Can avoiding tax cuts protect you from COVID?
It sounds like a strange question, unless you’ve actually read the COVID-19 relief bill. And few people have.
Most Granite Staters have no idea what’s in the $1.9 trillion American Recovery Act, other than the highlights: $1,400 checks for people earning $75,000 or less ($2,800 for couples earning up to $150,000), billions of dollars for states and municipalities ($350 billion, to be exact) and billions more ($129 billion) to schools.
Few of Senator Hassan’s constituents know she voted for a special $1,400 a week child care benefit just for federal employees. Not many of Rep. Chris Pappas’ voters are aware of his support for sending COVID relief checks to incarcerated criminals like NH cop-killer Michael Addison.
And while President Joe Biden insists that “Everything in this bill is designed to relieve the suffering and meet the most urgent needs of the nation,” the left-leaning Politifact website confirms only one percent of the money goes to vaccines. “At the high end, direct COVID-19 spending represents about 8.5% of the bill’s $1.9 trillion cost,” writes fact-checker Jon Greenberg.
But of all the strategies to confront the COVID-19 pandemic in the Democrats’ bill, none is as innovative as stopping states from cutting tax rates. Forget hydroxychloroquine. The new way to defeat COVID is with higher taxes.
As the Wall Street Journal reports:
The bill explicitly bars states from cutting taxes. States “shall not use the funds,” the bill says, “to either directly or indirectly [our emphasis] offset a reduction in the net tax revenue” that results “from a change in law, regulation, or administrative interpretation during the covered period that reduces any tax (by providing for a reduction in a rate, a rebate, a deduction, a credit, or otherwise) or delays the imposition of any tax or tax increase.”
How does cutting tax rates cause COVID? If, for example, Gov. Chris Sununu and the GOP legislature succeed in lowering the room and meals tax from 9 percent to 8.5 percent, will they be promoting the pandemic? If not, why are Joe Biden and congressional Democrats punishing the Granite State for doing it?
This post-COVID prohibition on lowering tax rates lasts through 2024. That’s three years states like Massachusetts and New York — already losing revenue to low-tax states like New Hampshire — can stop worrying about competing to keep businesses from moving away.”A recent Pioneer Institute analysis of Internal Revenue Service data found that, between 1993 and 2018, Massachusetts experienced a net outflow of $5.4 billion in adjusted gross income to New Hampshire, which has no state income tax,” write the Institute’s Jim Stergios and Christopher Anderson.
By the way, if higher taxes really are supposed to stop the pandemic, it’s not working. The four states with the highest COVID-19 death rates are New Jersey, New York, Rhode Island, and Massachusetts.
New Hampshire is down at number 44.
What happens if New Hampshire does cut taxes, and then the Biden administration cuts — or demands repayment of — COVID aid to schools or the healthcare system? All four of New Hampshire’s members of Congress voted for it. Will they support it if Biden sends Treasury Secretary Janet Yellin to actually do it?
All four declined repeated requests for comment.
