GOVERNMENT

Reading Time 6 mins 30 secs – Special guest post by Team Revolution Mentor Dan Pilla. The upcoming presidential election is certainly the most important of my lifetime, and perhaps any since the Civil War era. The winner will not just direct policy over the next four (or more) years, but will affect the fundamental structure of our nation. Indeed, many of today’s candidates, following the lead of former President Obama, wish to “fundamentally change America.” But they don’t tell you what that means. That’s the purpose of this blog. My goal here is not to tell you whom to vote for, but rather, to argue what to vote for. To begin with, let us understand exactly what the fundamental principles of America are. Only then can we make an informed decision about whether to vote to change them. THE DECLARATION OF INDEPENDENCE The second paragraph of the Declaration of Independence sets forth the principles upon which America is built. It states, in part: We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed... This simple statement sets out five fundamental truths about our beliefs, which are: 1. God created man, 2. We are all equal, 3. God (not government) grants humans certain rights, in particular, life, liberty, and the pursuit of happiness, 4. Those rights cannot be taken away, and 5. Governments are created to protect those rights. As you go into the voting booth this November, ask yourself, which of these fundamental principles do you wish to alter or abolish? Let’s discuss them in more detail. THE RIGHT TO LIFE The great William Blackstone, the English jurist and legal philosopher, wrote in his Commentaries on the Law, that life is the “immediate gift of God.” He declared that the right to life is one that is inherent in every individual. Blackstone noted that that no man has the power to destroy life, but through the law of God, “who is the author of life.” Many politicians today argue that there is an individual choice whether an unborn child should live or die. Many such politicians argue that this choice exists right up until the moment the child is born, and perhaps, astonishingly, even immediately after the child is born. Instead, God tells us we are not to kill the innocent (Exod 23:7). Rather, in Deuteronomy 30:19, he says, This day I call the heavens and the earth as witnesses against you that I have set before you life and death, blessings and curses. Now choose life, so that you and your children may live. God is so concerned with life that he created human life in His own image (Genesis 1:26-27); He sustains life (Job 12:10); He redeemed life (II Corinthians 5:19); and He sent his Son not only that we may have life, but have it to the fullest (John 10:10). Would you vote to fundamentally change the idea that humans have an inherent right to life? If so, in whom would you vest the power to decide who will live and who will not? What government bureaucracy would you trust to make that decision about your life and that of your family? If you said “no” to my first question, then you must vote to uphold the right to life. THE RIGHT TO LIBERTY If man is created by God, as so stated in the Declaration, and if man has an absolute right to life, then it naturally follows that he also has an absolute right to liberty. Man is born free of bonds. In a state of nature, as explained by John Locke in his first Essay on Civil Government, men are free to “order their actions” as they see fit. This is the essence of liberty: the freedom of every person to make full use of his own God-given gifts and talents. As explained by Frederick Bastiat in his classic essay, The Law, liberty is the union of all other freedoms. It is the combination of the freedom of conscience, education, association, travel, press, labor and trade. God placed a call on every human. He endowed each person with unique gifts and talents, as well as vision, drive, courage and commitment. He expects each of us to use those gifts—each according his ability (Matthew 24:15)—to build God’s Kingdom. Yet a bevy of today’s politicians somehow believe that you are not smart enough to carry out God’s call on your life. Rather than recognize the liberty that naturally flows from the gift of life, they intend to intervene in the conduct of your personal affairs, using the force of government to direct your life. We see this in the areas of the education of your children, your ability to contract with others for goods, service and compensation, your capacity to provide for your own medical insurance and healthcare, the management of your retirement savings and investments, your general business practices, and so on, with an endless list of government regulations ostensibly intended to protect you from yourself. To borrow Bastiat’s phrase, this “philanthropic tyranny” is merely the means by which governments make despotic inroads into every aspect of your private life. The net effect is to reduce people “under absolute despotism” (Declaration of Independence). People are thus denied their natural, God-given right to liberty and are instead subjected to a growing list of whimsical social programs dreamed up to supplant God’s call on your life. In this way, political elitists seek to “arrange, organize, and regulate it according to their fancy” (Bastiat). Would you vote to fundamentally change the idea that you have an inherent right to liberty? If so, in whom would you vest the power to determine how your life should be run? What government bureaucracy would you trust to make critical decisions about every aspect of your private life? If you said “no” to my first question, then you must vote to uphold the right to liberty. THE RIGHT TO THE PURSUIT OF HAPPINESS The right to the pursuit of happiness flows directly from the right to liberty. If one is free to pursue God’s call on his life in an honest and peaceful manner, he has the natural right to the ownership of the property that grows from such exercise. In fact, in his Essay on Civil Government, Locke used the term “property” and the idea of property ownership to describe the essential liberties with which every person is born. The American Founders chose to use the phrase “pursuit of happiness” in the Declaration expressly to broaden the idea of this natural right, not to limit it. Yet we have a strong movement of existing and aspiring politicians whose philosophy directly and violently at-tacks the concept of private property ownership. We see this chiefly in tax policy, with proposals for wealth taxes, confiscatory estate taxes, and a graduated income tax system. All of these policies—admittedly—have little to do with raising revenue to fund legitimate functions of government as expressed in Article I, Section 8 of the Constitution. Rather, they have everything to do with destroying the wealth of individuals which was earned lawfully and peacefully, and purportedly transferring that wealth to others who did not earn it. The clarion call of Socialism/Communism is the destruction of private property rights. The first plank of Marx’s Manifesto calls for the abolition of private property in land. The second plank calls for a “heavy progressive or graduated income tax” to purposefully transfer wealth to the state. This is done, according to Marx, by making “despotic inroads on the rights of property.” In other words, Socialism/Communism stands for the outright theft of private property by the government. Would you vote to fundamentally change the idea that you have an inherent right to the property you peace-fully acquired through your honest labor? If so, in whom would you vest the power to determine how the fruits of your labor will be allocated or distributed? What government bureaucracy would you trust to make the final decision about what your labor is worth, and what of its fruits you are allowed to keep for yourself? If you said “no” to my first question, then you must vote to uphold the right to the pursuit of happiness—the right to own and control the fruits of your own labor. What is the current mind of America? In 1825, Jefferson wrote a letter to Henry Lee to explain the thought processes behind the language in the Decla-ration of Independence. Jefferson, the chief author of the document, said the intention was to capture and present to the world “an expression of the American mind.” That is to say, the Founders intended to craft a “plain and firm” statement to the world about the British government’s destruction of the rights to life, liberty and property in the Colonies. On this matter, Jefferson said, “there was but one opinion on this side of the water.” That opinion was that these rights were granted by God and no government had the lawful authority to usurp them. Is this no longer the mind of America? Do we now truly wish to fundamentally change America ? Are we to divorce ourselves from the principles of liberty and limited government that made us the freest and the richest nation the world has ever seen? And what would we have replace our fundamental principles of life, liberty, and the pursuit of happiness? Would we be better suited to the European models of hereditary monarchy and tyrannical dictatorship that looted and oppressed populations for centuries? Or would we leave the development of our system of government—like so many nations of the world throughout history and even today—subject to the whims of war, chance, and conquest? As Patrick Henry said in his famous “Liberty or Death” speech, “Forbid it Almighty God!” When you cast your vote in November, whether at the national, state, or local level, I encourage you to vote for life, liberty, and the pursuit of happiness. __________________________________________________________________________________________________________________ Learn more about Dan Pilla here . Want more mentorship from Dan? Become a Team Revolution Partner now .

Have you ever seen this image? PHOTOGRAPH BY EARTH SCIENCE & REMOTE SENSING UNITY, NASA JOHNSON SPACE CENTER Look closely. Once a year, I share this image. It’s a night image from several years ago of the Korean Peninsula. What do you see? North Korea is almost completely dark compared to neighboring South Korea. In North Korea, the streets become too dark for people to walk at night. Lights aren’t on in homes, let alone televisions. But South Korea has light. They have prosperity. You can plainly see how drastic the difference is between the two. Why? Government. Government will affect your life greater than anything else in the earth realm. Government decides how you live and the benefits and opportunities you have. Government ensures your freedom, or takes it from you. And our culture wants us to stop talking about it. The enemy wants believers to stop talking about government, and he definitely wants us to STAY out of it. And it’s working. Think about it — how many times have you held back on sharing your opinion in just the last few months? How many times have you bit your tongue at a family gathering, with a group of friends, or on social media? That’s exactly what the enemy wants. He wants us to be too worried about upsetting an opinionated coworker, or an opposite-leaning family member, or all of the people that “like” us or follow us on social media, to speak up. We have a real problem. The fear of persecution is silencing The Church. We’re politically correct or culturally correct. We’re afraid to speak up. We don’t want to talk about or give our opinions about politics, or religion, or who uses what bathroom, or say the name of Jesus, because we don’t want to cause trouble, or bring trouble on ourselves. So, we’re putting up with everything. We’ve been clapping our hands in worship, while Satan has been working behind the scenes to change our laws and enforce his legality and authority in the land. We’ve become complacent. We’re being lulled to sleep by the low standards of the world. They’ve told us not to judge them and we’ve listened. And all the while, those that don’t want righteousness are continuing to take our freedoms. And they will continue to take our freedoms until we have none . If there were an army from another nation attacking one of our cities right now, we would all be mobilizing ourselves, preparing to fight a battle. But what many don’t realize is that an army IS attacking our country right now—not a physical army, but one that is steadily and deceptively using our technology, and carefully placed people, to strip us of our freedoms little by little every day. Oh, and the enemy has done a great job of keeping you silent. He wants you to be easy to get along with. He loves that you’re afraid to rock the boat—afraid of confrontations, and afraid of being persecuted. But Matthew 5:10 says, “God blesses those who are persecuted for doing right, for the Kingdom of Heaven is theirs.” Whether you like it or not—whether you want to be or not—you are already in a battle. This conflict is no different than other conflicts that have faced our nation. It’s not too late to fight. This isn’t about political parties or ideals. This is about right and wrong. This is about the standards set for us by the Word of God. This is about valuing freedom, and the price that is paid for it, because true freedom is never free. There is no freedom without responsibility. We must stand against everything that is against Christ. We must rise up for the souls of men and declare righteousness and be willing to engage conflict—even physical. We’re here right now for such a time as this. Souls are at stake. Your freedoms are at stake. America is at stake. So stop trying to be comfortable. Don’t say, “Whatever happens happens.” No. Know the facts, and SPEAK UP! Take a stand. Vote. Don’t be afraid of being politically incorrect. Stop shying away from conflict so you can be liked. Embrace and honor the Word of God. Teach your children to stand for truth, righteousness, and honor. Be willing to intercede and fight the good fight. Be bold and courageous. Don't let the threat of persecution silence you. Jesus defended freedom and truth with His life. Will you ?

On March 27, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This is a massive stimulus package designed to mitigate the horrific economic damage inflicted by the COVID-19 pandemic. The bill provides for about $2.2 trillion in spending, cash rebates and loans to businesses intended to help keep them afloat during this time of unprecedented upheaval to our social and economic culture. In addition to providing loans (some forgivable, as discussed below), the package provides money for the IRS to carry out new administrative duties under the law. The IRS’s funding looks approximately like this: • $293.5 million for IRS taxpayer services, • $170 million for IRS operations support, • $78.7 million for the Treasury Department’s Bureau of the Fiscal Service, • $38 million for the Social Security Administration, and • $37.2 million for IRS enforcement. Let’s examine some of the key elements of CARES as it relates to individuals and businesses. Economic Impact Payments The Centerpiece of CARES The centerpiece of CARES is the so-called “economic impact payment” that will be handed out to most Americans. This combination stimulus/relief payment is intended to provide families with immediate cash to hold them over while businesses are closed because of the “stay-at-home” orders in effect throughout the nation. The IRS stated on March 30 that the distribution of checks will begin by mid-April, and as of this writing, money is being deposited into bank accounts. It is estimated that 165 million people, or 93% of all tax return filers, will get some cash. About 140 million will get the full amount of $1,200. The payment is actually considered a credit against your 2020 income tax liability. As such, it is not subject to being taxed. Even if you don’t owe taxes, you could get cash because the pay-ment is considered a “refundable” credit. As such, it’s treated just like the Earned Income Tax Credit. You must have a Social Security number to get paid. That includes the SSN of the taxpayer and his spouse, and the SSNs of any dependents. Without a valid SSN, you will not receive a payment. See: new code §6428(g).Here’s what you can expect in the way of payment. If your adjusted gross income (AGI) is less than $75,000 for a single person, or $150,000 for a married couple filing jointly, you’ll get $1,200 per individual. Plus, you get an additional $500 for each child under 17. A family of four will get a check for $3,400. There is no limit to the number of children to which the $500 applies. See new code §6428(d).If your AGI exceeds the above amounts, the credit is phased out. Under the phase-out rules, the credit is gradually reduced to zero by the point at which AGI exceeds $99,000 for individuals, $146,500 for heads of household, or $198,000 for joint filers. The rebate is based on your 2019 tax return or your 2019 Social Security statement, if Social Security is your only income. If you haven’t yet filed the 2019 return, the rebate is based on your 2018 return. As you know from last month’s Pilla Talks Taxes, the filing deadline for 2019 returns is moved to July 15, 2020 (see my update on this article below). The best bet is to get the return filed as soon as possible, especially if your 2019 income is lower than 2018 such as to impact the amount of the rebate you’re entitled to. The IRS will process the rebate checks through the end of 2020. The IRS intends to deliver the checks via direct deposit. They will put the money in the account indicated on the tax return to which the tax refund payment was made. If no bank account information was provided, you should provide that information to the IRS to get your money as fast as possible. The has a portal on its web site al-lowing individuals to provide their current bank account information. If there simply is no bank account available, the IRS will mail you a check. If you filed neither your 2018 tax return, nor your 2019 return, you need to get busy. It appears that you will not get a rebate check if both of these returns remain unfiled through 2020. Earlier in the week of March 30, the IRS said that if a person didn’t file a return because their income was too low to require filing, that person would have to file an “abbreviated” return to get the payment. I don’t know what an “abbreviated” return is. I assume the IRS meant you must file a return to prove you don’t have to file a return, for the purposes only of providing proof of your income and bank account information. Those receiving only Social Security payments might fall into this category. As of April 1, the Treasury reversed itself on that point. The most recent guidance states that, at least for SS recipients, some veterans and others not otherwise required to file, no return is necessary. The IRS will simply deposit their checks directly into their bank accounts where the SS or other federal benefits are paid. There now is no need for these people to file an “abbreviated” return, whatever that is. The Paycheck Protection Program Guaranteed and Forgivable Federal Loans If the $1,200 refundable credit for individuals is the centerpiece of the CARES Act, the Paycheck Protec-tion Program (PPP) is a close second. And for small businesses, it will very likely prove to be much more valuable than the $1,200 credit. This is especially true since small business owners with AGI above certain limits aren’t getting the $1,200 credit anyway. The PPP authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. That’s right. I said “forgivable” loans. In fact, not only are the loans forgivable assuming you use the proceeds as provided by law, but further, there is no personal guarantee or collateral required by a business owner to obtain the loan. And what’s more, the Small Business Administration (SBA) “shall have no recourse against any individual share-holder, member, or partner of an eligible recipient of a covered loan for nonpayment of any covered loan” except to the extent that the proceeds were used for a purpose other than those authorized under the law. See: CARES Act §1102(a)(1). Let me say all this another way. The loan doesn’t have to be paid back if you use the proceeds as authorized. You don’t need to personally guarantee the loan. You don’t have to put up any collateral. You can’t be sued for not paying the loan. Furthermore, it is not necessary to first seek a loan from some other source before applying for a PPP loan. The SBA waived the usual requirement that you seek funding from other sources before coming to the SBA. To top it all off, if the loan is forgiven, the forgiveness does not constitute “income” for tax purposes. And, there’s already talk about adding another $250 billion to the pool of resources available for these loans. The Paycheck Protection Program is effective for loans made from February 15, 2020, through June 30, 2020. The loan terms are the same for everyone. WHO QUALIFIES FOR A PPP LOAN? Any type of business qualifies, including nonprofits, veterans organizations and Tribal businesses. Quali-fied businesses also include sole proprietorships, self-employed individuals and independent contractors. As long as your business has 500 or fewer employees, you can apply. Even certain businesses with more than 500 employees might qualify if they meet applicable SBA employee-based size standards for specified industries. Check the SBA’s website for more details on this. AUTHORIZED USES OF LOAN PROCEEDS The loans issued under the PPP will be forgiven as long as you use the proceeds for specifically authorized purposes. The law describes the following as authorized uses of loan proceeds: • Payroll costs; • Costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums; • Employee salaries, commissions, or similar compensation; • Payment of interest on any mortgage obligation (but not prepayment of, or payment of principal on a mortgage); • Rent (including rent under a lease agreement); • Utilities; and • Interest on any other debt obligations that were incurred before “the covered period.” See CARES Act §§1102(a)(1), amending §7(a) of the Small Business Act, 15 U.S.C. 636(a). The “covered period” is defined as the period beginning on February 15, 2020 and ending on June 30, 2020. WHAT CONSTITUTES PAYROLL COSTS? Payroll costs include any of the following items: • Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee); • Employee benefits including costs for vacation, parental, family, medical, or sick leave; • Allowances for separation or dismissal benefits; • Payments required for the provisions of group health care benefits including insurance premiums; • Payment of any retirement benefits; an d • State and local (but not federal) employment taxes assessed on compensation. Sole proprietor self-employed persons and independent contractors are included in this program, even if they pay no wages to other employees. For this purpose, commissions earned by, or net earnings from self-employment (as reported on Schedule C), are considered “payroll costs.” Such earnings are capped at $100,000 on an annualized basis for each self-employed person. Payroll does not include employment taxes imposed under the Internal Revenue Code, compensation paid to an employee who lives outside of the United States, qualified sick leave wages for which a credit is allowed under the Families First Coronavirus Response Act, or qualified family leave wages for which a credit is allowed under the Families First Coronavirus Response Act. What we are talking about here are the payments due and made to employees for their services to your company. HOW MUCH CAN YOU BORROW? PPP loans are based on your average monthly pay-roll costs for the preceding twelve months from the date of application. The amount of the loan is equal to the monthly payroll average, multiplied by 2.5. For example, if your 12-month average payroll costs from February 2019 through January 2020 equal $10,000, your loan amount is $25,000 (10,000 x 2.5). The total amount available to any one business under the PPP is $10 million. The lender determines the precise loan amount you will receive based on the documents you provide . Payroll costs are limited to $100,000 annualized for each employee. So, for example, if you have an employee who earns $120,000 a year, the amount of “payroll” for this calculation is capped at $100,000, or $8,333 per month. This applies to self-employed and independent contractors as well. HOW MUCH OF THE LOAN CAN BE FORGIVEN? Forgiveness of the loan is tied directly to how you use the money. The loan will not be forgiven if you use loan proceeds for anything other than payroll costs, mortgage interest (not principle), rent, and utilities payments over the eight-week period after getting the loan. The loan will likewise not be forgiven if you don’t maintain your staff and payroll. The loan forgiveness amount is reduced if you decrease your full-time employee headcount. Likewise, you will not be forgiven if you reduce salaries and wages by more than 25% for any employee that made less than $100,000 annualized over the past twelve months. If you lay off workers, you have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020. WHAT IF THE LOAN IS NOT FORGIVEN? If the loan is not forgiven, the remaining balance is nevertheless guaranteed by the SBA. It then converts to an amortized loan payable within two years at an interest rate of 1%. Loan payments are deferred for six months. WHEN TO APPLY Small businesses (corporations, partnerships, etc.) could submit applications starting April 3, 2020. As of April 10, 2020, independent contractors and self-employed individuals can apply for PPP loans. WHERE TO APPLY Apply for a PPP loan through any existing SBA lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make PPP loans once they are approved and enrolled in the program. Check with your business bank right away to see whether it offers PPP loans. If it participates with the SBA in any way, it is likely already participating in this program. Go to sba.gov for a list of SBA lenders. HOW TO APPLY You must complete the Paycheck Protection Program loan application. It gets submitted to your PPP lender. Include the documentation sought in the form. The application must be submitted so that it can be processed by June 30, 2020. Included here is a copy of the application. You can take out just one loan under this program. Note that the application, page 2, requires several “certifications.” You must certify “in good faith,” that: • Current economic uncertainty makes the loan necessary to support your ongoing operations; • The funds will be used to retain workers and maintain payroll or to make mortgage, lease, and utility payments; • You have not and will not receive another loan under this program; • You will provide the lender with documentation to verify the number of full-time equivalent employees on payroll and the dollar amount of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight weeks after getting a PPP loan; • All the information you provide in your application, and all supporting documents and forms, are true and accurate; • Knowingly making a false statement to get a PPP loan is punishable by law; • You acknowledge that the lender will calculate the eligible loan amount using the tax documents you submit; • You affirm that the tax documents are identical to those you filed with the IRS; and • You also understand, acknowledge, and agree that the lender can share the tax information with the SBA’s authorized representatives, including authorized representatives of the SBA Office of Inspector General, for the purpose of compliance with SBA Loan Program Requirements and all SBA reviews. SUPPORTING DOCUMENTS REQUIRED You will need documents to prove, 1) the number of full time employees on your payroll, 2) the dollar amount of your payroll costs, 3) covered mortgage interest payments, or covered rent payments, and 4) covered utility costs for the eight-week period following the granting of the loan. As to the number of employees, the Forms W-2 that you submitted to the Social Security Administration for 2019, and the Forms W-4 submitted to you by your employees, will help prove that issue. Also, your internal payroll records, including checks issued to employees for January and February 2020 will prove this point. As to the dollar amount of the payroll, Forms 941 for all quarters of 2019 and the first quarter of 2020 will prove this, as well as current payroll data for the second quarter 2020. Interest on loans, rent and utility bills can be document-ed from information on hand for each of these items. Note that interest on any loans, rent or utilities that you cover with PPP loan proceeds must be paid pursuant to mortgage obligations, rent agreements or utilities for services which began before February 15, 2020. You can’t pay for a new loan or make rent payments per a lease agreement entered into on or after February 15, 2020. HOW LONG DOES THE PROGRAM LAST? The application process is open through June 30, 2020. However, there is a cap on the amount of money appropriated by Congress for these loans. Once the money is gone, it’s gone, unless Congress appropriates more, which is distinctly possible. In the meantime, you should apply as quickly as possible. HOW TO REQUEST LOAN FORGIVENESS A request for loan forgiveness is submitted to the lender servicing the loan. The request must include documents to verify that the money was used only for authorized purposes. You must prove the number of full-time employees and their pay rates, and, of course, that you paid those wages. You must also prove the payments you made on eligible mortgage interest, lease, and utility bills. You must declare under penalties of perjury that you used the loan proceeds to keep employees on staff and to make eligible mortgage inter-est, rent, and utility payments. To the extent that you used the money for other purposes, the loan will not be forgiven and there may be other legal consequences for misusing the money. The lender must make a decision on the forgiveness within sixty days. In the meantime, the interest rate is 1% and is fixed. You must begin paying interest on the loan after six months, which is the deferral period. However, interest accrues during the deferral period. The loan must be paid within two years. It can be paid in full earlier as there are no prepayment penalties or fees. CONCLUSION Assuming you use the money as specifically dictated by the terms of the PPP program under the CARES Act, this loan is in fact a gift. There’s $349 billion (and likely more) available in bailouts to small businesses under this program. _______________________________________________________________________________________________________________ Learn more about Dan and your rights as a taxpayer at www.taxhelponline.com