This week on Capitol Hill, the Senate Finance Committee held a nomination hearing for prospective Internal Revenue Service (IRS) Commissioner, Daniel Werfel. The Taxpayers Protection Alliance (TPA) sent letters to Finance Committee members on both sides of the aisle the day prior to the hearing with suggested questions for Mr. Werfel. These questions included how he plans to address the most critical issues at the agency: the dire state of customer service, its cybersecurity and data privacy struggles, the discriminatory targeting of low and middle-income taxpayers with audits, and the harmful effects of IRS tax preparation and filing legislation. Clearly, Senators agreed with our concerns, with Chairman Ron Wyden (D-Ore.) pressing Mr. Werfel on the IRS’ audit practices, Sen. Ben Cardin (D-Md.) and others reiterating the need for a robust customer service enhancement plan, and Sens. Chuck Grassley (R-Iowa) & Marsha Blackburn (R-Tenn.) hitting on data privacy concerns. We thank these Senators for raising these painfully clear taxpayer concerns.
 
Sugar Rush
 
Another Valentine’s Day has come and gone. When millions of consumers bought chocolates for their loved ones they noticed that prices were way higher than they were last year. In fact, chocolate prices are up about 12 percent from 2022, contributing to an astounding $26 billion in expected Valentine’s Day spending. Unfortunately, these figures are far higher than they ought to be thanks to outdated and unnecessary government policies. Federal bureaucrats use tariffs to prop up the price of domestic sugar, leading to heartbreak and empty wallets. It’s time to show consumers some love and finally end the U.S. Sugar Program. For nearly 100 years, America’s not-so-sweet sugar policy has inflicted significant costs on consumers, confectioners, and food producers. Though the federal government has taxed sugar imports since time immemorial, the infamous 1934 Sugar Act laid the groundwork for a sprawling import, allotment, and quota scheme that froze markets and calcified sugar prices. Fast forward to today, and federally mandated minimum sugar prices continue to grip the American marketplace. Price support loans extended through the Department of Agriculture result in U.S. sugar prices significantly higher than the worldwide average. Domestic raw sugar prices sit at around 36 cents, compared to around 19 cents across the globe. Similarly, the price for wholesale refined cane sugar in the U.S. is more than double what foreign consumers pay. The government knows that domestic price supports would fall apart if exposed to any international competition. Onerous quotas and tariffs keep the system intact, practically banishing imported sugar from supermarket shelves.
 
These byzantine price controls force Americans to cut back on their purchases, to the detriment of thousands of small businesses. Baltimore, Maryland-based Wockenfuss Candies owner and president Paul Wockenfuss expressed concerns that strict import restrictions create an “unlevel playing field” that is “just hurting the smaller businesses.” And when businesses can’t sell their products due to dubious government programs, jobs are inevitably lost. According to a 2013 Iowa State University study, the U.S. sugar program costs up to 20,000 jobs per year even considering employment in the “protected” domestic sugar industry. Yet, advocates for the broken status-quo warn of the dire consequences of the U.S. opening its markets to cheap foreign competition. They’ve even adopted the reasonable-sounding position that the U.S. sugar program can go – so long as other countries ditch their sugar subsidization schemes first. This concept, known as “zero-for-zero,” is in fact an unattainable ideal that all-but-ensures that sugar protectionism will remain a staple of U.S. policy. Claims abound that the U.S. “unilaterally disarming” on sugar policy is only a sweet deal for foreign companies and the governments subsidizing them. The European Union proved these “zero-for-zero” proponents wrong in 2006 when it implemented a wide-ranging quota relaxation and target price reduction scheme. Sugar prices have fallen considerably since reform, and, despite recent price increases, are still significant lower than they were pre-reform. And, due to further farming-related liberalizations, European production relative to consumption is growing and will likely continue to grow.
 
America could have a similarly sweet experience by kiboshing its sugar program. Consumers should be able to buy chocolates for their honeys without breaking the bank.
 
 
Private Equity’s Animal Magentism
 
In this turbulent era of job cuts and stock market swings, businesses are usually more than happy to take investors' money. But, not all investment is celebrated equally among the political and chattering classes. President Biden and Congressional allies such as Sen. Elizabeth Warren (D-Mass.) have roundly criticized private equity (PE) firms as vultures intent on mining companies for profit, laying off workers, and deteriorating the consumer experience. Their current ire has been directed at veterinary practices, which have seen about $45 billion worth of PE dealmaking over the past five years. What Sen. Warren et al don’t tell you is that PE investment in these practices are helping veterinarians and the four-legged friends they take care of. 
 
It's a tough time to practice animal medicine. In 2022, The Atlantic staff writer Sarah Zhang reported, “Hospitals, clinics, and vet offices around the U.S....have been turning animals away because they are short staffed. This crisis has hit all levels of the system, from general practice to specialists, but animal emergency rooms—where the job is most stressful—have it the worst.” Even if pet owners can find an elusive open spot, payment is certain to be a stressor for millions of households. About 1 in 4 pet owners had to forgo medically necessary care for their pet over the past year due to rising costs. PE firms typically swoop into a fragmented and troubled marketplace. Veterinary clinics seemed like an obvious choice for investment managers. While there is not much data at this point, early signs are encouraging. Large PE-backed ventures such as National Veterinary Associates seem to be having success in retaining veterinarians in a notoriously burned-out profession. A nationwide corporate infrastructure can prevent employee stress in ways that smaller practices cannot, through things like practice matching programs, mentorship, and development programs.
 
And, data from other industries suggest that PE can make significant operational improvements in a short period of time. According to Harvard Business School economist Josh Lerner, there is evidence that fast food restaurants taken over by PE firms are cleaner and less likely to give consumers food poisoning. That result is encouraging for veterinary hospitals, given the significant issues associated with contamination and healthcare-related infection control. Evidence on employment is more mixed, but Lerner found that PE acquisitions of fragmented industries such as veterinary practices tend to have double-digit employment gains. Productivity also tends to increase, allowing practices to hire more people but keep costs under control for consumers. Other factors, however, may result in higher prices for pet owners. E-commerce pet goods provider Chewy is trying to grow their veterinary telehealth practice but has encountered significant resistance from regulators. Most states still require veterinarians to examine an animal in-person before diagnosing illnesses and prescribing treatments, making it all but impossible for providers to go completely virtual. And that’s a shame, because telehealth can save doctors and patients a significant sum of time and money. Public officials should focus on these barriers to care instead of demonizing investments that are increasing growth and productivity in a long-struggling industry. PE can be the purr-fect solution to veterinary troubles.

BLOGS:
   
Monday:   More Millions From Bloomberg to Push Bans Will Cause Greater Harm Than Good
 
Tuesday:  Not-so-Sweet Sugar Program Leads to Lonely Hearts on V Day
   
Wednesday: TPA Sends Letter to Finance Committee Regarding IRS Commissioner Hearing
 
Wednesday: Testimony before the Hawaii House Committee on Consumer Protection & Commerce Regarding Banning the Sale of Flavored Tobacco and Vapor Products
 
Thursday: Lawmakers End FDA’s War on Lab Animals
 
Thursday: Testimony before the Maryland Senate Finance Committee Regarding Banning the Sale of Flavored Tobacco and Vapor Products
  
Friday: Section 230 at SCOTUS: What Consumers Need to Know
 
 
Media:
 
February 10, 2023: The Ripon Advance mentioned TPA in its story, “Preventing Improper Payments Act introduced by Moore.”
 
February 11, 2023:  Townhall.com ran TPA’s op-ed. “More Millions From Bloomberg to Push Bans Will Cause Greater Harm Than Good.”
 
February 13, 2023:  The American Spectator ran TPA’s op-ed, “Postal Regulators Save the Day for Taxpayers and Consumers.”
 
February 13, 2023:  Issues & Insights ran TPA’s op-ed, “FCC Should Carefully Craft Digital Discrimination Rules.”
 
February 15, 2023: The Daily Caller ran TPA’s op-ed, “The Dangers Of Wealth Taxes Progressives Won’t Discuss.”
 
February 15, 2023: The Postal Times ran TPA’s op-ed, “Postal Regulators Save the Day for Taxpayers and Consumers.”
 
February 16, 2023:  WBFF Fox45 (Baltimore, Md.) interviewed me about gas taxes in Maryland.
 
February 16, 2023:   I appeared on WBOB 600 AM (Jacksonville, Fla.) to talk about the Internal Revenue Service. 
 
February 16, 2023:  Townhall.com ran TPA’s op-ed, “The Demise of Juul Is the Latest Self-Inflicted Failure by Public Health.”
 
February 17, 2023: I appeared on the Tennessee Star Report to talk about the Internal Revenue Service.
 
February 17, 2023: The Center Square ran TPA’s op-ed, “New era of frivolous antitrust hearings.”
 
Have a great weekend!