Territorial De Minimis Exemption Act

— 156 — Mandate for Leadership: The Conservative Promise New Policies The Coast Guard’s mission set should be scaled down to match congressio- nal budgeting in the long term, with any increased funding going to acquisitions based on an updated Fleet Mix Analysis. The current shipbuilding plan is insuf- ficient based on USCG analysis, and the necessary numbers of planned Offshore Patrol Cutters and National Security Cutters are not supported by congressional budgets. The Coast Guard should be required to submit to Congress a long-range shipbuilding plan modeled on the Navy’s 30-Year Shipbuilding Plan. Ideally this should become part of the Navy plan in a new comprehensive naval long-range shipbuilding plan to ensure better coherency in the services’ requirements. Outside of home waters, and following the Caribbean and Eastern Pacific, the Coast Guard should prioritize limited resources to the nation’s expansive Pacific waters to counter growing Chinese influence and encroachment. Expansion of facilities in American Samoa and basing of cutters there is one clear step in this direction and should be accelerated; looking to free association states (Palau, the Federated States of Micronesia, and the Republic of the Marshall Islands) for enhanced and persistent presence, assuming adequate congressional funding, is another such step. The Secretary of the Navy should convene a naval board to review and reset requirements for Coast Guard wartime mission support. To inform and validate these updated requirements, the Chief of Naval Operations and the Coast Guard Commandant should execute dedicated annual joint wartime drills focused on USCG’s wartime missions in the Pacific (the money for these activities should be allocated from DOD). An interagency maritime coordination office focused on developing and overseeing comprehensive efforts to advance the nation’s mari- time interests and increase its military and commercial competitiveness should be established. Given the USCG’s history of underfunded missions, if the Coast Guard is to con- tinue to maintain the Arctic mission, money to do so adequately will be required over and above current funding levels. Consideration should be given to shifting the Arctic mission to the Navy. Either way, the Arctic mission should be closely coordinated with our Canadian, Danish, and other allies. Personnel USCG is facing recruitment challenges similar to those faced by the military services. The Administration should stop the messaging on wokeness and diversity and focus instead on attracting the best talent for USCG. Simultaneously, consis- tent with the Department of Defense, USCG should also make a serious effort to re-vet any promotions and hiring that occurred on the Biden Administration’s watch while also re-onboarding any USCG personnel who were dismissed from service for refusing to take the COVID-19 “vaccine,” with time in service credited — 157 — Department of Homeland Security to such returnees. These two steps could be foundational for any improvements in the recruiting process. U.S. SECRET SERVICE (USSS) Needed Reforms The U.S. Secret Service must be the world’s best protective agency. Currently, the agency is distracted by its dual mission of protection and financial investigations. The result has been a long series of high-profile embarrassments and security fail- ures, perhaps most notably its allowing of then-Vice President-elect Kamala Harris to be inside the Democratic National Committee office on January 6, 2021, while a pipe bomb was outside. Despite the great size and scope of the January 6 inves- tigation, this high-profile incident of danger to a protectee remains unresolved. The failures of the USSS protective mission are too numerous to list here. A December 2015 bipartisan report from the House Oversight Committee listed dozens of such incidents as well as needed recommendations for reform.14 This chapter adopts those findings and recommendations in whole, especially the finding that USSS’s dual-mission structure detracts from the agency’s protective capabilities. At the time of that report, USSS agents spent only one-third of their work hours on protection-related activities as opposed to investigative activities. USSS was established initially to investigate counterfeit currency, but its mission has evolved over the decades to prioritize electronic financial crimes. For example, as this chap- ter was being written, all 15 of the USSS’s most wanted individuals were wanted for financial crimes, many of them international in nature. Notably, the last head of the agency left not for a protection-related job, but to be the Chief Security Officer of social media company SnapChat. This is a pattern that has developed over the years, with agents seeking to burnish their online financial crimes credentials to secure corporate security jobs. Coupled with some of the lowest morale in the federal government, the agency has completely lost sight of the primacy of its protective mission. New Policies USSS should transfer to the Department of Justice and Department of the Treasury all investigations that are not related to its protective function. It should begin the logistical operation of closing all field offices throughout the country and internationally to the extent they are not taken over by Treasury or Justice. USSS agents stationed outside of Washington, D.C., should be transferred to work in Immigration and Customs Enforcement field offices where they would continue to be the “boots on the ground” to follow up on threat reports throughout the country and liaise with local law enforcement for visits by protectees.

— 156 — Mandate for Leadership: The Conservative Promise New Policies The Coast Guard’s mission set should be scaled down to match congressio- nal budgeting in the long term, with any increased funding going to acquisitions based on an updated Fleet Mix Analysis. The current shipbuilding plan is insuf- ficient based on USCG analysis, and the necessary numbers of planned Offshore Patrol Cutters and National Security Cutters are not supported by congressional budgets. The Coast Guard should be required to submit to Congress a long-range shipbuilding plan modeled on the Navy’s 30-Year Shipbuilding Plan. Ideally this should become part of the Navy plan in a new comprehensive naval long-range shipbuilding plan to ensure better coherency in the services’ requirements. Outside of home waters, and following the Caribbean and Eastern Pacific, the Coast Guard should prioritize limited resources to the nation’s expansive Pacific waters to counter growing Chinese influence and encroachment. Expansion of facilities in American Samoa and basing of cutters there is one clear step in this direction and should be accelerated; looking to free association states (Palau, the Federated States of Micronesia, and the Republic of the Marshall Islands) for enhanced and persistent presence, assuming adequate congressional funding, is another such step. The Secretary of the Navy should convene a naval board to review and reset requirements for Coast Guard wartime mission support. To inform and validate these updated requirements, the Chief of Naval Operations and the Coast Guard Commandant should execute dedicated annual joint wartime drills focused on USCG’s wartime missions in the Pacific (the money for these activities should be allocated from DOD). An interagency maritime coordination office focused on developing and overseeing comprehensive efforts to advance the nation’s mari- time interests and increase its military and commercial competitiveness should be established. Given the USCG’s history of underfunded missions, if the Coast Guard is to con- tinue to maintain the Arctic mission, money to do so adequately will be required over and above current funding levels. Consideration should be given to shifting the Arctic mission to the Navy. Either way, the Arctic mission should be closely coordinated with our Canadian, Danish, and other allies. Personnel USCG is facing recruitment challenges similar to those faced by the military services. The Administration should stop the messaging on wokeness and diversity and focus instead on attracting the best talent for USCG. Simultaneously, consis- tent with the Department of Defense, USCG should also make a serious effort to re-vet any promotions and hiring that occurred on the Biden Administration’s watch while also re-onboarding any USCG personnel who were dismissed from service for refusing to take the COVID-19 “vaccine,” with time in service credited

— 710 — Mandate for Leadership: The Conservative Promise in-house law enforcement capabilities via the return of the United States Coast Guard and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Bringing these agencies back from the Department of Homeland Security and the Depart- ment of Justice, respectively, would allow Treasury, in the case of U.S. Coast Guard, to increase border security via a vigilance with respect to economic crimes (for example, drug smuggling and tax evasion). U.S. Trade and Development Agency. Congress should eliminate the U.S. Trade and Development Agency (USTDA). The USTDA is intended to help com- panies create U.S. jobs through the export of U.S. goods and services for priority development projects in emerging economies. The USTDA links U.S. businesses to export opportunities by funding project planning activities, pilot projects, and reverse-trade missions while creating sustainable infrastructure and economic growth in partner countries. These activities more properly belong to the private sector. The best way to promote trade and development is to reduce tariff and non-tariff trade barriers. Another way is to reduce the federal budget deficit, and thereby federal borrowing from abroad, freeing more foreign dollars to be spent on U.S. exports instead of federal treasury bonds. Other Issues. Many Treasury Department issues cut across multiple parts of Treasury or other governmental agencies. Several are discussed in this chapter, but not all can be covered here in depth. Other issues of concern include China, cybersecurity, digital assets, digital services taxes, international debt defaults, Iran, Social Security and Medicare Trust Funds and private sector pensions, sanctions policy, and treasury auction and debt issuance. AUTHORS’ NOTE: The preparation of this chapter was a collective enterprise of individuals involved in the 2025 Presidential Transition Project. All contributors to this chapter are listed at the front of this volume, but Monica Crowley, Tom Dans, John Berlau, Austin Bramwell, Preston Brashers, Alexandra Harrison Gaiser, Nathan Hitchen, Adam Korzeniewski, and Jonathan Moy deserve special mention. The authors alone assume responsibility for the content of this chapter, and no views expressed herein should be attributed to any other individual. — 711 — Department of the Treasury ENDNOTES 1. EJ Antoni, “Biden Keeps Making Claims About the Economy That Just Aren’t True. These Facts Don’t Lie,” Heritage Foundation Commentary, February 8, 2023, https://www.heritage.org/markets-and-finance/ commentary/biden-keeps-making-claims-about-the-economy-just-arent-true-these. 2. “Fidelity 2022 Retirement Analysis: In the Midst of Inflation and Uncertainty, Retirement Account Balances Are Rising,” table, “Average Retirement Account Balances,” February 23, 2023, https://newsroom.fidelity.com/ pressreleases/fidelity--2022-retirement-analysis--in-the-midst-of-inflation-and-uncertainty--retirement- account-ba/s/095bb4a8-cf3a-484e-a911-bc0c61c460ff (accessed March 22, 2023). 3. See U.S. Department of the Treasury, Fiscal Year 2022–2026 Strategic Plan and Budget Request for FY 2023, 2022, https://home.treasury.gov/system/files/266/COMBINED-CJ-Web-Version-FY-2023.pdf (accessed March 18, 2023). 4. U.S. Department of the Treasury, Agency Financial Report: Fiscal Year 2015, November 16, 2015, p.4 https:// home.treasury.gov/system/files/266/AFR-FY15-508.pdf (accessed March 19, 2023). 5. Domestic Finance, U.S. Department of the Treasury https://home.treasury.gov/about/offices/domestic-finance. 6. U.S. Constitution, art. I, sec. 9. 7. Ibid., p. ES 1. 8. Including direct and reimbursable employees. See ibid., “Fiscal Year Comparison of Full-Time Equivalent (FTE) Staffing (Direct and Reimbursable),” p. ES 4. 9. U.S. Department of the Treasury, “Offices,” https://home.treasury.gov/about/offices (accessed March 18, 2023). 10. U.S. Department of the Treasury, “Bureaus,” https://home.treasury.gov/about/bureaus (accessed March 18, 2023). 11. U.S. Department of the Treasury, Office of the Inspector General, “Overview,” https://oig.treasury.gov (accessed March 19, 2023). 12. William M (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, Public Law 116–283, §§ 6001–6511. 13. See, for example, Timothy Vermeer, “The Impact of Individual Income Tax Changes on Economic Growth,” Tax Foundation Fiscal Fact No. 793, June 2022, https://files.taxfoundation.org/20220610142519/The-Impact-of- Individual-Income-Tax-Changes-on-Economic-Growth-2.pdf (accessed March 18, 2023), and Karel Mertens and José Luis Montiel Olea, “Marginal Tax Rates and Income: New Time Series Evidence,” Quarterly Journal of Economics, Vol. 133, No. 4 (November 2018), pp. 1803–1884. 14. The current tax system is not neutral toward investment. This neutrality criterion is sometimes expressed as ensuring that the private rate of return equals the social rate of return, that the tax system does not raise the user cost of capital, that all factor incomes are taxed once and equally, that the tax system defines income properly, or that the tax is a consumption tax. For the basic user cost of capital analysis with taxes, see Robert E. Hall and Dale W. Jorgenson, “Tax Policy and Investment Behavior,” American Economic Review, Vol. 57, No. 3 (June, 1967), pp. 391–414, https://web.stanford.edu/~rehall/Tax-Policy-AER-June-1967.pdf (accessed March 19, 2023). See also Kevin A. Hassett and Kathryn Newmark, “Taxation and Business Behavior: A Review of the Recent Literature,” in John W. Diamond and George R. Zodrow, eds., Fundamental Tax Reform: Issues, Choices, and Implications (Cambridge, MA: MIT Press, 2008), and Alan J. Auerbach, “Taxation and Capital Spending,” University of California, Berkeley, September 2005, http://eml.berkeley.edu//~auerbach/capitalspending.pdf (accessed March 19, 2023). 15. Scott A. Hodge, “The Compliance Costs of IRS Regulations,” Tax Foundation Fiscal Fact No. 512, June 2016, https://files.taxfoundation.org/legacy/docs/TaxFoundation_FF512.pdf (accessed March 19, 2023), and Jason J. Fichtner and Jacob M. Feldman, “The Hidden Costs of Tax Compliance,” Mercatus Center, May 20, 2013, https:// papers.ssrn.com/sol3/papers.cfm?abstract_id=2267971 (accessed March 19, 2023). 16. In formal terms, tax policy should seek to minimize the excess burden or deadweight loss of the tax system. See John Creedy, “The Excess Burden of Taxation and Why it (Approximately) Quadruples When the Tax Rate Doubles,” New Zealand Treasury Working Paper No. 03/29, December 2003, https://www.econstor.eu/ bitstream/10419/205534/1/twp2003-29.pdf (accessed March 19, 2023). See also, for example, N. Gregory Mankiw, Principles of Economics, 4th ed. (South-Western College Pub, 2006), ch. 8, or many other textbooks on price theory, microeconomics, or principles of economics.