September 2020


added in the previous three years. By that measure the economy was stronger just before he took office.


Unemployment: The


unemployment rate was already well below the historical norm when Trump took office and continued dropping to the lowest rate in half a century — 3.5% as recently as February. But it’s been lower many times before. It was under 3% for 11 straight months ending in November 1953, for example.


‘Record’ job gain?: Trump


claimed a “record” gain in jobs recently — failing to mention the much larger, record loss that preceded it.


Trump, Aug. 27: Over the past


three months, we have gained over 9 million jobs and that’s a record in the history of our country.


That’s true as far as it goes —


the gain for the last three months is actually nearly 9.3 million.


But to be truthful, Trump should have said those jobs were re-gained. They amount to


less than half the


nearly 22.2 million jobs lost — also a record — in February and March as a result of the pandemic.


Furthermore, the job recovery has


lately lost momentum. The number of recovered jobs was 4.8 million in June but less than 1.8 million in July. At July’s rate, it will be February of 2021 before employment gets back to the peak level reached last February.


Taxes: Trump said Biden “has pledged a $4 trillion tax hike on almost all American families.” Biden’s plan does not call for any direct tax increases for anyone making less than $400,000. But independent tax analysts say Biden’s plan to


raise taxes will indirectly affect employees


www.hamptonroadsmessenger.com due to lower investment returns


would see a income,


but


reduction “[t]he


in or


lower wages over time. As a result, most Americans


after-tax


be small for most of those middle- and lower-income


change would households—on


average, only a fraction of a percent of their after-tax income—and we estimate that 80 percent of the new tax revenue would come from the top 1 percent by income,” according to John Ricco, a senior tax analyst at the Penn Wharton Budget Model. That analysis was the basis for a claim by Eric Trump on the second night of the convention that under Biden’s tax plan, “82% of Americans will see their taxes go up significantly.”


Biden’s tax plan includes provisions such as imposing a payroll tax


on earnings over $400,000,


restoring a top income tax rate of 39.6% for income above $400,000, and increasing the top corporate tax rate from 21% to 28%.


Ricco said that “[v]ery few


families would be sending larger checks to the IRS (or having more money withheld from their paychecks) under Biden’s proposal.”


“If you’re looking only at


individual income taxes and payroll taxes, we find that about 2 percent of all families would see their taxes go up directly under the Biden plan — almost all of them in the top 5 percent by income,” Ricco told us via email.


But when you include Biden’s corporate


plan to increase corporate taxes, the Penn Wharton Budget Model analysis found that “the tax plan will affect 82 percent of families,” Ricco said. “But instead of seeing their taxes go up directly, those additional families are


The Hampton Roads Messenger 3 paying the corporate tax hikes in the


form of lower investment returns or lower wages over time.” According to the Penn Wharton


Budget Model — which estimates the Biden tax plan would raise between $3.1 trillion and $3.7 trillion over 10 years — middle-income earners would see their after-tax income decline by 0.4%, or $180, on average.


“To explain a bit more: because


the corporate income tax is remitted by corporations and not people, economists have to make some assumptions about which people ultimately bear the burden of that tax,” Ricco said. “We assume that, in the long run, a quarter of the corporate income tax falls on workers in the form of lower wages. … So while those workers wouldn’t literally be remitting more in taxes, over time they would end up shouldering some of the burden of the tax increase.”


Garrett Watson, a senior policy


analyst at the Tax Foundation, told us via email, that “it’s more precise to say that Biden’s plan would lower the incomes of 82 percent of Americans as a result of the tax changes, but not that


it would generate a larger direct tax bill for those Americans.” Health Care


Trump administration claimed that his will “further reduce


the cost of prescription drugs and health insurance premiums,” adding: “They’re


coming way down.” But


insurance premiums for those with employer-based plans — where nearly half of Americans get their coverage — have gone up, as they normally do.


measure


And while there’s not one standard of


total prescription drug


costs, the metric Trump has pointed to in the past as evidence of a decrease


now shows a year-over-year increase. Premiums: The Kaiser Family


Foundation’s latest annual Employer Health Benefits Survey found premiums for single coverage went up 4% from 2018 to 2019 and family coverage premiums rose 5%. That’s for


employer-sponsored insurance, which covers 49% of the population.


Insurance premiums usually do go up. Figure 1.10 in the KFF report show they’ve risen each year dating back to at least 1999.


For those who buy their own coverage on what’s called the individual market — 6% of the U.S. population — the story in the past few years has been different. On the Affordable Care Act exchanges, where those who qualify can get tax credits to help cover the cost, premiums experienced “huge swings” due to “considerable turmoil” in 2018 and 2019, as an Urban Institute report


put it.


Those premiums on average have gone down in 2020 (by 3.5% for the lowest-cost “silver” level premium) and 2019 (by 0.4%), but that was after a double-digit increase for 2018 plans (up 29.7%), driven by the Trump administration’s elimination of cost-sharing subsidies on the marketplaces and insurer uncertainty over the ACA’s future. When insurers set marketplace premiums for 2019, the Urban Institute’s January report said, “it became clear that many of them had overreacted to the tumult and uncertainty”


in pricing 2018


plans. So, those premiums, which do TRUMP SPEECH PAGE 5


Forever Grateful


For Our Community


It’s times like these that show us what we’re made of. Our community comes together in ways we’ve never expected. We are forever grateful for you, our community, for supporting us during these unprecedented times. We are humbled by your support.


Together, we will get through this.


Keeping you informed at COVID19ResponseAtSentara.com


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