Mattie Duppler - National Taxpayers Union Senior Fellow joins Yahoo Finance’s On The Move panel to share her thoughts on Tuesday's presidential debate.
ADAM SHAPRIO: All right. We want to keep talking about the impact this debate is having on markets. And to help us break down some of this, Mattle Duppler is joining us. She is joining us from the National Taxpayers Union, where she is a senior fellow. She is in Washington DC. Mattie, before we play a sound bite regarding the economy, I'm curious-- what's your initial reaction, and especially how it's impacting markets right now? Because the stimulus news that Treasury is going to try and work with Congress-- it's at least helping markets after what we saw last night.
MATTIE DUPPLER: Yeah, Adam. That's really the big catalyst here for any kind of market movement or any kind of investor optimism, not so much the debate last night, which if you're asking me for one reaction, I think an eye roll really is it. But when you're talking about what's happening in Washington, hopes for a stimulus package spring eternal here. The fact that Secretary Mnuchin and Nancy Pelosi continue conversations about what potentially could be a new package moving forward is really what investors are watching and what politicos like myself are watching. I mean, this has been the debate for the last several months. What should Congress do next with regards to the COVID situation?
And certainly, the data that we're seeing-- this being, again, a week where we're going to get new jobs data for the preceding month tomorrow-- this is a week where it's really going to matter whether or not Congress can get its act together and get that final bill across the line.
- And it's also the week, by the way, we're hearing about more layoffs, right, Mattie? I do want to mention that as we get past this latest round of stimulus discussions, we will have to focus on the election and the economic policies of the next president, whomever that will be. And even though there wasn't much policy substance last night, there was a little bit of discussion of the economy. Let's listen.
DONALD TRUMP: So we built the greatest economy in history. We closed it down because of the China plague. When the plague came in, we closed it down, which was very hard psychologically to do. He didn't think we should close it down, and he was wrong.
JOE BIDEN: We inherited the worst recession short of a depression in American history. I was asked to bring it back. We were able to have an economic recovery that created the jobs you're talking about. We handed him a booming economy. He blew it.
- Mattie, it does feel like if there are undecided or moderate voters out there still, a lot of them, their decision is going to have to do with where they think the better economy is going to come from and under whom. What do you think the perception out there is like when it comes to these two candidates?
MATTIE DUPPLER: I think we are in a bizarre situation where both candidates can make these economic claims, and both can technically be right. So for President Trump, leading into the coronavirus pandemic, 2019 was a banner year. We saw median household incomes rise to the highest level they've ever been at, and the incomes that were rising the fastest and the best were for people at the lowest quintile. So that makes an impact. People vote with their pocketbooks, and they vote with how they see their communities interacting with the economy. So up until 2019, that was a pretty good scenario for a lot of Americans.
I think a lot of Americans see coronavirus as a once-in-a-lifetime event. And as a result, they're willing to give the president a little bit of leeway here, saying that 2020 is anachronistic, and 2019 is really the economic future we can look forward to with another four years of the president. Joe Biden, though, has a point to make as well, which is that leadership matters. And if the effects, the economic effects of the coronavirus could have been made better by better policy, he can continue to make that argument. And I think a lot of Americans look around their communities wondering what's going to happen in the fall as the public health situation potentially gets worse and say, listen, I would like to turn the reins over to someone else.
Now, I do think that when it comes to this question of the economy itself, Joe Biden does have an uphill battle to make-- not just because of the Obama-Biden presidency, but because of what happened to Democratic politicians across the country under the eight years of Obama-Biden. We lost over 1,000 Democratic seats because voters across the nation looked at the Democratic platform and said, listen, that's not what we need right now. We need better and different policies in order to really get the economic recovery moving. That's really the challenge for Vice President Biden is to try to rebut that history in order to make the case to Americans that he has a plan that will continue to grow the recovery further than where we ended in 2019.
- Mattie, despite all of the back-and-forth and interruptions we saw last night, another policy point we should bring up is taxes. Of course, we had Joe Biden point out that recent report from "The New York Times" about how little President Trump paid in taxes. And he pointed out that that was because of the Obama and Biden portion of the tax code that allowed him to do so. I was hoping you could just unpack what you were hearing in the debate as it relates to taxes, any points that may have been brought up that viewers could have missed during all of the arguing.
MATTIE DUPPLER: I mean, this was a point that I feel like Biden could have landed in a really elegant way, pointing out $750 in taxes, which is less than teachers can deduct for their school expenses, a point he was kind of trying to make but fumbled over, thanks in part to all the interruptions that were happening. But you raise a good point. Trump was actually right on the issue of tax policy when they had this conversation yesterday.
The Obama-Biden recovery package increased-- or expanded, I should say-- the use of operating loss deductions, recognizing that in recessions, a lot of businesses tend to not have as much revenue or have losses when they were expecting profits. That portion of the tax code allows businesses to smooth out those losses using the tax code for the deductions that they might have in years where they actually do have a profit. That's smart tax policy. We don't tax businesses when they don't have a profit because there's no money there to tax. That's a portion of what President Trump used in order to reduce his tax liabilities for the last several years.
So Trump pointed out that the Obama-Biden administration was actually responsible for that, and the Tax Cut and Jobs Act actually reduced the ability of businesses to use those losses over time. Now, the bipartisan CARES Act, the big bill that Congress passed in order to combat coronavirus, actually repealed that part of the Tax Cut and Jobs Act, expanding the use of losses for businesses again, recognizing, which has been a bipartisan-- what has been a point of bipartisan agreement that this course in the tax code that allows businesses some amount of certainty in very severe economic circumstances. The fact that both sides now are arguing over which side is responsible for that portion of the tax code is a little interesting to me given that this has been a point of bipartisan agreement for the past 10 years when we're looking at economic recoveries and the right tax policy to get us back to a positive economic situation.
ADAM SHAPRIO: And Mattie, we should point out, though, that in the discussions of tax reform, President Trump, who promised to close the loopholes, didn't close this loophole, perhaps, in 2017 with the historic tax reform. We've gotta say thank you to Mattie Duppler, the National Taxpayers Union senior fellow. Look forward to the next time you join us.