The plague of coronavirus has now afflicted the world for several months, with many people suggesting ways to win the covid conflict. People have encouraged hand washing, facemasking, avoiding others like the plague, closing down schools, churches, and strip clubs, etc., in our effort to claim victory over the virus. Unlike seemingly the vast majority of everyone, I have no expert opinion on those matters. However, there have been several suggestions for tax policies to help in the covid crusade, fighting against the ailment abated economic adversity we are facing. What are these new and innovative ideas crafted since the advent of the virus to help us get our economy back on its feet?
From one side, we have been told that the current pandemic calls for taxing mansions and second homes, wealth taxes, raising taxes on high-income individuals, or increasing corporate tax rates. From the other side, we have been told that cutting payroll taxes or capital gains taxes would help solve our plague-related problems, increasing corporate taxes would hinder coronavirus relief efforts, increasing the availability of certain deductions would help, and expanding the availability of a tax incentive that eliminates capital gains taxes for mostly wealthy taxpayers would certainly be a cure for the covid-caused calamity. Criticizing one side of these proposals, Karl Smith (a former UNC econ professor, and current Tax Foundation vice president), noted “A running joke in Washington is that Republicans’ preferred solution to any problem, whether a recession or an alien invasion, is to cut the capital gains tax.”
Do these solutions sound new and innovative? Of course not. They are exactly the same well-worn economic policies these groups have been pushing for decades. Maybe they have merit, maybe they do not. But, these groups are avoiding the merit-based logical arguments for furthering these policies, and trying to sneak them into law in the current political covid chaos. Like with any other crisis of any sort, groups of all types are coming out of the woodwork to use the crisis to push their same agenda. As Rahm Emanuel noted, channeling many others, “Never allow a good crisis go to waste.” These groups’ eagerness to try to use the crisis to pass these policies makes me personally question the sincerity of the concern they have about the virus, as well as the seriousness of the arguments they make in favor of these tax policies.
