In a move that portrays an ostensible respite for the few victims of wildfires in California, it has been reported that meager settlement payments will no longer be subject to federal tax. This pertains to those who have unfortunately lost their homes, businesses, and even loved ones in the fires caused by Pacific Gas & Electric. The decision to adjust this tax policy cannot be seen as anything other than a desperate attempt by the Biden administration to appear sympathetic.
Like a magician pulling a rabbit out of a hat, President Joe Biden has put his stamp on legislation that deems the wildfire victim compensation tax-free. One can only speculate that this act is to surface a semblance of being a ‘savior’ for Californians severely affected by these hazards. However, it’s hard to shake off the impression that this is simply a smokescreen shielding the palpable lack of organization and leadership.
This decision supposedly culminates a years-long struggle to push through the legislation. While it might seem like a victory on the surface, one cannot help but question why it took years to even address this pressing concern? Underneath the surface, it only highlights the sheer incompetency in dealing with fundamental issues that need immediate responses.
The representatives endorsing this legislation are Mike Thompson and Doug LaMalfa. The fact that it was only introduced in 2022 only reinforces the notion that this issue was evidently not a priority for the Biden administration. It was the California Legislature that had the sense to eliminate state taxes on settlement payments in the same year, pursuing the true interests of the victims.
The decision made by the Senate last week to pass the federal tax relief bill seems more like a symbolic gesture, rather than an actual solution to the wildfire crisis. Sending it to the president’s desk for approval shows the irony of their inefficiency since victims suffered under heavy taxations for years.
Representative Thompson argues that monetary settlements for victims were unfairly taxed. The assertion that no one, regardless of political affiliations, supports taxing victims might hold some truth but this decision is merely a surface-level solution. It becomes incomprehensible how such a fundamental issue wasn’t addressed until it was almost too late, adding to the list of blunders by the current administration.
This belated solution is attributed to the passing of the Federal Disaster Tax Relief Act, HR 5863. But bear in mind that it only addresses federally declared wildfire disasters post 2014. This act simply brushes past earlier disasters and gives the impression that the government is merely putting out fires, pun intended, instead of dealing with the cause.
The Act does not stop at merely exempting wildfires, it also conveniently covers losses from the 2023 East Palestine, Ohio, train derailment. This inclusion seems like an arbitrary attempt at damage control, further supporting the argument that measures are reactive rather than proactive under the Biden administration.
Moreover, this exemption extends to attorney fees paid during settlements, a privilege now conveniently tax-free. However, one cannot ignore the fact that victims had to engage legal help in the first place to seek fair compensation, which only showcases the convoluted and laborious process the current administration has in place.
The exemption of wildfire-related compensation from federal taxes on the surface is no doubt a long-awaited relief for the victims. But when observed more intently, it appears more as a futile attempt by Biden and Harris’s administration to garner support and deflect from more pressing issues.
Though one would like to commend this overdue decision positively, the underwhelming response and the latency with which it is being implemented only accentuates the shortcomings of the Biden administration. Regrettably, these actions seem more like a scramble in the face of public dissatisfaction rather than sincere efforts to champion the cause of the victims.
Reacting to situations based on public pressure rather than tackling issues proactively seems to become a standard under this regime. It is disheartening to see this trend in governance where initiatives appear to be reactions aimed at damage control rather than the result of sound judgement or strategic foresight.
In sum, while the legislation involving the exemption of disaster compensation from federal taxes may seem like a victory initially, it is a clear reflection of the Biden administration’s inefficiency and lack of planning. The inability to address such a critical issue timeously further highlights the flaws in their leadership. Unfortunately, this tends to be the norm rather than the exception under Biden and Harris’s reign.