Guest editorial: Congressional candidate lays out plan for ‘fiscally responsible’ federal stimulus
1st Congressional District candidate
This unprecedented global pandemic is disrupting more than our daily lives; it is having severe economic repercussions across multiple business sectors. The Federal Reserve has already lowered rates to 2008 levels and the stock market is falling. With the United States government $23 trillion in debt could a federal stimulus package be designed to have an immediate impact and still be fiscally responsible?
Yes, but with caveats. Stimulus packages must be targeted to be effective. Businesses facing drastic reductions in revenue will need immediate assistance to continue paying their employees to avoid bankruptcy. A $1,000 check paid to individuals will not effectively address these problems. We can do better. As a candidate running for Congress, I propose the following solutions for a smarter, targeted stimulus package:
• Create federal tax credits or make federal reserve interest rates (FMOC) available to banks who offer “hold harmless” loan extensions. Banks who offer this option to their loan customers would need to show extended loan terms of at least two to six months and interest rates tied directly to the FMOC rate to qualify. Allow business loan customers to have a minimal or zero interest payment due during the crisis and principal payments deferred.
• Employment 941 tax payment suspension. Employers would then have 15 to 20 percent of their payroll costs available as immediate stimulus. Quarterly 941 filing requirements would remain, but payments would be temporarily waived.
• If employment levels return to 1st quarter 2019 employment levels by May 2021, hold harmless employer’s unemployment insurance rates by not increasing rates to reflect insurance payouts during 2020.
• There is no need to create additional federal bureaucracy to address COVID-19 needs since charitable organizations already exist. Incentivize immediate contributions through a 1040 line 8a Schedule 1 Part 3 deductions to income. Allow for 2020 donations to be taken on the 2019 or 2020 tax returns.
• This crisis has exposed a serious lack of medical supplies being manufactured and available within the United States. Qualified Small Business Stock exclusions should be expanded from technology companies to include medical supplies and equipment manufacturing companies inside the United States. Allow S-Corporation stocks to also qualify for the federal tax exemption.
• Announce a second round of opportunity zones to be identified and include pharmaceutical and medical equipment manufacturing sites as the primary industry target for qualification.
• Allow federal tax incentives for existing manufacturing facilities converted to medical testing, medical equipment manufacturing or pharmaceutical production.
Our economy was strong before COVID-19 and with strategically targeted stimulus, COVID-19 will be a short bump in the road. Done wrong, federal stimulus will just add to the national debt and do nothing to mitigate the economic slowdown. It is crucial to get this right.
Tina Cannon is a candidate for Congressional District 1, Morgan County economic development director and a business owner with over 20 years of experience in federal and state tax policy.
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