T.S. Eliot wrote that “April is the cruellest month.” He wasn’t talking about Tax Day, but he might as well have been. The countdown to Tax Day 

T.S. Eliot wrote that “April is the cruellest month.” He wasn’t talking about Tax Day, but he might as well have been. The countdown to Tax Day continues. The problems at the Internal Revenue Service (IRS) are real and are effecting citizens across the country. For example, New Hampshire truck driver Don Krimper had to take a day off work to fix a mistake made by the IRS. Now, Congress wants the IRS to prepare tax returns for all Americans. Here is Don ([link removed]) talking about what happened. Getting answers from the IRS on difficult tax questions has always been stressful. But now, it is all but impossible. A recent report ([link removed]) from theWashington Post found that only one out of every 50 callers to the IRS’s helpline reached an actual human representative. It’s clear that the IRS cannot handle its current responsibilities. Congress should not increase their mandate to generate
automatic tax returns as well.

Do Drug Price Controls Work?

No, they don’t. Ok, let me explain. First, some background. A cadre of Democratic House members are urging congressional leadership to move swiftly on a proposal concerning prescription drug prices. The proposal would let Medicare negotiate with drug manufacturers for lower prices. It would institute a penalty for manufacturers who increase the price of their products at a rate greater than inflation. There is also a provision that institutes a hard $35 price cap on insulin. Unfortunately, all these proposals would severely damage the market and slow down drug innovation at a time when innovation is needed more than ever. At first glance, Medicare negotiation might seem like a decent idea. After all, there is no reason why negotiations shouldn’t be a part of a market-based solution. However, that assumption is incorrect on its face. A market-based negotiation assumes both parties can come to an agreement in good faith and can walk away if talks break down. Given that Medicare is a
government entity, the playing fields are nowhere near level. The government oversees taxing, regulating, and potentially bringing action against these pharmaceutical companies. These “negotiations” would not be characterized by a desire to find mutual interest but would be driven rather by force and coercion.

An inflationary penalty would be a similarly destructive policy. By creating a penalty—or even an outright ban—on price hikes greater than the rate of inflation, the government is actually incentivizing higher list prices. If drug manufacturers know they will be unable to raise prices beyond a meaningful number, they will be forced to introduce new cures at exorbitant prices to hedge their bets against any unforeseen circumstances. Once again, the assumptions of government central planners will backfire and have the opposite of the intended effect.

The insulin provision is an even more blatant price control. It will also end up having the reverse effect. While insulin prices are a concern for millions, there is a reason prices are so high. Part of it can be attributed to the cost of innovation in the market. Another part can be attributed to the fact that price controls elsewhere necessitate cost offsets domestically. A stringent price control in the United States would create a free rider problem of our own. To mitigate the effects, drug companies would have to limit supply or production to avoid massive blowback. This would lead to potentially worse rationing than we are seeing now. All of this is seemingly ironic, given the example of coronavirus vaccines that have emerged in just the last year.

Pharmaceutical companies invested millions in research and development and were given broad leeway from regulating authorities. The result was three vaccines developed in record time with proof of life-saving benefits. In fact, some of the most prominent advocates for these vaccines, like House Speaker Nancy Pelosi (D-Calif.) are the same people who are now pushing price controls and restrictive drug pricing policies. Price controls will stymie the same type of research and development that produced these vaccines. The consequences down the line could be cures for any number of diseases. These are the hidden costs of price controls. The costliest medicines in the world are those you cannot access because they have not been made. While that won’t be reflected monetarily, the lack of new and innovative cures will carry a heavy human cost. All members of Congress ought to recognize the clear disconnect between these two stances. The reason the world has the vaccines is because of the lack of
price controls. Drugs may cost more in the United States because of the enhanced quality and access afforded the American people. Especially after the last two years, lawmakers must be very wary of anything that could jeopardize the United States’ leadership in drug development. Instituting price controls would be a step back in fighting current and future diseases.

Railing Against Inflation

Policymakers are talking tough on inflation, but the prices of goods are still far too high. Despite a recent Federal Reserve Bank of San Francisco study pointing to government spending as a key contributor to high inflation, President Joe Biden has pressed forward on an astounding $5.8 trillion proposed budget for fiscal year 2023. Multiplying, costly federal rules are yet another source for consumer concern. Households may face even more pain down the track, thanks to the Biden administration’s targeting of cost-effective supply chain infrastructure. A push to establish crew size mandates for railroads will only succeed in increasing prices across the board while doing little to improve the safety of U.S. infrastructure.

It’s up to President Biden to fix his administration’s tunnel vision and nix these nonsensical rules. Misguided nostalgia from Washington, D.C. bureaucrats isn’t limited to just high tax rates. Despite a dizzying array of safety improvements and technological advancement throughout the nation’s rail system, the Biden administration’s view of rail infrastructure remains tethered to the 1950s. Back in the days when safety monitoring was in its infancy, multi-crew teams were reasonably seen as a necessity for rail safety. But thanks to modern technologies (such as Positive Train Control) train operators can now be warned of serious issues and trains can be brought to a halt if issues are not resolved. Safety improvements have led to regulatory systems around the world (including in the European Union, Australia, and New Zealand) that embrace one-person crews in freight operations. But progress in modernizing crew sizes may soon be dramatically reversed in the U.S., thanks to a proposed rule
(resurrected from the Obama era) that would mandate all freight train locomotives are staffed with a conductor and engineer with no path toward change in the future. Nearly halfway into his administration, President Biden appears as determined as ever to fulfill a campaign promise made to railway labor in 2020: “I'm going to keep fighting for those crews, requiring two-person crews on freight trains, protecting transit workers from assault, making sure that everyone has what they need to safely do their job.”

For all the lofty campaign rhetoric, though, there’s preciously little evidence that rail safety requires at least two workers on board. In fact, when the Federal Railroad Administration (FRA) first proposed the rule that would mandate two-member crews, it admitted it “cannot provide reliable or conclusive statistical data to suggest whether one-person crew operations are generally safer or less safe than multiple-person crew operations.” An inability to modernize train operations will make rail operations less competitive, likely pushing goods to other, more congested modes of transportation and driving up costs across the supply chain. Those are just the immediate, visible implications. Long-term environmental costs will only make things worse. As Reason Foundation senior transportation policy analyst Marc Scribner notes, “trucking also emits approximately seven times as much carbon dioxide per ton-mile as rail. Thus, disadvantaging rail relative to trucking through a train crew-size
mandate would increase the transportation sector’s emissions intensity.” Biden should keep in mind these unintended consequences of rail regulation and back away from rules that would increase carbon emissions. All regulations ultimately entail real tradeoffs that impact the lives of millions of Americans. But in the case of proposed rail rules, bureaucrats would be trading virtually no safety improvements for higher long-term costs and environmental degradation. President Biden should quit yanking Americans’ chain about clamping down on inflation and put regulatory reform back on track.

BLOGS:

Monday: The Irrepressible Rise of Novel Nicotine Products ([link removed])

Tuesday: TPA’s Patrick Hedger joined ‘Explain to Shane’ Podcast to Discuss Antitrust Legislation ([link removed])

Wednesday: A Stamp of Approval for Electric Vehicles? ([link removed])

Thursday: TPA’s Bill of the Month: Federal Student Loan Integrity Act ([link removed])

Friday: More government intervention in broadband wireless isn’t necessary as study shows U.S. mobile broadband speeds among fastest in world ([link removed])


MEDIA:

April 1, 2022: I appeared on 93.1 FM WACV ([link removed]) (Montgomery, Ala.) to talk about the return of earmarks.

April 2, 2022: TPA was quoted in The Washington Free Beacon’s article, “Dems in Actual Disarray: How Senate Democrats Fumbled Confirmation of a Top Biden Nominee ([link removed]) .”

April 4, 2022: WBFF Fox45 (Baltimore, Md.) interviewed me about the best way to do a Baltimore City audit ([link removed]) .

April 4, 2022: The Daily Mail ([link removed]) quoted TPA in their article, “Secret Service 'is paying more than $30,000 A MONTH to rent out a mansion in Malibu to protect Hunter Biden': Taxpayers 'footing bill for 'six-bedroom 'Spanish-style' estate that has 'gorgeous ocean views’”

April 5, 2022: Patrick Hedger joined AEI’s podcast, “Explain to Shane ([link removed]) ” with Shane Tews to discuss the latest antitrust bills and how they affect consumers across the country.

April 5, 2022: I appeared on News Radio WIOD 610 AM ‘The Brian Mudd Show’ (Miami, Fla.) to talk about President Biden’s 2023 budget ([link removed]) .

April 5, 2022: National Review ran TPA’s op-ed, “IRS Power Grabs Threaten Low-Income Americans ([link removed]) .”

April 5, 2022: The Center Square ran TPA’s op-ed, “For low prices, look to rail regulatory reform ([link removed]) .”

April 5, 2022: Inside Sources ([link removed]) ran TPA’s op-ed, “Harm Reduction Could Be Transforming Health in Japan.”

April 5, 2022: I appeared on ‘The Real Story’ ([link removed]) on One America News Network to talk about rising gas prices.

April 5, 2022: National Review |Capital Matters did a write up of TPA’s op-ed titled, “Today in Capital Matters: IRS Woes ([link removed]) .”

April 6, 2022: The Observer ([link removed]) (Dunkirk, N.Y.) ran TPA’s op-ed, “For low prices, seek reform on rails.”

April 6, 2022: Dan Savickas joined ‘The Barrett Brief’ with Rick Barrett to discuss the IRS and student loan moratorium.

April 6, 2022: WBFF Fox45 (Baltimore, Md.) quoted me in their story, “Gifts for City Council with Nick Mosby's name are 'standard trinkets,' he says.” ([link removed])

April 6, 2022: The Washington Times (Washington, D.C.) ran TPA’s op-ed, “Forgiving federal loans is unfair to taxpayers ([link removed]) .”

April 7, 2022: WBFF Fox45 ([link removed]) (Baltimore, Md.) interviewed me about the guaranteed income program.

April 7, 2022: I appeared on WBOB 600 AM (Jacksonville, Fla.) to talk about the 12-year anniversary of Obamacare.

April 7, 2022: I appeared on KWTO 93.3 FM (Springfield, Mo.) to talk about President Biden’s Budget. ([link removed])

April 7, 2022: TPA was quoted in the Washington Examiner’s ([link removed]) piece titled, “What is next for Twitter now that Elon Musk is on the board?”

April 8, 2022: Issues & Insights ran TPA’s op-ed, “New Capital Gains Proposal Would Fleece the Middle Class ([link removed]) .”


Have a great weekend!
Best,

David Williams
President
Taxpayers Protection Alliance
1101 14th Street, NW
Suite 1120
Washington, D.C. xxxxxx
www.protectingtaxpayers.org ([link removed])

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