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Enterprise Report Restoring Liberty, Opportunity, and Enterprise in America

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Enterprise Report Restoring Liberty, Opportunity, and Enterprise in America Issue No. 5, Fall 2020 Enterprise Report Restoring Liberty, Opportunity, and Enterprise in America Taking the Long View By Robert Doar In the late hours of November 3, as election night turned into morning and the results hung in the balance, AEI’s James Pethokoukis tweeted out a chart showing wage change in low-wage industries between 2007 and 2019. Pethokoukis was pointing out that during 2018 and 2019, earnings for low-skilled workers grew by 4.1 percent, rising much faster than those in middle-wage and high-wage jobs. That improvement, after years of slower growth, showed up in the election returns with President Donald Trump’s continued popularity among working-class, non-college-educated Americans. It appeared to Pethokoukis, America’s best journalist covering economics, that these workers were rewarding a politician who had delivered for them in a big way. Other AEI scholars including Timothy P. Carney, Matthew Continetti, Yuval Levin, and Charles Murray have contended that culture is at least as important as economics in explaining Trump’s popularity. Resentment toward elites, amplified by issues like racial preferences in college admissions and failure to support the rule of law and order in the streets, has led these voters to turn away from a Biden ticket that made little effort to address their concerns. The president’s strength on Election Day could also have been the result of what AEI Director of Economic Policy Studies Michael R. Strain called the “smothering” “Throughout this campaign, AEI scholars have remained engaged with the immediate issues of the day, the back and forth of politics and policy— and that is good. Our scholars should be in the world, not above it.” macroeconomic effects of Joe Biden’s proposed tax increases. Facing the prospect of extended lock- downs and corporate tax increases that could erase job gains and cut off an economic recovery, many voters cast ballots with these considerations in mind. Exit polling found that voters’ top priority this election was the economy and jobs, beating coronavirus by a significant margin. It now appears that Biden has won the White House despite the president’s apparent advantages on economics and culture with working-class voters. And the key to Biden’s success may have more to do with Trump himself than anything the former vice president was offering. Trump’s problem may not be Robert Doar his deeds, or even his policy positions, but rather his words. As AEI’s Marc A. Thiessen pointed out, AEI President and Morgridge Scholar Trump’s presidency was best viewed with the sound off. Throughout this campaign, AEI scholars have remained engaged with the immediate issues of the day, the back and forth of politics and policy—and that is good. Our scholars should be in the world, not above it. But our most lasting work comes when we take the long view. There is no better example of that than Nicholas Eberstadt’s Irving Kristol Award speech, which laid out the challenges our country will face in years to come and sketched a path forward that keeps America free, prosperous, and strong. As Eberstadt put it so well, “There is a magnificent American future ahead, just waiting to be built.” No matter the outcome of any single election, our leaders will continue to need research with a long-term perspective, the kind of work that addresses our country’s most serious and persistent issues. Works like, for example, Angela Rachidi’s report on health and poverty demonstrating the importance of employment in helping people overcome health challenges. Or Sally Satel’s heartfelt account of health care in rural Ohio illustrating the consequences of our opioid epidemic. Or Benedic N. Ippolito’s recent paper on surprise medical bills offering solutions to this vexing problem. Nine of our scholars have also come together to produce a new joint volume, Governing Priorities: Advice for America’s President, for 2021 and Beyond, which out- lines the most pressing policy concerns for our country and suggests critical reforms. In the coming years, the next administration will face enormous challenges. Despite constraints like a rising national debt, a looming entitlement crisis, and intractable partisan polarization, the next White House will be expected to implement policies that promote economic flourishing, maintain our place on the world stage, and push us to live up to our highest ideals. Our scholars’ advice offers a road map to navigate these complex challenges. Our best research mixes these two worlds, simultaneously responding to current controversies while offering long-term solutions. New AEI Resident Scholar Kevin R. Kosar’s studies on mail-in voting, for example, illustrate that kind of work. In a period of heightened uncertainty and an election that featured unprecedented mail-in ballots, Kosar’s work provided a crucial resource for policymakers and pundits around the country. But he also illustrated crucial areas for reform in our Postal Service that will inspire forward-thinking action. With this kind of research, AEI will continue to shape the contours of both the political debate and the policy conversation for years to come. Thank you, as always, for your support of AEI. Your commitment to our shared values allows our scholars to advance the ideals we cherish. We are grateful to count you as a partner in this endeavor. AEI Scholars Explain AEI Awards Nicholas Eberstadt CARES Act Benefits the Institute’s Highest Honor for Donors The Coronavirus Aid, Relief, and Economic Security (CARES) Act includes time-sensitive incentives for charitable giving in 2020. To encourage giving during the pandemic, the deduction for cash contributions to public charities is no longer limited to 60 percent of a taxpayer’s adjusted gross income (AGI). A donor can fully deduct cash gifts equal to as “As we look beyond COVID, we have the opportunity to repair America’s much as 100 percent of AGI this pre-pandemic flaws. We should be seeking a social and economic year. Additionally, corporations revitalization of our nation, a bold and thorough overhaul of our public can now deduct up to 25 percent and private ways to spark a dynamic upswing in progress for everyone. of taxable income, an increase The vision, the design, should be prosperity for all. This can be done. And we from 10 percent. can be the ones to do it. A revitalized America is a prize worth fighting for.” We asked AEI tax scholars Alex Brill —2020 Irving Kristol Award winner and and Alan D. Viard to explain how this Henry Wendt Chair in Political Economy Nicholas Eberstadt tax policy change affects charitable giving this year. On October 14, AEI hosted the Irving Advice for America’s President, for Kristol Virtual Lecture and Summit, 2021 and Beyond. The volume features honoring Nicholas Eberstadt, the AEI concrete policy recommendations How does this provision make giving Henry Wendt Chair in Political Economy, from nine AEI scholars (including the in 2020 more advantageous? in recognition of his powerful insights on panelists) on actions the next presidential What does this provision change? myriad policy issues at the intersection administration can take to spark American Who does this apply to? of economics, social trends, and foreign revitalization across policy areas. policy. Eberstadt’s lecture reflected on The Irving Kristol Virtual Lecture and Section 2205 of the CARES Act reinvigorating our nation’s future after Summit aired live on C-SPAN 2. You can provides that taxpayers with charitable COVID-19 by fostering the conditions view a recording of the lecture and panel giving greater than 60 percent of their required for human flourishing. at www.aei.org/research-products/ AGI continue to receive the marginal Building on these themes, AEI speech/2020-irving-kristol-award- tax reward for giving (37 percent in scholars Yuval Levin, Kori Schake, remarks/ and find the Governing the top bracket), just as is provided to Michael R. Strain, and Ryan Streeter Priorities essays at priorities.aei.org/. taxpayers giving less than that amount. participated in a panel discussion on Those taxpayers can claim more the new AEI book Governing Priorities: of a charitable deduction (up to 100 percent of AGI) in the year of the donation instead of needing to carry forward the deduction into future AEI relies on the financial backing of private individuals, foundations, and years, which makes the deduction corporations that share our values and support our aims. As a nonpartisan, more valuable and should result in 501(c)(3) organization, AEI does not take institutional positions; does not more charitable giving. There is no accept funding from US or foreign governments, including state-owned or impact on taxpayers with contributions state-operated subsidiary entities; and does not perform contract research. equal to or less than 60 percent of AGI. This policy maintains our scholars’ complete independence and credibility in Notably, this more generous policy debates. To learn more or support AEI, visit www.aei.org/donate/. charitable giving policy is set to expire at the end of 2020. 3 Leadership Network Virtual Cohort: By the Numbers Average summit rating: 8.7 out of 10. Their average age is 41. They hail from 38 states. said the summit was well 99% organized and professional. said they are more likely to get 96% involved and stay in touch with AEI in the future. said the summit’s intellectual 89% content was valuable to their work. Leadership Network of the new cohort 44% is female. represent a minority AEI Convenes First Virtual Summit 30% community. “The summit was, far and away, the best professional development event I’ve attended in a long time. I’m excited to be part of the Leadership Network because I know I’ll be able to further my own professional work and connect Leadership Network in a meaningful way with other leaders, all while improving my knowledge Celebrates 1,000th Member about policy issues that affect my community.
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