When the great white U.S. Navy Hospital Ship sailed out of New York Harbor recently without even one of its thousand beds being used by a COVID-19 patient, that was evidence that the socialists/progressives are using the pandemic for their political and government spending purposes. They are using fear and hysteria as weapons to paralyze many Americans and to stall revitalization of the U.S. economy, which resulted from the successful Tax Reform and Jobs Act of 2017.
We must tell the story of tax reform’s restoration of the American economy and its benefits to average Americans to counter the mantra of The New York Times and The Washington Post that tax reform only helped large corporations, the wealthy and Wall Street. The National Tax Limitation Committee and its tax expert allies who helped pass the tax reform legislation are launching the tax reform education project nationally to tell this story. Broadened popular understanding of tax reform would help speed our nation’s return to normalcy and a booming economy.
Meanwhile, House Speaker Nancy Pelosi and company are demanding a fourth bailout bill — this time spending $3.4 trillion — to cover blue-state pension overspending and voting by mail legislation (nothing to do with COVID-19). And they want to extend to January the “unemployment bonus” of $600 a week that is already incentivizing millions of low-paid restaurant and hospitality employees to not return to work. We must have these Americans back at work as soon as possible, so we must block this stupidity.
America is now entering a depression as evidenced by the official April unemployment report from the Bureau of Labor Statistics (BLS). Unemployment hit 14.7 percent, the highest since the Great Depression. The BLS reported more than 20 million Americans were thrown out of work in April, with over 30 million having applied for unemployment compensation to date, erasing all the job gains over the last decade. That has been the result of the coronavirus scare.
The public health power is allocated to the states under our Constitution. Some governors seemed giddy when they issued stay-at-home orders, commanding lockdowns of businesses, large and small, and throwing people out of work. They believe the longer this lasts the better their political prospects.
But many governors who have kept their people locked up are feeling the pain. Gov. Gretchen Whitmer, Michigan Democrat, has experienced a popular uprising in Lansing, while her state legislature has rebelled with its own favorable response to those who want to return to work. Recently, Colorado’s Gov. Jarod Polis, a Democrat, ordered closed a small local restaurant that opened for Mother’s Day. He is now feeling political heat.
But perhaps the most startling example of free market — and “let me work it out” — sentiment is in California, where Elon Musk, creator of Tesla Manufacturing, who stopped production of his cars on March 23, has resumed auto production in the Silicon Valley despite the edicts of Gov. Gavin Newsom and Alameda County to the contrary. Mr. Newsom and the county have backed down now that Mr. Musk threatened to move his factory out of California.
Mr. Newsom’s rules have included closing beaches in Southern California (where breezes blow, people stand and sit apart, and surfers ride separately). Common sense is the major casualty of governors like Mr. Newsom, Ms. Whitmer and Mr. Polis.
The only answer is to restore booming economic growth. Four times in the last 100 years America has followed pro-growth economic policies: The Roaring Twenties, the Kennedy Sixties, the Reagan Eighties (with the booming growth continuing for 25 years until late 2007), and the last three years under President Trump.
Now we need a similar program. We cut taxes for all workers and taxpayers in the 2017 Tax Reform and Tax Cut Act. We need to build on that by providing a payroll tax holiday until the end of the year, cutting taxes both on working people and their employees, as urged by economists Art Laffer, Steve Forbes and Steve Moore.
We also need expensing (immediate deductions rather than arbitrary depreciation for as long as 30 years) for all investment in plant and equipment in the U.S. That will provide an incentive for American companies to bring their supply chains back to the United States.
We should also index capital gains for inflation, which the Treasury can do by regulation without Congress. That will open up investment so capital can be reallocated to its most productive uses.
This is an agenda to get America booming again, ASAP. It is time to reopen and get America back to work using the Swedish model of common sense social distancing and testing. Every day we wait we hurt our entire nation and all our citizens.
• Lewis K. Uhler is founder and chairman of the National Tax Limitation Committee and Foundation. Peter J. Ferrara is a senior policy adviser for the foundation and teaches economics at Kings College in New York.