International Policy Digest: How Manchin’s Tax Stitch-Up Could Put America Behind China in the Race for 5G

The myopic move for a book minimum tax aims to squeeze more taxes out of big corporations in the short term, at the expense of the long-term interests of American businesses, consumers, and even the government.

Published by International Policy Digest

With the endorsement of West Virginia Sen. Joe Manchin on several key provisions, the behemoth Build Back Better Act grows stronger. On tax, Manchin has given his sign-off for a 15 percent minimum ‘book’ tax on corporations. We do not yet have many details about how exactly that will work, but President Biden nonetheless claims that it will raise $313 billion over the course of the next decade.

This myopic move aims to squeeze more taxes out of big corporations in the short term, at the expense of the long-term interests of American businesses, consumers, and even the government. At this point, the U.S. government might as well issue a press release telling global telecom companies that it no longer cares about 5G and that they should take their technology and investment capital elsewhere.

There are plenty of reasons to avoid inflating corporation taxes to begin with. By making it clear that America is a hostile tax and regulatory environment where the IRS is out to get you for every penny it can, companies and investors are dissuaded from keeping their cash on American soil. That is especially true when it comes to emerging sectors such as the cutting edge of telecommunication technologies, where other countries around the world are clamoring to win the attention of the global giants. For America to be competitive, it must avoid shooting itself in the foot unprovoked.

In the case of 5G, the way the Build Back Better Act’s tax provisions are crafted is designed in such a way that it seems to single out those investing in 5G technology for particular punishment. This seems to be an unintended consequence, but it is possible it is motivated by a pernicious and ill-informed desire to punish big corporations for making too much profit during a difficult time for the world economy. Either way, the Act’s provisions are set to place a much higher burden on wireless spectrum investments.

Manchin argues that the provisions under scrutiny do not raise taxes but that instead, all he wants to do is “close the loopholes and collect the taxes that are owed to the Treasury and the [American] people.” In fact, Manchin’s idea of ‘closing loopholes’ involves constricting investment by significantly upping the tax burden placed on companies investing in 5G.

This problem is fundamental to the way this new tax provision operates. The ‘loophole’ it aims to close involves imposing a 15 percent tax on the ‘book income’ of larger corporations – that is, the income they report to investors via financial statements – as opposed to taxable income. Thanks to the way the governing of spectrum licenses – a key component of investment in 5G infrastructure – works, that will disproportionately hit wireless companies who are trying to build out broadband capabilities across the U.S. by affecting the deductions they can make. While America polices 5G investment harshly, China subsidizes it.

It is relatively clear why this is happening. In the midst of an economic crisis in which the cost of living is climbing at an alarming pace for millions of Americans, politicians like Manchin are keen to be seen taking a hard line on economic issues, especially when it comes to giant corporations making even more giant profits.

The problem is that this approach focuses more on virtue signalling than enacting policy solutions which will make a difference for working- and middle-class Americans who are struggling. The new book minimum tax will only dissuade investment, undermine America’s place in the 5G race and make Americans worse off in terms of both tax revenue and access to new technologies in the longer term, all without relieving any of the pressure on working people’s wallets during this difficult time.

Washington Examiner: ‘Jackpot justice’ and multimillion-dollar court verdicts threaten innovation

If you ran an energy drinks company, would you jump out of your seat to sell your products in a country where Red Bull once had to settle a $13 million case because its drink doesn’t actually “give you wings?” America badly needs tort reform.

If you ran an energy drinks company, would you jump out of your seat to sell your products in a country where Red Bull once had to settle a $13 million case because its drink doesn’t actually “give you wings?”

America badly needs tort reform.

Read the full article in the Washington Examiner

RealClear Policy: White House’s Omnishambles Tobacco Policy Gets Product Regulation Wrong

Cracking down on both vaping and smoking is short-sighted and dangerous.

Published by RealClear Policy

Russia just invaded another country and inflation is at a forty-year high, but the Biden administration has determined that the time is right for the federal government to declare war on smokers and vapers.

On the one hand, the White House is attacking smoking by harshly restricting the amount of nicotine tobacco companies can put in cigarettes. On the other, it is also ordering via the FDA that vaping giant Juul stops selling its electronic cigarettes. The justification for that move is the allegation that teenagers are susceptible to nicotine addiction through vaping.

If you had never heard of vaping before and you were told this news, you would be forgiven for thinking vaping is a type of smoking, and that more young people taking up e-cigarettes is fueling an epidemic of young smokers. In fact, the opposite is true.

E-cigarettes are 200 times less likely to cause cancer than smoking and 95% safer overall. Not only is vaping a healthier choice than smoking, but it is also the most effective tool ever discovered for helping people quit cigarettes. 74% of smokers who try to quit using e-cigarettes succeed. That makes it a much better quitting tool than nicotine patches, going cold turkey, and every other tested smoking cessation method. Millions of American vapers are former smokers.

Cracking down on both vaping and smoking is short-sighted and dangerous. They are not equivalent harms. The Biden administration is attacking both the disease and the cure. Banning Juul, one of the most popular vapes on the market, will no doubt force countless vapers back to smoking and potentially prevent millions of current and future smokers from making the switch to e-cigarettes.

Singling out Juul is an illegitimate move. It has little to do with sound health policy — it’s all about the optics. The Juul name is associated with vaping more than any other in the U.S. Banning Juul is a symbolic victory for the Biden administration. The agency is more concerned with virtue signaling and attacking big names than protecting American consumers from harm.

As it turns out, this approach might be unlawful, too. Less than 48 hours after the FDA’s announcement that Juul products would disappear from shelves, the e-cigarette maker successfully filed for a temporary hold in federal appeals court while it appeals the decision. Shamann Walton, a San Francisco regulator who pushed a local vape ban, justified the approach by saying: “If you cut off the head, that kills the body… of what’s harmful to our communities.” Walton unmasks the nanny-state agenda – Juul is under attack not because it did anything wrong or its products are uniquely dangerous, but because its brand represents vaping, which the FDA wants to eliminate altogether.

Attacking vaping to begin with is a flawed approach which reflects a much wider failure in the global tobacco policy debate, led by the World Health Organization (WHO) whose so-called ‘Tobacco Free Initiative’ spends most of its time handing out awards to politicians who have introduced taxes and bans to curb vaping, such as a former Indian health minister. That’s despite vaping being both tobacco-free and the best way out of a tobacco habit for millions.

Lumping smoking and vaping together shows up the fundamental flaws in taking a nanny-state approach to vices like tobacco and nicotine. If the Biden administration truly wanted to make Americans healthier, it would use the tried-and-tested method of informing, educating and providing access to quitting resources — including vapes. Instead, it resorts to pointing at things it does not like and trying to drown them in red tape.

It is impossible to regulate public health vices out of existence. The failed war on drugs has proved that. Even if cigarettes and e-cigarettes were banned tomorrow, there is little evidence to suggest there would be a large decrease in the number of smokers and vapers.

Instead, an enormous black market would pop up overnight. There is a black market for cigarettes already because current cigarette taxes already create a significant price difference between legal and illegal products, but if the White House continues down its current path, illicit trade could boom. People would be unable to buy their products from reputable, licensed vendors, and would instead have to trade on street corners, funnelling money into criminal gangs and no longer knowing what they are putting into their body.

If the government is concerned about teen addiction, the only solution is to properly enforce the law which already bans the sale of nicotine products to minors. By choosing instead to curb adults’ liberties, the Biden administration is betraying smokers, more than half of whom tried to quit in the last year.

Polling shows most smokers are unaware of the health benefits of switching from cigarettes to vapes, which is unsurprising given the volume of misinformation about vaping from the WHO and its fellow travelers, such as Michael Bloomberg. That’s where there is potential to make America healthier — by improving knowledge about and access to vaping, not restricting it.

The nanny-state mentality is a death spiral. Perhaps stoked by the Covid pandemic, politicians seem more certain than ever that it is their God-given duty to protect ordinary people from harmful products at all costs. There is no endpoint to that logic. The WHO believes that sugar should be taxed heavily and that women of childbearing age should not consume alcohol. 

Until we live in an ultra-sanitized society where we wear masks permanently and eat tasteless grey sludge, the nanny state beast will never be satisfied. Instead of indulging it, the Biden administration should treat smokers and vapers like the adults they are. By investing in education and resources rather than new regulations, the White House could help make America healthier without compromising on basic personal freedoms or growing the market for illegal products. 

Jason Reed is the spokesperson for Young Voices and a commentator on public health policy for a wide range of outlets. Follow him on Twitter @JasonReed624.

TCW: Don’t let the eco-maniacs cancel palm oil

Why does the eco-lobby care so much about restricting our access to this innocuous-seeming vegetable oil?

Published by TCW (formerly The Conservative Woman)

THE Mirror recently ran a story claiming that palm oil can contribute to the spread of cancer. That would be very worrying, because palm oil is extremely versatile and is used in everything from shampoo to chocolate. But is it true?

That article in the Mirror is regurgitated from an earlier story in the Guardian, which in turn is lifted from an article in the science journal Nature. All three articles, which are remarkably similar, try to claim that palmitic acid, which is found in palm oil, can exacerbate cancer, but when you dig beyond the headlines, you soon realise that the reports are little more than scare stories.

The truth is that palmitic acid is the most common saturated fatty acid in nature. It is present in plants and animals, and makes up 20-30 per cent of total fatty acid in the human body. An 11-stone man contains almost 8lb of the stuff.

The link to cancer is tenuous at best. The experiment cited was on mice and there is no information about what happens in people. The logic is so stretched you could apply it to almost any ingredient in food that you wanted to demonise. Broccoli, for instance, contains a chemical called acetaldehyde, which is carcinogenic, as do countless other common, harmless foods. Headlines claiming something commonplace has ‘links to cancer’ are almost always political and activist-driven, and this is certainly the case with palm oil.

The rhetoric in the cancer scare articles is part of a much wider campaign against palm oil. Companies and politicians around the world are going out of their way to disassociate from it. Leading the pack is the European Union, which is pushing for palm oil imports to Europe to be banned.

Why does the eco-lobby care so much about restricting our access to this innocuous-seeming vegetable oil?

The answer, unsurprisingly, is virtue-signalling. Many claim to be very worried that palm oil is causing deforestation on a mass scale. Greenpeace even produced an advert claiming that by consuming palm oil, we are destroying orangutan habitats. (The ad was banned for being too political.) But much like the palmitic acid story, the truth about palm oil and deforestation is quite different from what the environmentalists would have you believe.

Palm oil caters to more than a third of global vegetable oil demand but causes just 4 per cent of the deforestation, and that proportion is falling by the week as more sustainable methods are developed. Alternatives such as sunflower and rapeseed use much more land to produce the same amount of oil, making them both worse for the environment (because you have to chop down many more trees to produce them) and considerably more expensive.

Why, then, does the green lobby target palm oil rather than other products? Quite simply, palm oil is widely used (for good reason) so the simplistic Left blames it for all the world’s ills, from cancer to deforestation.

Ninety per cent of the palm oil imported to Europe is certified as sustainable already. Even the World Wide Fund for Nature says that if we care about protecting nature, the best thing we can do is allow the innovation in sustainable palm oil, not attack or ban it.

WWF says: ‘Palm oil is an incredibly efficient crop, producing more oil per land area than any other equivalent vegetable oil crop. Globally, palm oil supplies 40 per cent of the world’s vegetable oil demand on just under 6 per cent of the land used to produce all vegetable oils . . . Furthermore, there are millions of smallholder farmers who depend on producing palm oil for their livelihoods. Boycotting palm oil is not the answer.’

Short-sighted attacks on essential products such as palm oil would be unwise and harmful at any time, but when inflation is rocketing and the price of food and toiletries is already a huge worry for many families, making products more expensive by restricting access to ingredients is positively ludicrous.

Don’t let eco-maniacs cancel palm oil. The consequences for the rest of us would be dire because it would only cause food prices to climb even further and leave more supermarket shelves empty, without doing anything to preserve the natural world. The anti-palm oil campaign is just another round of Project Fear from the green lobby without a basis in fact.