Americans Need Lower Tax Rates and Lifted Lockdowns, Not More Stimulus


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The squabble over whether Congress ultimately votes to send $2,000 checks to American citizens (rather than the $600 allocated in the $900 billion stimulus bill already signed by President Trump) should not distract from the overwhelming failures of government to adequately address hardships created by the pandemic and worsened by many of its policies.

Cash payments are being spun as a lifeline that Congress is magnanimously extending to Americans whose financial welfare has been devastated by the pandemic. Jobs gone and savings depleted, where else are Americans to turn to help but Washington. In a statement urging Senate Majority Leader Mitch McConnell (R-KY) to vote on the bill increasing the size of checks Americans would receive to $2,000, Chuck Schumer (D-NY) described this step as necessary in “helping to meet the needs of American workers and families who are crying out for help.”

This sentiment, though, is an insult to thinking Americans who understand not only that the money they will receive was taken from them in the form of taxation but that unemployment insurance, which the stimulus bill augments, and the checks Congress will send are taxable. 

In reality, Congress is returning a paltry amount of money they’ve seized through taxation to some—not all—Americans, which it will tax a second time, and asking to be treated like heroes who’ve warded off some terrible existential threat.

The severity of the economic turmoil created by the virus is real enough. Not only have many industries been devastated by restrictions on travel and social gatherings, but high levels of unemployment mean many people have little to no money to spend on anything besides the essentials. This latter fact bodes ill for the post-pandemic recovery, as does the fact that many states and localities have recently raised the minimum wage. President-elect Biden has also threatened to raise taxes when he assumes office.

In the face of all this, the pettiness of a few thousand dollars granted by a self-aggrandizing Congress is completely inadequate. Instead of fighting over how much money to give back to Americans, Congress’s time would be better spent overhauling the tax code, reducing both personal income taxes and business taxes. Both families and small businesses might be better able to weather economic hardships if the confiscatory hand of the Internal Revenue Service were slapped back.

Another problem with direct cash payments made by the federal government to the American people is that such policies reinforce the idea that it is ultimately the responsibility of government to address all problems that arise in society. This is troubling not only because it encourages Congress to view the income of American citizens as something it can take and redistribute, but because it runs contrary to the idea of federalism.

Critics have blasted President Trump for not taking stronger federal measures to fight the coronavirus, but the executive branch lacks control over states. In fact, the few measures Trump has taken, such as his executive order directing the Centers for Disease Control and Prevention to enact a national eviction moratorium, are already a Constitutional step too far.

States are sovereign, not only guaranteed a republican form of government by Article IV, Section 3 of the Constitution but also granted powers not expressly delegated to the federal government by the Tenth Amendment.

Whereas federally-directed lockdowns would have been a clear-cut violation of the Constitution, states have a much more clear-cut legal ability (though no less controversial) to shutdown businesses during times of emergency. 

It is because of state lockdown policies, some of them enacted more aggressively and unjustly than others, that unemployment rates are so high. It is because of state lockdown policies that many small businesses—as high as one-third in some states—have shut their doors for good.

It should be the states that are responsible for bailing citizens out of the disaster created by over-zealous lockdown policies.  The current focus of American politics on the amount of money Congress will send to help residents who are victims of bad state policy absolves too many governors and state legislatures of their responsibility for turning the coronavirus into an economic crisis as well as a health crisis.

Thanks to incredible actions taken by scientists working towards a vaccine, the coronavirus will one-day fade from the forefront of the American mind. The relief brought by cash bailouts to struggling Americans will also quickly fade. But the precedents set by the government’s response to the pandemic will not. 

With its current policies, Congress is currently laying the groundwork for future cash payments to American citizens, further eroding states’ responsibility to their residents and normalizing the idea that the federal government has a right to use private citizens’ income as a resource and to redistribute it where it sees need as being greatest. Whenever the next crisis arises, those in favor of future payments, or permanent policies such as universal basic income, will be able to point to the coronavirus stimulus and claim, factually, that no one objected to distributing money to citizens then.

Instead of relying on a handout from Congress, residents of states whose policies have devastated their careers and economic welfare should be putting pressure on their governors and their legislatures. They should be asking them why they were so short-sighted as to promote lockdowns, ostensibly in the name of public health, without a plan to protect the economic health of their constituents.

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