Ransom Payment? Biden Administration Sending $64 Million In Taxpayer Dollars To Taliban Controlled Afghanistan

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In a press report, the Biden Administration announced that it is sending $64 million dollars to Taliban Controlled Afghanistan. According to the report:

“Today, the United States announced nearly $64 million in additional humanitarian assistance for the people of Afghanistan. This funding from the U.S. Agency for International Development (USAID) and the U.S. Department of State will flow through independent organizations, such as UN agencies and NGOs, and provide life-saving support directly to Afghans facing the compounding effects of insecurity, conflict, recurring natural disasters, and the COVID-19 pandemic.”

“This payment is highly suspicious,” noted Matthew Schultz, executive director of Taxpayers United of America. “We know from recent testimony from Secretary of State Antony Blinken that roughly 100 American citizens who want to leave Afghanistan remain in the country as of the end of last week. We also know for a fact that the Taliban have hampered US civilian efforts to leave the country.”

 “If this is not outright a ransom payment, then what else is it? Assuming that any of this money actually reaches people, and is not just intercepted by the Taliban, than what does it achieve? Afghanistan is in chaos. There is a drought in the country, police have been replaced with Islamic radicals, and banks are limiting withdrawals due to a fear of a bank run. Infusions of ‘aid’ into the economy would help stabilize the country, and strengthen the Taliban’s control.”

“In essence, no matter who the money goes to in Afghanistan, it will help the Taliban.”

“The only way to know if this really is a ransom payment is to see what happens next. Either way, the situation is ridiculous. Taxpayers pay enormous amounts of money to the government to ensure our safety and security. Indeed, a large portion of our tax bill goes to fund the greatest military force in the world. To think that despite all the money that we pay for all these ships, planes, and tanks, that hundreds of Americans are left behind enemy lines is absurd. The notion that we have to pay even more as a ransom to those that helped terrorists ram planes into our buildings is disgusting.”


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A report just issued by the nonpartisan Washington-based Tax Foundation states that although the president’s Council of Economic Advisers released a blog post arguing that the Biden administration’s spending agenda would help keep long-term inflation in check, their major financing options will reduce productivity growth.

The main point of the Biden administration’s argument is that the infrastructure bill is a supply-side policy that will increase economic productivity, writes the foundation’s Alex Muresianu. In theory, it may be true that a shift of the supply curve outwards means an increase in output and a decline in prices.

Other administration supporters have argued for infrastructure from a more demand-side perspective: by increasing government spending, consumers will have more income to spend. When they spend more, then businesses and individuals they purchase goods from will have more money to either consume or invest. This is known as the Keynesian multiplier effect.

“This debate has an important mirror in the economics of tax policy,” writes Muresianu. “As my former colleague Scott Greenberg described in 2017, there are two theories of tax reform, as described by politicians.”

The first theory is the “folk theory.” Under the folk theory, tax cuts can stimulate the economy by “putting more money in people’s pockets.” Cutting taxes raises disposable income, leading to more consumption and investment; raising taxes reduces disposable income, and therefore reduces consumption and investment.

“All that matters is the bottom-line net change in government revenue,” states the report “In this regard, temporary tax cuts are just as helpful as permanent tax cuts, as they end up raising incomes immediately.”

The second theory is the neoclassical theory, the supply-side view. Under this theory of tax reform, taxes impact the economy by changing marginal incentives, not by raising the amount of income available to spend. The benefit of a lower tax rate is not from raising spending: with a lower tax rate, the returns to work and investment are higher, and thus people and firms choose to work and invest more.

These theories are not mutually exclusive, states the report. The folk theory is useful in times when the economy is “below potential,” such as in a recession when demand is depressed. However, when designing “normal” policy over the long term, the neoclassical framework is a better model.

While the case the White House is making for the infrastructure package is more in line with the neoclassical framework, they should design the tax policies used to fund it under the same principles. If the goal is to stimulate long-term economic growth, raising the corporate income tax rate would be counterproductive, given how private capital investment is sensitive to tax changes.

According to the report, it would make sense to fund infrastructure with user fees, such as tolls, the gas tax, or a tax on vehicle miles traveled. Those funding sources would have a smaller impact on long-term private investment, and in some cases, encourage infrastructure investment to be targeted towards places it will be most productive in terms of usage.

The report concludes, “The Biden administration does have a point about how some components of the infrastructure bill could put downward pressure on inflation in the long term. However, the taxes chosen to pay for those investments would counteract those effects, by reducing investment and productivity growth.”

Source: https://taxfoundation.org/infrastructure-bill-taxes-inflation/


A report just released by the nonpartisan Washington-based Tax Foundation reveals that the so-called
Democrat “reconciliation” bill, H.R. 3, could contain changes that would reduce private R&D within the
pharmaceutical industry and reduce the number of new drugs coming to market.

“Instead of hampering medical progress, policymakers should work to ensure that the tax code remains
conducive to R&D spending and the resulting innovation,” writes the foundation’s Erica York.

H.R. 3, the Elijah Cummings Lower Drug Costs Now Act, would allow the government to set prices for
prescription drugs under Medicare Part D using excise tax penalties of up to 1,900 percent for

The report explains that the technological advancements that allowed many employees to work from
home and patients to seek medical care remotely throughout the COVID-19 pandemic would have been
impossible without earlier investments in research & development (R&D). Likewise, thanks to decades
of R&D in the pharmaceutical industry and the resulting technological breakthroughs, nearly every adult
in the United States has access to safe and effective COVID-19 vaccines.

In 2018, the pharmaceutical industry invested about $129.5 billion in medical and health R&D,
compared to $43 billion from federal agencies. The Congressional Budget Office (CBO) reports that the
pharmaceutical industry spends a relatively large share of its revenue on R&D, even compared to other
knowledge-based industries, such as semiconductors, technology hardware, and software.

Doug Holtz-Eakin of the American Action Forum argues that “The real issue is that the drug industry
would be much, much less attractive as a location for risk capital.”

A 2021 study by Vital Transformation anticipates that on average, H.R. 3 would cause a loss of $102
billion in revenue per year and a 90 percent or greater reduction in the number of medicines developed
by smaller and emerging businesses, or 61 fewer medicines over ten years.

The foundation’s report concludes that “It would be unwise for lawmakers to use government-set
pricing under the threat of steep excise tax penalties as a way to pay for reconciliation or address
prescription drug prices. It would come at the cost of R&D, innovation, and the resulting improvements
in health outcomes.”

Source: https://taxfoundation.org/hr3-prescription-drug-bill-innovation/