients, insurers, government programs, and non-profit organizations would pay individuals to part ways with their organs. A legal organ market could also allow individuals to sell their organs upon death, with proceeds passed onto heirs or used to defray funeral expenses.
This market-based framework is not without its critics. Oxford scholar Dr. Simon Rippon contends that legal organ markets would inevitably harm the poor and exacerbate inequality in society. He writes, “if organs can be easily exchanged for cash they will then become commodified, and naturally subject to the kinds of social and legal demands and responsibilities that govern our other transactions in the market.” The truth is that this is unavoidable and already happening. While insurers are proscribed by law from paying for organs, insurance plans often pay for the costs associated with transplant surgery and recovery. Insurance providers often grant coverage for both the policy holding recipient of the transplant and the living donor, but the scope and breadth of services depend on the type of insurance held by the recipient. As the largest payer for kidney transplantation in the U.S., Medicare reimbursement policies exert significant influence on transplant centers, physicians, and other insurers. Medicare reimbursement costs are significantly lower than for private insurers, and as a result, costs inevitably shift to patients on private plans capable of paying more money.
There has been some limited progress on donor compensation. For example, the National Living Donor Assistance Center subsidizes living donors’ lodging and transportation expenses. In 2020, the Department of Health and Human Services finalized a rule, “to remove financial barriers to organ donation by expanding the scope of reimbursable expenses incurred by living organ donors to include lost wages, and child-care and elder-care expenses incurred by a caregiver.” But until individuals, non-profits, and insurers can pay directly for organs, prospective donors will largely stay on the sidelines. It’s time for market reform to catch up with medical innovation. Thousands of lives depend on a better approach.
BLOGS:
Monday: Taxpayer Watchdog Looks Ahead to – and Past – Tuesday’s Election
Wednesday: A Message to President-Elect Donald Trump & Congress: Extending Key TCJA Provisions Should be a Day-One Priority
Thursday: What You Should Be Reading: October 2024
Friday: Why We Need Free Trade: A Free Trade Center Interview with Scott Lincicome
Media:
October 31, 2024: The Baltimore Sun (Baltimore, Md.) quoted TPA in their article, “Baltimore lawmaker warns against creating another fund run by ‘outside operative’.”
October 31, 2024: Broadband Breakfast mentioned TPA in their article, “Conservative Groups Oppose Broadband Taxes on ISPs, Agreeing with Rosenworcel.”
October 31, 2024: The Baltimore Sun (Baltimore, Md.) quoted TPA in their article, “Warnings issued on ballot measure Officials say Question G could hurt funding ability.”
October 31, 2024: WBFF Fox45 (Baltimore, Md.) quoted me for their story on the Baltimore City charter amendment on city funds.
November 1, 2024: The St Louis Today (St. Louis, Mo.) ran TPA’s op-ed, “Proposition S threatens St. Louis city’s tourism economy.”
November 1, 2024: The Daily Pouch ran TPA’s op-ed, “The disposables ban shows that Action on Smoking and Health has forgotten its purpose.”
November 2, 2024: WZTA 1370 AM (West Palm Beach, FL) interviewed TPAfor their story on the GDP and government spending.
November 4, 2024: KNBS 101.9 FM (St. Louis, Mo.) interviewed TPA for their story on Proposition S in St. Louis.
November 4, 2024: WBFF Fox45 (Baltimore, Md.) interviewed me for their story on the Baltimore city council President election.
November 4, 2024: Techdirt mentioned TPA in their article, “Telecoms Bankroll More Misleading Attacks On Community Broadband Networks.”
November 4, 2024: WBFF Fox45 (Baltimore, Md.) quoted TPA in their article, “'Inexcusable': Baltimore schools continued to pay police officer accused of stealing $215K.”
November 4, 2024: Our Community Now quoted me in their article, “Baltimore City Council presidential race between Cohen and Digman.”
November 4, 2024: WBFF Fox45 (Baltimore, Md.) interviewed me for their story on education spending.
November 4, 2024: WBFF Fox45 (Baltimore, Md.) interviewed me for their story about Zeke Cohen becoming the next President of the Baltimore City City Council.
November 5, 2024: Resist the Mainstream (Miami, Fla.) quoted TPA’s tweet in their article, “Leaked Memo Confirms Dems’ Worst Fears.”
November 5, 2024: Resist the Mainstream (Miami, FL) quoted TPA’s tweet in their article, “America on Edge: Battleground States Brace for Election Day Violence as ‘Civil War’ Fears Intensify.”
November 5, 2024: WBFF Fox45 (Baltimore, Md.) interviewed me for their story on the Baltimore city council.
November 6, 2024: The Chronicle (Willimantic, Conn.) ran TPA’s op-ed, “Postal Service needs helpers for Santa's sleigh.”
November 6, 2024: WBFF Fox45 (Baltimore, Md.) interviewed me for their story on shrinking the Baltimore city council.
November 6, 2024: WBFF Fox45 (Baltimore, Md.) quoted me for their article, “Critics question city spending after Baltimore ends contract with arts organization.”
November 6, 2024: WBFF Fox45 (Baltimore, Md.) quoted me for their story on Baltimore city cutting ties with BOPA
November 7, 2024: WBFF Fox45 (Baltimore, Md.) quoted me for their story on Baltimore city cutting ties with BOPA
November 7, 2024: WBOB Salem Radio (Jacksonville, Fla.) interviewed me for their story on government regulation.
November 7, 2024: WBFF Fox45 (Baltimore, Md.) interviewed me for their story on Republication having control of the White House, the House, and the Senate.
November 7, 2024: WBFF Fox45 (Baltimore, Md.) quoted me for their story on Baltimore city cutting ties with BOPA
November 7, 2024: I appeared on WBOB 600 AM (Jacksonville, Fla.) to talk about tax reform and spending cuts in the next Congress.
November 8, 2024: I appeared on 55KRC Radio (Cincinnati, Ohio) to talk about spending, energy issues, and Pharmacy Benefit Managers.
Have a great weekend!
Best,
David Williams
President
Taxpayers Protection Alliance
1101 14th Street, NW
Suite 500
Washington, D.C. xxxxxx
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