Category: Blog

New Year-End Tax Provisions

5 min read

2020 2021 Tax Law ChangesIn late December, Congress passed the Consolidated Appropriations Act, which in addition to providing COVID-19 relief provisions also included many tax provisions and extenders. The Act contained many COVID-related tax provisions, as well as a slew of extenders ranging from one year to permanent. This article will focus on the miscellaneous tax and disaster relief provisions, which are more applicable to most taxpayers.

Miscellaneous Provisions

Charitable Contributions – For tax years 2020-2022, starting in 2020 non-itemizers can deduct $300 in charitable contributions, and starting in 2021 non-itemizer can deduct $600 for married couples filing jointly.

Full Business Meals Deduction – Typically, business meals are only 50 percent deductible; however, the new tax law provides for a 100 percent deduction for restaurant meal expenses incurred in 2021 and 2022.

Low-Income Housing Tax Credit – Starting in 2021, a 4 percent rate floor is established for calculating credits related to the acquisition of and bond-financed low-income housing developments.

Minimum Interest Rate for Certain Life Insurance Contracts – The bill ties the rates going forward for section 7702 fixed interest rates for life insurance contracts to benchmark interest rates that are periodically updated.

Minimum Age for Distributions – Certain qualified pensions can make distributions to workers who are 59½ or older and still working, with a special allowance for some construction and building trade workers, where the age is lowered to 55.

Modified Charitable Contribution Limits – An extension for one year through 2021 is given for CARES Act increased limits on deductible charitable contributions for corporations and taxpayers who itemize.

Disaster Relief

Disaster tax relief provisions are available for individuals and businesses in presidentially declared disaster areas on or after Jan. 1, 2020, up through 60 days after enactment.

Use of Retirement Funds – Residents of qualified disaster areas can take up to $100k in qualified distributions from retirement plans or IRAs, penalty-free. Taxpayers have up to three years to pay the distributions back without penalty.

Disaster Zone Employee Retention Credit – A tax credit of up to 40 percent of wages (capped at $6,000 per employee) is available to employers who are actively engaged in a trade or business in a qualified disaster zone.

Disaster Relief Contributions – Corporations are allowed qualified disaster relief contributions of up to 100 percent of their taxable income for 2020.

Tax Extenders

Aside from the miscellaneous and disaster relief provisions, the act extended numerous existing tax laws anywhere from one to five years or even permanently. Below is a list of the extended provisions. Due to the number of extender provisions, only a table is provided below.

One-Year Extensions

  • Sec. 25C 10% credit for qualified nonbusiness energy property.
  • Sec. 30B credit for qualified fuel cell motor vehicles.
  • Sec. 30C 30% credit for the cost of alternative (nonhydrogen) fuel vehicle refueling property.
  • Sec. 30D 10% credit for plug-in electric motorcycles and two-wheeled vehicles.
  • Sec. 35 health coverage tax credit.
  • Sec. 40(b)(6) credit for each gallon of qualified second-generation biofuel produced.
  • Sec. 45(e)(10)(A)(i) production credit for Indian coal facilities.
  • Sec. 45(d) credit for electricity produced from certain renewable resources.
  • Sec. 45A Indian employment credit.
  • Sec. 45L energy-efficient homes credit.
  • Sec. 45N mine rescue team training credit.
  • Sec. 163(h) treatment of qualified mortgage insurance premiums as qualified residence interest.
  • Sec. 168(e)(3)(A) three-year recovery period for racehorses two years old or younger.
  • Sec. 168(j)(9) accelerated depreciation for business property on Indian reservations.
  • Sec. 4121 Black Lung Disability Trust Fund increase in excise tax on coal.
  • Sec. 6426(c) excise tax credits for alternative fuels and
  • Sec. 6427(e) outlay payments for alternative fuels.
  • The American Samoa economic development credit (P.L. 109-432, as amended by P.L. 111-312).

Two-Year Extensions

  • Sec. 25D residential energy-efficient property credit (the bill also makes qualified biomass fuel property expenditures eligible for the credit).
  • Sec. 45Q carbon oxide sequestration credit (through 2025).
  • Sec. 48 energy investment tax credit for solar and residential energy-efficient property.

Five-Year Extensions

  • Sec. 45D new markets tax credit.
  • Sec. 45S employer credit for paid family and medical leave.
  • Sec. 51 work opportunity credit.
  • Sec. 108(a)(1)(E) gross income exclusion for discharge of indebtedness on a principal residence.
  • Sec. 127(c)(1)(B) exclusion for certain employer payments of student loans.
  • Sec. 168(e)(3)(C)(ii) seven-year recovery period for motorsports entertainment complexes.
  • Sec. 181 special expensing rules for certain film, television, and live theatrical productions.
  • Sec. 954(c)(6) lookthrough treatment of payments of dividends, interest, rents, and royalties received or accrued from related controlled foreign corporations under the foreign personal holding company rules.
  • Sec. 1391(d) empowerment zone designation.
  • Sec. 4611 Oil Spill Liability Trust Fund financing rate.
  • Sec. 1397A increased expensing under Sec. 179 and Sec. 1397B nonrecognition of gain on rollover of empowerment zone investments are both terminated for property placed in service in tax years beginning after Dec. 31, 2020.
  • The Sec. 1394 empowerment zone tax-exempt bonds and Sec. 1396 empowerment zone employment credit, which expire Dec. 31, 2020, were not extended.

Permanent Extensions

  • Sec. 213(f) reduction in medical expense deduction floor, which allows individuals to deduct unreimbursed medical expenses that exceed 7.5% of adjusted gross income instead of 10%.
  • Sec. 179D deduction for energy-efficient commercial buildings (the amount will be inflation-adjusted after 2020).
  • Sec. 139B gross income exclusion for certain benefits provided to volunteer firefighters and emergency medical responders.
  • Sec. 45G railroad track maintenance credit; however, the credit rate is reduced from 50% to 40%.

Conclusion

The Consolidated Appropriations Act passed in December 2020 not only extended many existing tax laws and instituted COVID-19 relief, but it also changes many typical tax laws (at least temporarily). Taxpayers should pay attention to these year-end tax law changes as they can significantly impact their tax situations.

How Firms Can Restore Balance Sheets to Better Health

4 min read

Covid 19 Restore Balance SheetsAccording to the World Bank Group, for businesses in emerging markets and developing economies, the bottom fourth percentile of the non-financial corporate (NFC) sector saw their balance sheets deteriorate. Looking at these businesses’ Interest Coverage Ratio, the average figure dropped to 0.06 from 0.35 between the fourth quarter of 2019 and in the midst of the coronavirus pandemic’s ongoing effects.

The ICR is a measure of a firm’s ability to repay their debt in accordance to existing obligations, whereby a higher ratio indicates a better ability to do so. This is calculated by dividing earnings before interest and taxes by Interest expense.

With businesses seeing losses of as much as three-quarters of revenue in a three-month timeframe, as McKinsey & Company explains, a “cash war room” needs to be established to address this liquidity crisis. McKinsey & Company wants companies to look at every possible way to improve their financial situation due to their experience with the COVID-19 pandemic.

Cash and Sales Collections

One of the first things McKinsey & Company recommends doing is evaluate current and future cash collections and sales collections. If there’s a large percent of overdue or chronically overdue invoices, shifting employees to collections may provide substantive positive cashflow. However, if a business’s working capital is insufficient, other aspects of the balance need to be addressed to increase business health.

Tackling Debt Obligations

Whether it’s used to maintain operations or for ongoing investments, debt can be a useful tool. However, if a company takes on too much debt and is hit by an unexpected event like the COVID-19 pandemic, severely reducing sales, debt can become a burden for the company. Along with increasing the level of risk for investors, if a company can’t reduce its debt load eventually, it could be forced to declare bankruptcy or default on loans.

However, there are a few things a business can do to tackle its debt. Publicly traded companies can offer more shares for sale. Businesses can contact their lenders to see if interest rates can be lowered, payments can be frozen or spread out over longer timeframes. Reducing staff levels or renegotiating leases on machines or real estate also can free up excess cash burn.

According to the Office of the Comptroller of the Currency, part of the U.S. Department of the Treasury, a March 2020 report titled “Small Business Road Map to Financial Resources” revealed that crowdfunding might be a good alternative to taking on additional loans. Whether a business owner or entrepreneur, they can exchange “token rewards” for donations from individuals without sacrificing any interest in their company’s ownership.

Improve the Balance Sheet’s Current Ratio

Another way to improve one’s balance sheet is to determine the company’s current ratio and make adjustments accordingly.

Looking at the formula, Current Ratio = Current Assets / Current Liabilities, businesses can get an answer quickly.

If the ratio is below 1, then there needs to be some attention paid to figuring out how to better pay debts needed to be paid within 12 months, or short-term liabilities, with current assets or assets convertible to cash within the same timeframe.

Use a sweep account, which is a bank account that transfers money not needed for day-to-day operations into a different, but easily accessible account that earns more interest. Other ways include reducing the need to rent additional space, using machines/cloud services less often, and dialing back labor/marketing.

Taking action, including these for balance sheet health, can increase the chance of business survival during the pandemic and beyond.

Sources

https://blogs.worldbank.org/allaboutfinance/covid-19-and-corporate-balance-sheet-vulnerabilities-emerging-markets

https://www.occ.treas.gov/topics/consumers-and-communities/minority-outreach/small-business-road-map-fin-march-2020.pdf

https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/the-cfos-role-in-helping-companies-navigate-the-coronavirus-crisis

While Many Suffer Financially, Some Manage to Profit off Pandemic

4 min read

Billionaires in CovidThe Federal Reserve recently reported that the 50 richest people in the United States increased their net worth by $339 billion during the first half of 2020. There are two primary contributors to this near-unprecedented level of growth. The first is that many either owned or were heavily invested in tech companies that thrived during the pandemic. Increased technology demands for remote work, online shopping, streaming entertainment, and socially-distanced socializing created a lucrative COVID-19 economy in some sectors.

Another reason is that the U.S. Treasury and Federal Reserve proactively infused the economy with stimulus capital. That helped mitigate long-term market disruption that might have otherwise occurred.

The short explanation of how to leverage assets for greater wealth during a pandemic is to be well-capitalized and invested in the stock market. To wit, over 88 percent of the equity in corporations and in mutual fund shares is owned by the wealthiest 10 percent of Americans. In other words, they’re not sitting on their cash; it is continually working for them.

In fact, nearly every tragedy has some form of silver lining investment opportunity. For example, hurricanes, floods, tornadoes, and earthquakes are good for the construction and contracting industries. The pandemic is interesting because it has large and almost exclusively benefited technology companies – in as much as they serve other industries.

The obvious pandemic winners are streaming services such as Amazon and Netflix, but also consider the proliferation of video conference technologies, online financial services, and telemedicine. All of these innovations existed before COVID-19, but it took a global pandemic for them to become mainstream services. Moreover, it is unlikely that their popularity will wane once the virus is contained. After all, we love convenience, and few things are more convenient than being able to conduct daily activities – such as work and doctor’s appointments – from the comfort of your own home.

But just as the coronavirus boosted fortunes in many market sectors, it depressed others, such as cruise lines, movie theaters, and airline stocks, as well as oil prices. Unless you have a crystal ball, it’s always a good idea to diversify your portfolio across a variety of asset classes and market sectors. That way losses in some investments are likely to be offset by gains in others.

In recent years, the wealthy also have benefited from generous tax breaks provided by the Tax Cut and Jobs Act. To diversify gains achieved during the pandemic, they may take advantage of provisions from this legislation, such as the conservation easement charitable deduction. This can be claimed when purchasing land with strong development potential and then donating it to a land trust or government agency. This might create a higher tax deduction based on the appraised value. A similar approach can be used with the Opportunity Zone tax break. This eliminates taxes on capital gains earned from long-term investments in businesses or developments in specific low-income areas of the country.

Rest assured, while vaccines will lead the way to recovery from the pandemic, other crises will follow – as will opportunities to make money on them. Some of them are even easy to predict. After all, the exacerbation of climate change is evident in the increase and severity of extreme weather events. This offers two avenues for an investment opportunity. The first is reactive, such as rebuilding what has been damaged or destroyed. The second is preventive, which means investing in renewable energy resources that reduce carbon emissions, such as solar, wind, hydro, tidal, geothermal, and biomass energy solutions.

It is important to recognize, however, that we can’t always predict what type of crisis will happen next. Therefore, it is inadvisable to try to time the market for investments, particularly when saving for a long-term goal such as retirement. Instead, consider aligning your assets with investments that help build a stronger society, such as sustainable energy, technology advances, and healthcare innovation.

The biggest takeaway here is that the key to crisis opportunism is to be well-capitalized with liquid assets that can repositioned quickly. It is no accident that economic declines are often most advantageous to the extremely wealthy. If you were able to save more money during the pandemic due to less opportunity to travel or spend on other indulgences, consider using this windfall to position your investment portfolio for crisis opportunism in the future.

How to Budget During a Pandemic

4 min read

How to Budget During a PandemicRight now with everything that’s going on, navigating your finances might feel overwhelming. However, there are some strategies that will help you manage cash shortfalls. Mariel Beasley of Duke University’s Common Cents Lab offers ways to help you manage during these trying times.

Use Mental Accounting

Translated, this means prioritizing what’s most important and cutting back in those areas that aren’t. While pretty obvious, the finer point according to Beasley is this approach will help you stick to your spending plan by reminding you of your opportunity costs — i.e. what trade-offs you might be making with each purchase. For instance, you might not be able to buy that special something you’ve had your eye on, but you will be able to buy food. Here are the three buckets she recommends for your budget:

  1. Your Bills: Non-negotiable monthly bills like rent, mortgage, utilities, child care, car payment, insurance, phone, and internet.
  2. Weekly Expenses: These costs might vary, but they include groceries, gas, food delivery, and other miscellaneous expenses.
  3. Future Expenses: What’s leftover after you pay your bills and current expenses? Even if you think you don’t have much left, set aside this cash for an emergency fund or retirement savings in high-yield saving accounts like the American Express® High Yield, or Marcus account by Goldman Sachs. Alliant Credit Union even offers a 0.55 percent interest rate on savings accounts. By comparison, the national savings average is 0.05 percent APY. Make sure your money works as hard as it can.

Try Per-Spend vs. Per Month

Instead of budgeting $200 for groceries for the whole month, decide how many times you’ll go to the supermarket during the month (five times), then stick to a per trip budget ($40). You might not spend as much as you think you will. (Tip: Buy store brands, as they’re cheaper and just as good.) Whether you work a job that pays you regularly, you’re on unemployment or you’re living on Social Security, Beasley says that this will help you stretch your money longer between paychecks.

Think Ahead

This might seem like a no-brainer, but it bears repeating. Instead of waiting until you’re at a crisis point, act now to protect yourself. Here are some ways to do this:

  1. Identify Local Food Pantries. Feeding America is a nationwide network that helps you locate a food bank near you. Organizations such as churches and charities are also pitching in, offering everything from food donations to job search assistance. Government programs such as SNAP (food stamps) and Medicaid are options, as well as HEAP (heating your home), should you need something like this.
  2. Have a Plan for Your Rent/Mortgage. If you’re concerned about eviction, understand your rights as a tenant, and most importantly, stay in communication with your landlord. One solution is to get a roommate to share expenses. If you’re running behind on your mortgage, seek out help from your mortgage broker. One way to generate income is to rent out an extra room in your home. If you have family or friends who can help, reach out to them. While the latter might feel like a last resort, you could consider bartering: provide a service to them they might usually pay for like car washes, dog walking, or house cleaning in exchange for the financial help.
  3. Talk to Your Creditors. Contact your creditors to see if you can get a reduced interest rate on any of your payments. You also might ask for discounts and deferment options. Many card issuers are offering financial hardship assistance (waived late fees, flexibility with payments, even skipped payments) during the coronavirus pandemic.

The key to all this is slowing down and focusing on the basics – getting through each week and each day. While the pandemic might feel like it will never end, it will: it’s inevitable. Until then, these tactics can help you take control and stay afloat.

Sources

https://www.cnbc.com/select/how-to-budget-during-coronavirus/

https://www.nerdwallet.com/best/banking/high-yield-online-savings-accounts

Coronavirus: Credit Card Issuers Offer Financial Assistance (cnbc.com)

How Will the Biden Administration’s China Policy Impact Markets?

4 min read

Biden Administration's China PolicyThe Obama and Trump administrations couldn’t have had a more different approach when it came to U.S. relations with China. As the Institute for China-America Studies (ICAS) explains, under the Obama administration, the United States favored a trade and investment approach when dealing with China, while the Trump administration had a national security focus. The ICAS believes the Biden administration will address trade and economic imbalances through a modified approach, including reducing tariffs on imported Chinese goods over time to decrease inflation for American consumers. Another example is maintaining pressure on China to cut government subsidies for competing industries, currency games, and exporting products to the United States at artificially low prices.

While the Obama administration engaged China through trade and investments, it didn’t emphasize engaging the country on the national security side. The Trump administration looked to make American industries independent of Chinese production, especially for rare earth metals, pharmaceutical precursors, etc. With the inauguration of President-elect Biden, the incoming administration is expected to maintain the Trump administration’s quest to give many American industries a fighting chance of survival, albeit how it will be accomplished will likely vary.

The Biden administration is projected to lower tariffs on Chinese imports gradually. This is expected to be done to reduce the tension of the existing trade war. It’s also expected to be done to lower the rate of inflation and help businesses that import input materials from China.

Based on statistics according to the American Action Forum, approximately $57 billion was paid by consumers on an annual basis per 2019 import numbers, due to tariffs instituted by President Trump. This action is likely to increase consumer spending and increase companies’ earnings. However, the Biden administration is still expected to keep other forms of trade pressure on what many believe are unfair trade practices by China.

Biden also is expected to raise the same concerns the Trump administration did regarding Chinese trade and commerce, including China subsidizing its industries, flooding the American market with goods to undercut American producers, and requiring so-called forced technology transfers from U.S. companies.  

However, the trade deficit the U.S. has with China isn’t expected to see much attention. This could negatively impact how much China is ultimately expected to import from the United States.

When it comes to colleges and universities, research-based collaboration, and artistic-based areas, relations are expected to be more friendly. However, when it comes to fighting China’s human rights violations, individuals or business entities might be targeted. Based on Vice President-elect Kamala Harris’ proposed Uyghur Human Rights Policy Act of 2020, there’s an expectation the Biden administration will keep the pressure on China.

Beginning in 2017, Biden began to discuss plans for America and how some of America’s crucial industries could be more self-sufficient and less reliant on China. Examples include pharmaceutical products, medical equipment, and rare earth minerals.

Potential actions the Biden administration could implement against China include sanctions; U.S. government-sponsored legal action against Chinese firms; and becoming more involved in the World Trade Organization (WTO) and similar organizations. This is seen by some as the U.S. becoming more in-step with Europe to better pressure China in WTO and related disputes. It might also include courting America’s allies in reducing or prohibiting Chinese investment of domestic industries to make it more difficult for Chinese firms to obtain cutting-edge technology.

While there is no way to accurately predict how the Biden administration will treat China, there will likely be continued pushback on China. How these actions will ultimately impact trade and the markets will be seen in the near future.

Standalone 5G Networks: Potential Vulnerabilities that Could Result in Denial of Service for Customers

4 min read

Standalone 5G Networks5G networks promise high speeds, lower latency, and more robust security compared to its predecessors – and this has created a lot of buzz. As a result, there is a lot of competition among operators to roll out the network while manufacturers are already producing 5G devices.

The deployment of 5G around the world has also been facilitated by a need for always-connected computers, widespread internet of things (IoT), and dependence on smartphones. All of this is constraining the 4G LTE technology.

With the current uptake in remote working due to COVID-19, 5G is expected to see more deployment.

However, despite the promised benefits, there are varying concerns about the potential vulnerabilities of this network. Since there are various security concerns, this article will highlight those involving the standalone 5G networks.

What is 5G Standalone Network?

5G stands for the fifth generation of networks that are designed to address gaps and errors existing in the architecture of previous generation networks. However, its implementation is through a gradual phasing out of the existing networks.

Note that the 5G network involves two streams, which include the standalone (SA) and non-standalone (NSA). The NSA relies on the existing 4G infrastructure because 5G standards are not fully finalized.

On the other hand, the standalone is a completely new, end-to-end 5G network. To offer ultra-low latency and high capacities, service providers will have to fully implement the standalone 5G infrastructure.

Despite the radical and beneficial transformation promised by 5G networks, there are concerns that it might become a multidimensional cyberattack vulnerability.

Vulnerabilities for Subscribers and Mobile Network Operators

Unlike previous networks, 5G is a software-defined network and involves network function virtualization, which makes it more vulnerable.

The previous networks implement hardware choke points because they are centralized and hardware-based; whereas 5G digital routing lacks inspection and control chokepoints.

This new architecture has seen various research carried out to check its viability. As a result, industry professionals and government officials have already raised concern over the network’s security and overall architecture.

An investigation by global cybersecurity firm Positive Technologies focused on 5G standalone core in terms of its architecture security, the interaction of network elements, as well as subscriber authentication and registration procedures.

The examination revealed that “the stack of technologies in 5G potentially leaves the door open to attacks on subscribers and the operator’s network. Such attacks can be performed from the international roaming network, the operator’s network, or partner networks that provide access to services.”

The vulnerabilities were discovered in two protocols that are, PFCP and HTTP/2, which are used in 5G standalone networks.

Exploitation in Packet Forwarding Control Protocol (PFCP) would result in denial of service. This is because the PFCP is used to manage subscriber connections. A PFCP session includes three procedures: session establishment, modification, and deletion. It’s at this point that denial of service can be carried out by attackers through a session deletion request, a session modification request, or redirection of data through a session modification request.

For the HTTP/2, the Positive Technologies research found that an attacker could obtain the network functions profile and impersonate any network service. This is because the HTTP/2 protocol is responsible for vital network functions that register and store profiles on 5G networks. The attacker then would have access to authentication status, current location, and subscriber settings for network access. It’s also possible that an attacker would be able to delete NF profiles, which could result in a financial loss as well as damage subscriber trust.

If not handled correctly, the 5G standalone network security issues will place critical infrastructures such as hospitals, transport, and utilities at risk.

Solution and Conclusion

According to the report, the vulnerabilities would appear due to misconfigurations. With vendors competing to launch 5G networks, attackers will take advantage of poor configurations.

Therefore, it calls for proper configuration of the architecture to stop these types of attacks. Unfortunately, errors still might occur. To detect configuration errors in the networks, regular security audits should be performed.

It’s also vital that apart from ensuring proper equipment configuration, security monitoring, and enhancing the implementation of firewalls are also top priorities.

In conclusion, 5G’s high speeds, low latency, and high bandwidth will be highly beneficial. However, potential security holes could cost more than the cost of implementing this technology. As a business owner considering the 5G network, do not let your guard down just because the new network promises to address gaps and errors in previous generation networks.

Prosecution for Use of Performance Enhancement Drugs, Modernizing Government Technology, and Enhancements for Veterans and Their Caregivers

3 min read

Prosecution for Use of Performance Enhancement DrugsRodchenkov Anti-Doping Act of 2019 (HR 835) – This bill was introduced by Rep. Sheila Jackson Lee (D-TX) on Jan. 29, 2019. The purpose of this legislation is to give U.S. officials the power to prosecute individual athletes who used performance-enhancing drugs at international sports competitions involving American athletes. The legislation has been criticized by the World Anti-Doping Agency (WADA) as undermining the global anti-doping movement based on international cooperation, and because no other nation has extra-territorial jurisdiction in this field. The bill passed in the House in October, the Senate in November, and was signed into law by the president on Dec. 4.

IoT Cybersecurity Improvement Act of 2020 (HR 1668) – This bill requires the Institute of Standards and Technology (NIST) and the Office of Management and Budget (OMB) to establish minimum security standards for Internet of Things devices owned or controlled by the Federal Government. The legislation was introduced by Rep. Robin Kelly (D-IL) on March 11, 2019, passed in both Houses, and was signed into law on Dec. 4.

Information Technology Modernization Centers of Excellence Program Act (HR 5901) – Introduced by Rep. Ro Khanna (D-CA) on Feb. 13, this bill authorizes the establishment of an Information Technology Modernization Centers of Excellence Program. The purpose of the program is to help executive agencies adopt secure modern technology in coordination with the Department of Homeland Security. The program must provide regular reports to Congress. The legislation passed in the House in September, in the Senate in November, and was signed into law by the president on Dec. 3.

Veterans COMPACT Act of 2020 (HR 8247) – Short for Veterans Comprehensive Prevention, Access to Care and Treatment, this bill authorizes a variety of programs, policies, and reports that fall under the Department of Veterans Affairs (VA). Components of the legislation address transition assistance, suicide care, mental health education and treatment, healthcare, and female veteran care. It includes a program to provide education and training for caregivers and family members of veterans with mental health disorders. The bill also establishes a Task Force on Outdoor Recreation for Veterans to recommend public lands or other outdoor spaces to be used for medical treatment and therapy. The bill was introduced by Rep. Mark Takano (D-CA) on Sept. 14. It passed in the House in September, the Senate in November, and was signed by the president on Dec. 5.

Wounded Veterans Recreation Act (S 327) – This bill offers a free lifetime pass to National Parks and Federal Recreational Lands to any U.S. resident who has been medically determined to be permanently disabled (must furnish adequate proof of disability and citizenship or residency), as well as to any veteran with a service-connected disability. It was introduced by Sen. Jeanne Shaheen (D-NH) on Feb. 4, 2019, passed in the Senate in June, the House in November, and was signed into law by the president on Dec. 3.

Transparency and Effective Accountability Measures (TEAM) for Veteran Caregivers Act (S 2216) – Designed to upgrade VA caregiver programs by identifying and formally recognizing caregivers of veterans, and notify them of assistance available under the Program of Comprehensive Assistance for Family Caregivers. The bill also temporarily extends benefits for veterans who are determined to be ineligible for the family caregiver program, including a monthly personal caregiver stipend. This bill was introduced by Sen. Gary Peters (D-MI) on July 23, 2019. It passed in the Senate in November, the House in December, and is currently waiting for enactment by the president.

Looking Ahead to 2021: Hope is Not Canceled

4 min read

Looking Ahead to 2021: Hope is Not CanceledDespite the fresh start that a new year promises, our world hasn’t changed much since last March. We’re still living in a new normal. We’re masking up, working (and schooling) from home, and social distancing. Furthermore, scores of community events and activities have been canceled. However, there is something that’s never been canceled: it’s called hope. Here are a few things to embrace that can lift your spirits and help you navigate all the uncertainty.

Be Happy: The COVID-19 Vaccine is Here

This is incredible news. To date, there are two vaccines: Pfizer-BioNTech and Moderna. Those who receive the Pfizer-BioNTech shot will be given two injections, 21 days apart. Those who receive the Moderna shot also will be given two injections, one month (28 days) apart. Both are given in the muscle of the upper arm and can cause mild side effects. However, clinical trials for both have shown a high level of efficacy. Learn more about each one here. The vaccine will be rolled out in phases. Healthcare personnel and residents of long-term care facilities will be offered the first doses. Learn more about who will get it and when here. The fact that we even have a vaccine available might well be the very definition of hope.

Feel Refreshed: Take a News Break

Since most of us are isolated to some degree, it’s only natural to turn to our devices. Games and social media both have the potential to take your mind off of the pain in our world. However, if you tend to veer toward newsfeeds that feature nothing but bad news (which can be addicting), perhaps it’s time to take a break. According to Verywell.com, a constant stream of sensational or disaster reporting, whether you are exposed actively or passively, can elevate stress levels and trigger symptoms like anxiety and sleep troubles, robbing you of your well-being. So, unplug. Step away from your laptop. Give your phone to a family member, partner, or friend. Get outside and soak in some vitamin D. Re-claim that part of yourself that sees the glass half full.

Ditch the Guilt: Plan Your Cheat Meals

If you’ve been looking to food for some much-needed comfort over the past year, you’re not alone. Being at home just a few feet away from a fully stocked kitchen is tempting every minute! Perhaps some of you have banished any guilt about indulging, but for those who just can’t seem to shake it, choose your moments to indulge. Satisfy your cravings a few times a week or just on the weekends. The less you do this, the more you’ll enjoy it. And when you want to splurge, why not support a local restaurant by ordering takeout? You’ll feel better in no time.

Chill Out: Spend Time Doing Nothing

With everything that’s going on and all the responsibilities of living life and crossing things off our lists, stopping to do nothing might seem counter-intuitive; but often, it’s the best remedy for eliminating stress and restoring your sanity. Carving out time to sit with the feelings you’re experiencing – whether that’s irritation, anxiety, or sadness – can help dissipate them. Take some advice from Winnie the Pooh who said, “Doing nothing often leads to the very best of something.” When you give yourself permission to let go and empty your mind, you’ll be rejuvenated and ready to begin again.

Even though the happenings of 2020 were unprecedented, the truth is you do have a new year ahead. One that can be anything you want it to be. Just grab hold of something that has always been there and will never be canceled: hope.

Sources

https://www.cdc.gov/coronavirus/2019-ncov/vaccines/different-vaccines.html

https://stephanieyounger.com/blog/love-hope-kindness-and-community-have-not-been-canceled

https://www.verywellmind.com/is-watching-the-news-bad-for-mental-health-4802320#:~:text=A%20constant%20stream%20of%20sensational,like%20anxiety%20and%20trouble%20sleeping.

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Paying the Price for Vice: The Evolving Landscape of Excise Taxes in America

4 min read

Excise Taxes in AmericaWhile excise or vice taxes have long been a part of the American tax landscape related to alcohol and cigarettes, the recent invention of vaping and legalization of marijuana and other substances is changing the landscape.

What Are Excise Taxes?

Excise taxes are taxes on specific types of consumable products such as alcohol or tobacco for one of two reasons. First, as vice taxes in order to raise revenue to cover the costs related to consumption; and second, to deter consumption itself. Unlike other types of consumption taxes such as sales tax, these are specific to certain products.

Do They Change Behavior?

Theoretically, when you increase the price of a product such as alcohol through the addition of excise taxes, demand should go down. While this may be a deterrent and limit demand, excise taxes certainly haven’t proven to be a feasible way to eliminate behaviors. A pack of cigarettes can cost upward of $15 in major cities, but there are still people smoking. It’s a similar situation with drinking and gambling.

It’s All About the Benjamins

While we think of excise taxes as vice taxes today in many respects, the main point isn’t to change behavior – it is to raise revenue. Excise taxes pre-date the United States and were one of the main forms of government funding in America before income tax was created. Alcohol taxation goes back to George Washington’s presidency and incited the infamous Whiskey Rebellions. Cigarette taxes were introduced as a way to pay for the Civil War. In the end, it’s about the money generated as there are easier and more effective ways to regulate behavior.

New Products Equal New Taxes

The legalization of marijuana by states raises the issue of excise taxes on this product. Unlike tobacco, where one of the goals is to decrease consumption, the situation here is more one of legalizing something to raise consumption and generate revenue as a result.

Marijuana taxation is more akin to alcohol in the years following prohibition. In both cases, you have large-scale illegal operations and illicit consumption with the aim of moving them to legitimate status. In this sense, it’s different than other vice taxes. 

Initially, at least, the authorized market will have to operate in parallel with the black market for the same product, limiting the amount of taxes that can be raised when there is still an unregulated and untaxed alternative.

Beyond Marijuana

Aside from marijuana, there are other new products that could be taxed and generate revenue, the most notable being vapor products. While vaping products are not really that new, the market is just growing to a substantial size.

Taxing vaping products is more complicated and problematic. Some consider these products to be just as harmful as cigarettes, while others not so much. There is evidence that nicotine consumed via vaping is less harmful than through smoking cigarettes.

Theoretically then, the government should apply less taxes as a result if the harm and therefore cost to society is less.  The problem with this is that less revenue is raised. As noted before, we come back to the issue that vice taxes are often revenue-raising tools disguised as public safety measures.

Too Successful For Its Own Good

Vice taxes can be too successful, with tobacco as the best example. While people may stop buying cigarettes, they don’t stop consuming cigarettes; instead, they buy them elsewhere.

For example, more than 50 percent of cigarettes consumed in New York are purchased out of state. If you push too far, people will react.

Conclusion

Excise and vice taxes are here to stay. While varying arguments can be made that they benefit society by shaping behaviors, it is undeniable that state, local and the federal government are addicted to the revenue generated.

COVID-19 Vaccination Considerations for Employers

5 min read

COVID-19 Vaccination Considerations for EmployersLooking at a 2009 letter from the U.S. Department of Labor, Occupational Safety and Health Administration (OSHA), employers may be able to require their employees to take the COVID-19 vaccine, with a few exceptions (such as the likelihood of a life-threatening reaction to it). With the COVID-19 vaccine being rolled out, how can employers balance workplace safety, maintain productivity and stay within the law?

According to the Centers for Disease Control & Prevention (CDC), the early vaccination stages will likely focus on those who are at particular risk of severe and life-threatening complications from COVID-19. This is expected to include elderly individuals, especially those who live in nursing homes. It’s also expected to include frontline healthcare workers who may be exposed to COVID-19 and could expose patients to COVID-19.

Looking to the Past for Guidance on Employer Vaccine Mandates

The natural question for employers is if and how they are able to mandate a COVID-19 vaccination for employees. When it comes to OSHA and the U.S. Equal Employment Opportunity Commission (EEOC), neither agency has given any actionable guidance on mandating the COVID-19 vaccine.

In light of an Emergency Use Authorization (EUA) for both the Pfizer and Moderna vaccines, further government agency direction is likely to follow over the next few months. Until there is more definitive guidance, the most relevant and likely direction is to look back at how the different agencies handled this same question with the H1N1 epidemic.

U.S. Equal Employment Opportunity Commission

In 2009, the EEOC provided guidance based on the Americans with Disabilities Act (ADA) and Title VII of the Civil Rights Act of 1964, which state that employers are within their right to mandate that workers take the flu shot. However, for workers with disabilities that prevent them from receiving inoculations and for workers objecting to vaccines according to their religious beliefs, their employer must provide a “reasonable accommodation.”

If a reasonable accommodation is available, the employer is responsible for providing it. However, according to the ADA, if a reasonable accommodation is not available; it would create an “undue hardship” for the business; or if the worker would “pose a direct threat” to their coworkers’ well-being and welfare that isn’t able to be reduced via the reasonable accommodation, employers aren’t required to provide that reasonable accommodation.

When it comes to the subjective reasonable accommodation and undue hardship test, the employer must look at the worker’s individual disability, his role and what responsibilities it entails, the type of vaccine being mandated, and the employer’s circumstances. For example, if someone cannot be vaccinated, they may be accommodated by continuing to work remotely, work within the constraints of social distancing guidelines, face masks, etc. However, if the worker’s role requires close contact with others, the ability of the employer to accommodate the employee will be more in question.

Title VII similarly requires business owners who mandate vaccines as a requirement of employment to make reasonable accommodations for workers who assert a sincerely held religious belief, practice, or observance that prevents the worker from accepting a vaccine. In this case, employers may ask the employee who claims a religious exemption for reliable documentation attesting to the religious objection.

Much like the ADA, Title VII also states that if the reasonable accommodation causes an undue hardship, the employer is not required to make such an accommodation. One distinction for this exception under Title VII is that the undue hardship standard is met when the “more than de minimis cost” to the business is reached. For the ADA’s undue hardship threshold to be met, the accommodation in question must create significant difficulty or expense. For employees who have non-religious beliefs that they explain prevents them from taking a vaccination, this is not covered under Federal Law but might be applicable in certain states.

Looking back to 2009, an OSHA letter stated that businesses can require employees to take a seasonal flu vaccine, with some caveats. One exception is if they have a pre-existing medical condition that can cause grave illness or death, they may qualify for an exemption. As the EEOC suggests, asking and not mandating that employees get vaccinated might garner good results before there’s any pushback from a vaccination mandate.

Businesses can offer vaccines at their place of work, paying for it for every employee who wants it. However, in the course of offering vaccines for workers, logistics must be considered because things are still evolving as the two vaccines (and others) are projected to become more and more available. Employers must consider the time frame of availability for vaccines (depending on the business’ industry, workers’ ages, etc.), pay for time spent on vaccination (potentially if there’s a reaction, etc.), how payment for vaccines will work, delivery and storage of the vaccine, etc.

While the rollout for the COVID-19 vaccine is ongoing, now is the time for employers to determine how they will handle the inoculation with their employees. 

Sources

https://www.osha.gov/laws-regs/standardinterpretations/2009-11-09

https://www.eeoc.gov/laws/guidance/pandemic-preparedness-workplace-and-americans-disabilities-act

https://www.eeoc.gov/foia/eeoc-informal-discussion-letter-254