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.

7 hours ago

Are you afraid to answer the phone?

Millions of Americans fear answering their phone due to a plague of billions of robocalls. These calls have made a mockery of the national Do Not Call Registry and touch on several public policy questions.

We had seemingly ended the problem of unwanted telemarketing calls. Congress authorized the Do Not Call Registry in 2003 after more than a decade of calls disrupting the peace and quiet of our homes. Fines of $11,000 per violation largely put telemarketing companies, with hundreds of thousands of employees, out of business.

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Why have unwanted calls returned? VOIP technology (voice over internet protocol) allowed anyone with a computer and an internet connection to make thousands of calls. A handful of responses can make thousands of calls worthwhile when the cost is almost zero. Furthermore, technology makes robocallers mobile and elusive.

By contrast, telemarketing firms employed hundreds of people at call centers. The authorities could find and fine telemarketers. Firms had to comply with the Do Not Call registry, even if forced out of business.

Technology further frustrates the control of robocalls. Spoofing makes a call appear to be from a different number. Spoofing a local number increases the chance of someone answering, defeats caller ID, and makes identifying the calls’ source difficult.

By contrast, technology allowed the elimination of spam email. It’s easy to forget that fifteen years ago spam threatened the viability of email. Email providers connected accounts to IP addresses and eventually identified and blocked spammers. Google estimates that spam is less than 0.1 percent of Gmail users’ emails.

The Federal Trade Commission (FTC) banned almost all robocalls in 2009 (political campaigns and schools were excepted). Yet the volume of calls and complaints from the public rise every year. And the “quality” of the solicitations is lower: legitimate businesses employed telemarketers, while most robocalls seem to be scams.

Telephone companies and entrepreneurs are deploying apps and services to block robocalls. The robocallers then respond, producing a technological arms race. The technology of this arms race, however, is beyond me.

I’d rather consider some issues robocalls raise. The root of the problem is some people’s willingness to swindle others. Although we all know there are some bad people in the world, free market economists typically emphasize the costs and consequences of government regulations over the cheats and frauds who create the public’s demand for regulation. People can disagree whether a level of fraud warrants regulation, but free marketers should not dismiss the fear of swindlers.

Robocalls also highlight the enormous inefficiency of theft. Thieves typically get 25 cents on the dollar (or less) when selling stolen goods. Getting $1,000 via theft requires stealing goods worth $4,000 or more. In addition, thieves invest time and effort planning and carrying out crimes, while we invest millions in locks, safes, burglar alarms, and police departments to protect our property. America would be much richer if we did not have to protect against thieves or robocallers.

Finally, having the government declare something illegal does not necessarily solve a problem. Our politicians like to pass a law or regulation and announce, “problem solved.” Identifying and punishing robocallers is difficult; the FTC had only brought 33 cases in nearly ten years. And less than ten percent of the over $300 million in fines and relief for consumers levied against robocallers had been collected. Government has no pixie dust which magically solves hard problems.

The difficulty of enforcing a law or regulation does not necessarily imply we should not act. The Federal Communications Commission, for instance, recently approved letting phone companies block unwanted calls by default, and perhaps this will prove effective. We should weigh the costs of laws and regulations against a realistic projection of benefits and laws failing to solve problems as promised should be revised or repealed.
Still, a law that accomplishes little can have value. Cursing robocalls accomplishes little yet can be cathartic. A law that costs little might provide us satisfaction until technology solves the problem.

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.

8 hours ago

VIDEO: Culverhouse vs. UA, Trump and Biden battle in Iowa, the Bentley saga could be over and more on Guerrilla Politics

Radio talk show host Dale Jackson and Dr. Waymon Burke take you through this week’s biggest political stories, including:

— Why did the media get the story with Hugh Culverhouse, Jr. and Alabama so wrong?

— Is the Iowa slap-fight between President Donald Trump and former Vice President Joe Biden a 2020 preview?

— Now that former ALEA head Spencer Collier has settled his case with the state over his firing, is the sordid Bentley saga over?

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Jackson and Burke are joined by State Representative Mike Ball (R-Madison) to discuss medical marijuana, the prison special session and the lottery.

Jackson closes the show with a “parting shot” that calls out Joe Biden for lying about the lack of lies and scandals in the Obama administration.

VIDEO: Culverhouse/UA, Trump and Biden battle in Iowa, the Bentley saga could be over and more on Guerrilla Politics

Posted by Yellowhammer News on Sunday, June 16, 2019

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

9 hours ago

Alabama team targets international connections at SelectUSA Investment Summit

Alabama is home to a diverse lineup of international companies, and the state’s business recruiters are looking to expand those ranks.

The economic development team is in Washington D.C. at the 2019 SelectUSA Investment Summit, which starts today and is the premier foreign direct investment (FDI) event in the U.S.

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FDI is a significant part of Alabama’s economy. Last year alone, it came from 16 different countries, for a total of $4.2 billion in investment and 7,520 new and future jobs.

Since 2013, the state has attracted $12.8 billion in FDI, according to the Alabama Department of Commerce. It’s spread across a variety of sectors, including automotive, aerospace and bioscience.

“Team Alabama is looking to capitalize on a record-breaking year for FDI in the state, by continuing to build partnerships with world-class international companies looking to grow in the U.S.,” said Vince Perez, a project manager for the Alabama Department of Commerce.

SHOWCASING ALABAMA

SelectUSA is led by the U.S. Department of Commerce, and its annual summit regularly attracts top industry leaders and investors from around the globe. This year’s event is expected to draw more than 2,800 attendees from more than 70 international markets and 49 U.S. states and territories.

Participants of the past five summits have announced $103.6 billion in greenfield FDI in the U.S. within five years of attending, supporting more than 167,000 U.S. jobs.

“We are excited to have another opportunity to showcase Alabama’s vibrant business climate that’s been cultivated over the years through business-friendly policies,” Perez said.

“This year’s Investment Summit is very timely as we will be armed with the recently passed Incentives Modernization Act, which upgraded our already-strong incentive tool kit, making us more marketable than ever.”

The measure targets counties that have had slower economic growth. In particular, it expands the number of rural counties that qualify for investment and tax credit incentives. It also enhances incentives for technology companies.

Joining the Commerce Department at the SelectUSA Summit are PowerSouth, the North Alabama Industrial Development Association, the Economic Development Partnership of Alabama, Alabama Power Co., and Spire.

Speakers at the summit will include key government and industry leaders who will discuss opportunities in a broad range of areas and industries, such as energy, infrastructure, agriculture and technology.

FDI supports nearly 14 million American jobs, and it is responsible for $370 billion in U.S. goods exports. The U.S. has more FDI than any other country, topping $4 trillion.

(Courtesy of Made in Alabama)

A ‘Story Worth Sharing’: Yellowhammer News and Serquest partner to award monthly grants to Alabama nonprofits

Christmas is the season of giving, helping others and finding magic moments among seemingly ordinary (and occasionally dreary) days. What better way to welcome this season than to share what Alabamians are doing to help others?

Yellowhammer News and Serquest are partnering to bring you, “A Story Worth Sharing,” a monthly award given to an Alabama based nonprofit actively making an impact through their mission. Each month, the winning organization will receive a $1,000 grant from Serquest and promotion across the Yellowhammer Multimedia platforms.

Yellowhammer and Serquest are looking for nonprofits that go above and beyond to change lives and make a difference in their communities.

Already have a nonprofit in mind to nominate? Great!

Get started here with contest guidelines and a link to submit your nomination:

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Nominations are now open and applicants only need to be nominated once. All non-winning nominations will automatically be eligible for selection in subsequent months. Monthly winners will be announced via a feature story that will be shared and promoted on Yellowhammer’s website, email and social media platforms.

Submit your nomination here.

Our organizations look forward to sharing these heartwarming and positive stories with you over the next few months as we highlight the good works of nonprofits throughout our state.

Serquest is an Alabama based software company founded by Hammond Cobb, IV of Montgomery. The organization sees itself as, “Digital road and bridge builders in the nonprofit sector to help people get where they want to go faster, life’s purpose can’t wait.”

Learn more about Serquest here.

10 hours ago

Alabama Power wins Electric Edison Institute awards for power restoration efforts following Hurricane Michael

The Edison Electric Institute (EEI) awarded Alabama Power with the EEI “Emergency Assistance Award” and the  “Emergency Recovery Award” for its outstanding power restoration efforts after Hurricane Michael hit Alabama, Georgia, and Florida in October 2018.
The Emergency Assistance Award and Emergency Recovery Award are given to EEI member companies to recognize their efforts to assist other electric companies’ power restoration efforts, and for their own extraordinary efforts to restore power to customers after service disruptions caused by severe weather conditions or other natural events. The winners are chosen by a panel of judges following an international nomination process.

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Alabama Power received the awards during the EEI 2019 annual conference.

Alabama Power’s extraordinary efforts were instrumental to restoring service for customers across Alabama, Georgia, and Florida quickly and safely,” said EEI President Tom Kuhn. “We are pleased to recognize the dedicated crews from Alabama Power for their work to restore service in hazardous conditions and to assist neighboring electric companies in their times of need.”

Hurricane Michael, the strongest storm to make landfall during the 2018 hurricane season, was a Category 5 hurricane with peak winds of 160 mph. The storm hit Mexico Beach, Fla., on October 10 before being downgraded to a tropical storm and traveling northeast through Georgia and several Mid-Atlantic states. Alabama Power sent more than 1,400 lineworkers and 700 trucks to help restore service to customers over the course of two and a half months.

Hurricane Michael also resulted in 89,438 service outages in Alabama Power’s territory. Due to their tireless work, Alabama Power’s crews restored power to 100 percent of customers within four days after the storm, dedicating more than 124-thousand hours to the recovery.

(Courtesy of Alabama NewsCenter)