Tax reform explained: How it helps our culture, our families, our economics


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Listen to the 10 min audio

Read the transcript:

TOM LAMPRECHT:  Harry, it was last Wednesday President Donald Trump said the American worker received a great Christmas present. He was talking about the new tax bill legislation that was passed. Analysis says legislation could increase the national GDP by 1.7 percent and wages could see a bump by 1.5 percent.

THE TAX REFORM GOAL

DR. REEDER: The Republicans in the Senate rise or fall with this and the Democrats now are on record as having voted against, en masse, a tax credit and tax simplification plan. Certainly, that will become fodder in the next election if the tax plan succeeds – and it’s the kind of tax plan that you’ll start getting the feedback pretty quickly on it.

Let’s take a look at it, Tom. The original idea was to get the seven tax brackets down to three or five. That did not happen, yet they did lower rates in every single tax bracket, but they also took away deductions at the same time in an effort to simplify and the idea was some of these deductions that only the rich can take advantage of, either by being able to secure lawyers who are competent to do it and tax experts that they can take advantage of it so, in that sense, the deduction reductions were supposed to be middle class and lower class-friendly.

And the idea was to put it on a postcard – right now, the figure’s being used that over 90 percent will go to the postcard and the reason why is because the deductions available have been reduced in terms of these intricate deductions and they focused in on things like child adoption, marriage, that there are either tax credits or deductions associated with that.

HOW THIS HELPS CULTURE

Now whether it’ll be over 90 percent or not, as it’s being claimed, I don’t know. They’ve doubled the marriage benefit and they’ve doubled the child tax credit. Behind that, now from a Christian world and life view, of course, I applaud that because, A.), it is a step toward removing the penalties on those who are married and, B.), it is a step toward supporting marriage, which is best for the next generation.

Yes, a single parent is going to have a challenge in this, but there are other remedies available to the single parent. However, those who are cohabitating without marriage and have children, this will be quite a hit on their pocketbook which, again, encourages marriage, which is, I believe, a good thing in our society.

Properly developed and prepared marriages is a good thing and so a tax system that encourages family structure, I believe, is good and this one does, undoubtedly, encourage the family structure and so I would strongly encourage that.

TOM LAMPRECHT: Yeah, Harry, it is interesting because, for years and years, we heard the complaint that there was a marriage penalty and many critics of this new tax plan are coming out and saying, “Whoa, this is not fair. There’s now a penalty against people that are cohabitating that are not married.” Yet, at the same time, we see the family structure and, in certain demographics, that there’s an absentee of fatherhood and there’s been correlations drawn together that that equals troubled young men that are growing up in our society.

DR. REEDER: Exactly. Let me navigate back to my statement. I’m grateful it encourages the family structures – no longer a penalty, there’s now an incentive to marriage, which is better for the next generation. It has been proven that children need fathers and mothers in their life and they need the stability of a family, not two people cohabitating while it is convenient and then they walk apart and now kids don’t have a family structure to be raised in or people that it costs them to be married.

HOW THIS HELPS ECONOMICALLY

When you get to the economic side, it is estimated that this will, “cost the government $1.5 trillion” in the final analysis of revenue, but the government says, in the dynamic scoring, it would actually end up in a positive. If you have a 1.8 increase in the GDP, revenue side of that will more than make up for the $1.5 trillion loss.

We’ve already seen immediately upon the passage of this, dozens of companies – I mean, big name companies – gave $1,000.00 bonuses to their workers, made certain promises and, in some cases, in the process of building new corporate structures that they were going to build overseas and, in some cases, begin the process of moving them back. They also created an incentive for the offshore money to be brought back, which is in the trillions and trillions of dollars.

They also, because of the efforts of a couple senators such as Senator Langford and Senator Lee and Senator Rubio and others, they were able to restore the adoption assistance which, again, is family friendly. Kids that don’t have families, now there is help for those who go through the enormous price tag, which is anywhere from $20,000.00 to $50,000.00 to get through all the regulations for adoption.

Their point is, “We can’t remove the regulations because we want to make sure kids get in good homes, but we can give some support – some tax relief – to those who are going through that process,” and that was put back in place as well.

Another thing that was done, Tom, is that they doubled the amount before any tax is placed upon estate inheritance. I abhor the “death tax.” I think you’ve already taxed that money once and I don’t think it’s fair to tax it again. I think it’s the government just saying, “We’ve got the power to do it and we’re going to get you twice.”

WHO TAX REFORM HURTS

There’s a basic approval of the tax reform, but when you go and ask people do they approve it on an individual basis, there is a negative response. It’s almost 2 out of every 3 say, “I don’t like the tax package because it hurts me.”

Well, it does hurt people. No. 1, fewer people are getting married and it does hurt them. Almost everybody loses some pet deduction that they had worked into their system. What they don’t take the time to look at is, “Yes, you can go to this simplified system now. Yes, you lost some deductions, but your rates are being lowered and these valid credits are being put into place.” With the rates being lowered and these deductions and credits in place, what happens now is, actually, you don’t need to go to this intricate system of deductions. And, by the way, you don’t even need to hire as many tax lawyers and accountants as you used to, either.

WHAT ABOUT THE SPENDING?

From a Christian world and life view, I’m always for a limited government. People say, “Well, they didn’t reduce spending.” Tom, it has proven out under President Reagan, a Republican, and President Kennedy, a Democrat, when they went through this tax restructuring and reform, there was a drastic impact on the income of the government because of the increased activity economically.

There is one view that, “The government deserves the money and we’ll see what we want to give you back. And, by the way, there’s a pie and we need to cut it up and the government ought to get the biggest cut so that it can redistribute wealth.”

The other group says, “No, let’s let people redistribute wealth. The government has certain functions, so let’s tax to get those functions done. Otherwise, let’s let people keep their own money.” And, when you do, not only do we divide up the pie, the people will actually make more pies.

WHY THIS IS A STEP FORWARD

Therefore, from a Christian world and life view, I support it because it’s a step forward – not complete, by any means – a step forward on limited government affirming that people own their money, not the government, a step forward in supporting the family structure, a step forward in affirming something we desperately need and that is the adoption ministry that our government ought to have in place, a step forward of simplification so that people can understand what’s going on at least a little bit more clearly – more or less can understand – and it is a step forward toward creation of wealth instead of redistribution of wealth.

For those reasons, I would support what is being done. What I am hoping is it’s going to be such a significant step forward that other things that need to be done will yet be done and somehow, out there, there can be an effort to deal with the issue of budgeting and, dare I open up a box – and I am at the age that it’s okay for me to open this box – the “entitlement pieces.”

And I don’t just see them as entitlement because people paid into Social Security, but I believe it would be fair to put a reform in that raises the age of receiving it commensurate with the rising age of life expectancy. It was established back in the ‘30s and modified once since then in light of life expectancy at one age and that has clearly risen and so I think it would be appropriate that people would begin to collect those things at a later date.

If nothing else, at least that would be a step forward in reigning in the spending area. Now, speaking of the spending area, something that’s going to affect the spending area, Tom, is the President’s Security Speech and let’s take a look at that tomorrow.

Dr. Harry L. Reeder III is the Senior Pastor of Briarwood Presbyterian Church in Birmingham.

This podcast was transcribed by Jessica Havin. Jessica is editorial assistant for Yellowhammer News. Jessica has transcribed some of the top podcasts in the country and her work has been featured in a New York Times Bestseller.

13 hours ago

A victory in court for school choice

The U.S. Supreme Court recently delivered a “big win” for school choice and religious freedom. School choice enables competition, which economists find generally improves the quality of goods and services. I believe that this result will apply to education, and specifically public schools.

Espinoza v. Montana Department of Revenue involved 2015 legislation allowing tax-deductible contributions for scholarships to private, non-profit schools. The Montana Supreme Court struck down the act in 2018 as an unconstitutional use of public funds for religious purposes, including any school or college controlled by a church. Montana’s constitutional provision is a “Blaine Amendment” dating to the 19th century to prohibit state aid to parochial schools; 37 states, including Alabama, have Blaine Amendments.

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The constitutional issues involved were the First Amendment’s separation of church and state and religious discrimination in government policy. Chief Justice John Roberts’ majority opinion found the Blaine Amendment discriminatory: “A State need not subsidize private education. But once a State decides to do so, it cannot disqualify some private schools solely because they are religious.”

The Montana Supreme Court struck down the entire school choice program based on the Blaine Amendment. Although Montana’s legislature could have enacted a scholarship program applying to only non-church private schools, this would have significantly restricted parents’ choice. According to the Institute for Justice, which litigated Espinoza, Blaine Amendments are often used to block school choice. Only a narrow interpretation of Alabama’s provision allowed the Alabama Accountability Act to withstand challenge.

Separation of church and state is wise constitutional doctrine. Still, I do not see the scholarships as violating separation of church and state. The public “dollars” involved are taxes foregone. Church-affiliated schools often operate at a loss, so tuition scholarships will not yield profits to support other activities and presumably provide enough education to qualify as schools.

George Mason law professor Ilya Somin offers an illustrative comparison. No one worries that tax exemptions for religious charities or police and fire protection for churches constitute state support for religion. Tax deductions for scholarships do not establish a state religion.

Church-affiliated schools provide a variety of education consistent with their doctrine and moral teachings. The goal of school reform should be, as economist John Merrifield emphasizes, a diverse menu of options to suit students’ varied learning styles and parents’ values. Church-affiliated schools accomplish this.

School choice policies will make Americans more equal. Affluent Americans, who can afford private school tuition, have long enjoyed school choice.

American higher education features school choice. Alabamians can attend any of the state’s 14 four-year universities or more than 30 two-year colleges at in-state tuition rates. These institutions offer diverse educational options. Two-year colleges offer vocational programs and inexpensive core classes. Four-year universities include one modeled after a liberal arts school, large and small campuses, and numerous online degrees. Federal student aid and loans help make private colleges affordable.

By contrast, K-12 public schools require students to attend their assigned school. After paying taxes to support government schools, many families cannot afford private school tuition. The economic case for public education stresses ensuring all students can afford schooling, which school choice accomplishes.

Choices unleash quality-enhancing competition. Some of America’s best public schools are in affluent suburbs where districts must compete for students because parents can afford private schools. It is tempting to attribute suburban districts’ quality spending, but statistics show otherwise. In 2018, Baltimore city schools spent $250 less per pupil than Montgomery County (Maryland) and $1,000 more than Fairfax County (Virginia) in suburban Washington, two of America’s most affluent counties.

In time school choice will force beneficial changes in public school curriculum. Currently, the curriculum is a political football which both parties seek to control. Teachers educate children in classrooms; politicians in Montgomery or Washington shape learning only through bureaucratic controls forcing a curriculum on local schools. School choice will empower parents to find schools that help their children learn. To successfully compete for students, control will need to be devolved to schools and teachers, which I see as a very good thing.

Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. The opinions expressed in this column are the author’s and do not necessarily reflect the views of Troy University.

15 hours ago

VIDEO: More municipalities opt for mandatory masks, schools head towards in-class instruction, Sessions/Tuberville race nears the end and more on Alabama Politics This Week …

Radio talk show host Dale Jackson and Alabama Democratic Executive Committee member Lisa Handback take you through this week’s biggest political stories, including:

— Will Governor Kay Ivey consider a statewide mask ordinance as more municipalities adopt ordinances and pressure continues to mount?

— Are parents going to feel safe sending their kids to school in the Fall?

— Who will win the Republican runoff between former U.S. Attorney General Jeff Sessions (R-AL) and former Auburn coach Tommy Tuberville?

Jackson and Handback are joined by former U.S. Attorney General Jeff Sessions to discuss the runoff election for the Republican nomination for the U.S. Senate seat currently held by U.S. Senator Doug Jones (D-AL).

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Jackson closes the show with a “parting shot” at people who think the government can’t put in more restrictions when they have shown they can, and probably will, do more if the coronavirus pandemic doesn’t get under control.

Dale Jackson is a contributing writer to Yellowhammer News and hosts a talk show from 7-11 AM weekdays on WVNN.

16 hours ago

Alabama sisters continue their family’s farming legacy

Sisters Allie Corcoran and Cassie Young loved growing up on a farm in Eufaula, but once they left home and earned their degrees at Auburn University, they realized their hearts were still at the family farm.

“I always knew I wanted to come home and be part of the farm, but I didn’t know where I would fit in,” Young said. “The only things I have ever felt close to, or had a desire to be a part of, were farming and working with people. At Auburn, I considered a career in family and adolescent counseling, but I knew it would be difficult to find work in this field near home and I was unwilling to move.”

When the sisters were growing up, their family raised crops such as cotton, peanuts, soybeans, corn, grain sorghum and wheat, along with cattle. The family managed a peach orchard.

Their childhood experiences and love of farming pushed them to find their eventual calling, and they opened Backyard Orchards near Eufaula in 2010.

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“Our father had the idea to start a u-pick operation,” Young said. “We had an exciting concept for a new family venture and found the perfect location, so we decided to become entrepreneurs.”

Backyard Orchards gave the sisters the path they longed for in fitting into the family business. They offer u-pick and freshly packed produce.

Fruits currently ripe for picking are peaches and blueberries. There is a variety of fresh vegetables available, including potatoes, onions, squash, zucchini, tomatoes, cucumbers, eggplant, field corn, sweet corn, peppers, peas and okra.

There is an onsite cafe that serves homemade pies, fudge and ice cream – the perfect end to a day on the farm. The barn, pavilion and grounds can be rented for weddings, birthday parties, corporate events and more.

Under COVID-19 safety measures, visitors are not required to have a reservation, but should follow these guidelines:

  • Stay with your group and remember to social distance while in the fields and store.
  • When the store is busy and social distance is challenged, send one group representative into the store to pay for and/or order food and ice cream.
  • There are sinks for handwashing located in the restrooms. Hand sanitizer is located throughout the store.
  • Pick up café orders from the window located outside on the front porch.

The orchards allowed the sisters to carry on the traditions from childhood that they always dreamed of passing on to their own children.

“Some of my fondest memories are the simplest ones involving our whole family: playing in the cottonseed and corn, jumping on hay bales and cotton modules, riding around with my dad to check on pivots or crops and playing in the irrigation with my sisters and cousins,” Young said. “Farming is a difficult life, but the family experiences have made it a wonderful life.”

Young and her husband have three children: Gardner, 10, Sterling, 7, and Cade, 4.

“Gardner has been picking squash with me since he was a baby,” Young said. “He now helps his dad pick and sell watermelons. Sterling wants to start helping me at the local farmers market. Cade is still too young to help on the farm, but he loves to eat the ice cream.”

Young sees them creating memories and experiences like she had with her sister as a child.

“I hope they all want to play a role in either the orchard or the family farm one day, but only if that is where their hearts lead them,” she said. “Right now, they are growing up the same way I did and enjoying the simple joys of childhood on the farm.”

The sisters continue looking for ways to enhance the orchards and develop the business. Plans are in place for planting blackberries, expanding the peach orchard and increasing the strawberries plants.

To learn more about Backyard Orchards and plan a family outing, visit the website or follow them on Facebook.

(Courtesy of Alabama News Center)

21 hours ago

Alabama native Rachel Baribeau is Changing the Narrative and expanding her own

Sportscasting is a tough business for anyone, but has been traditionally even more difficult for women. That’s why the change in direction for Rachel Baribeau won’t make sense … until you hear her explain it.

“I am always evolving – as a woman, as a queen, as a daughter and a friend and as a fiancee and a future wife – I am always trying to be better. I’m a lifelong learner.”

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Rachel Baribeau is Changing the Narrative in college sports and beyond from Alabama NewsCenter on Vimeo.

The Auburn graduate and former Pell City resident had a career many would consider perfect: covering SEC football and other sports, from the sidelines and from her college football talk show on Sirius/XM (where she was the network’s first female college sports host).

Baribeau was well-respected enough among her peers to be granted a Heisman Trophy ballot. But it was her work away from the microphone that made the most noise.

“The idea that there is royalty inside of all of us; that there is legacy and purpose and greatness.” Baribeau beams as she describes the impact of the conversations she had been having with college athletes.

Changing the Narrative” was Baribeau’s passion project – a movement that promotes positive mental health and inspiring people to build a positive legacy for others. She took her “Purpose – Passion – Platform” message on a nationwide tour of college football programs, filled with candid heart-to-heart conversations.

After spending four years on this consulting journey, Baribeau announced last October that she would be walking away from sports to concentrate on Changing the Narrative full time.

“I started with this desire and belief that athletes could trend for something other than bad news,” Baribeau said.

Now a nonprofit, Changing the Narrative has expanded further. Baribeau is now in demand in locker rooms, board rooms, law enforcement agencies and entire athletic conferences. “We already have the Big Ten on board; how great would it be to be in all of the Power Five conferences?”

Baribeau is scaling the program in several ways. First, the pandemic has forced a shift to more online training and modules. Second, the material is being tweaked to skew younger for high school audiences. Finally, Baribeau is training a network of other speakers including former athletes who can bring their own experiences of Changing the Narrative to even more audiences.

(Courtesy of Alabama News Center)

21 hours ago

Alabama entrepreneurs can apply now for Walmart’s Open Call for products

Walmart’s seventh annual Open Call is underway for entrepreneurs dreaming of landing U.S.-manufactured products on Walmart shelves by successfully pitching their wares to company officials during online meetings.

“Walmart’s Annual Open Call event gives us a unique occasion to identify new suppliers who can meet our customers’ needs with unique and innovative products manufactured or produced in the U.S.,” said Laura Phillips, Walmart senior vice president for Global Sourcing and U.S. Manufacturing.

“During this year of unprecedented challenges for U.S. businesses, Walmart remains committed to sourcing products made, grown or assembled in the U.S.,” Phillips said.

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In 2013, Walmart announced a 10-year commitment to help boost job creation and U.S. manufacturing through buying an additional $250 billion in products supporting American jobs. Walmart’s Open Call is one way the company continues to invest in the commitment.

“By Investing in products that support American jobs, we are able to bring new exciting products to our customers, support new jobs in our local communities and invest in small business across the country,” Phillips said.

The Open Call, scheduled for Oct. 1, kicks off Walmart’s celebration of U.S. Manufacturing Month and will include programming similar to previous years. In addition to one-on-one pitch meetings with Walmart buyers, participants will have an opportunity to hear directly from Walmart executives and learn from company leaders during small breakout sessions designed to inform, empower and encourage suppliers.

“For the first time, this year’s Open Call event will be virtual, enabling even broader participation from potential new suppliers,” Phillips said. “We know how important this opportunity is for many small businesses, especially this year, and we are looking forward to seeing the new product submissions and meeting potential new suppliers.”

This year’s Open Call attendees could secure deals ranging from a handful of stores in local markets to supplying hundreds, or even thousands, of stores, Sam’s Clubs and on Walmart.com.

Gwen Hurt, owner of Shoe Crazy wine, participated in Walmart’s 2018 Open Call, where a Walmart buyer decided to test her product in 66 stores.

“We were walking into an entirely new and welcoming world,” said Hurt. “Everyone was so professional and kind throughout the process.”

“We’ve been thrilled to work with Walmart and are excited about the continual growth of our product,” Hurt continued. “Thanks to this relationship, we’ve been able to expand our operations to 15 employees while reinvesting in our community through the purchase of a once-abandoned warehouse and additional resources.”

“It’s a dream come true for our family,” Hurt said. Walmart is expanding Shoe Crazy Wine to 118 stores across Virginia, North Carolina and Georgia.

The deadline to apply to participate in this year’s Open Call for U.S.-manufactured products is Aug. 10. The application and information about the event are at Walmart-jump.com.

Information about Walmart can be found by visiting corporate.walmart.com, on Facebook at facebook.com/walmart and on Twitter at twitter.com/walmart.