SATURDAY, DECEMBER 19, 2020
Baker City, Oregon
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OUR VIEW
Fix the PPP
tax debacle
More than 63,000 Oregon businesses received
Paycheck Protection Program loans this year.
The PPP is a loan designed to provide a direct
incentive for small businesses to keep their workers
on the payroll during the COVID-19 pandemic. The
loans went beyond saving payrolls, however. In many
cases, these loans saved entire businesses from clo-
sure and bankruptcy.
As we enter some diffi cult winter months with CO-
VID-19 still raging and disrupting normal business,
many PPP loan recipients are beginning to realize
that the expenses paid from the proceeds of these
loans are viewed as nondeductible by the IRS. That
is, that money that most fi rms thought came without
strings attached, are still responsible for taxes on
that money as income.
If Congress fails to act quickly, many PPP loan
recipients stand to have as much as 45% of their
PPP loan proceeds taken back when 2020 federal
and state income taxes are fi led this spring. For
example, a fi rm that received $2 million in PPP may
be responsible for paying $400,000 in taxes. That is a
double-whammy to most businesses. It is not logical,
nor does it seem to have been congressional intent, to
have such a large portion of the PPP funds reclaimed
by taxes in the same tax year.
One section of the CARES Act (The Coronavirus
Aid, Relief, and Economic Security Act) specifi cally
excluded forgiven loan amounts from the taxpayer’s
gross income for federal tax purposes. However, the
CARES Act failed to address the deductibility of
expenses paid by a taxpayer with the proceeds of a
PPP loan, effectively nullifying any tax exemption.
Lacking any specifi c legislation to speak to the
deductibility of expenses, on April 30, 2020 the IRS
issued Notice 2020-32, providing that expenses paid
with proceeds from a PPP loan are not deductible for
federal income tax purposes. On May 1, Chairman of
the Senate Finance Committee, Sen. Chuck Grassley
of Iowa, expressed disappointment with the IRS’s
ruling and suggested it was contrary to legislative
intent.
Despite the clear communication from members
of Congress regarding the intent of the CARES Act,
six months later we are still waiting for legislation to
override the IRS’s April 30, 2020 ruling.
Letters to the editor
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No Facebook? No problem
By Cathy O’Neil
What would happen if Facebook
disappeared tomorrow? Would people
suddenly be unable to communicate
online? Would the economy screech to
a halt? Would anyone be deprived of a
good, service or piece of information that
was somehow crucial to their existence?
Of course not. Which is why one of the
company’s main arguments against a
breakup — that it’s too big and complex
to dismember — makes no sense.
Some companies play such an impor-
tant role in the economy or in people’s
lives that their failure or disintegration
could be disastrous. This allows them to
drive a hard bargain with the govern-
ment if they get into trouble: Help us,
or else. During the 2008 fi nancial crisis,
for example, the government had little
choice but to rescue the largest U.S.
banks, lest their demise bring down the
country’s whole system of credit and
payments. In this sense, they were “too
big to fail” — and they have grown even
bigger since.
It’s easy to see why people might
place Facebook in a similar category.
It’s big, among the largest companies in
the world by market capitalization —
thanks in large part to the pace at which
it has vacuumed up the competition,
with the blessing of U.S. authorities.
With more than 200 million users in the
U.S. alone, it defi nitely plays a role in a
lot of people’s lives —so much so that it
has aggravated the country’s divisions
by enticing people to delve ever deeper
into conspiracy theories about vaccines,
COVID-19 and much else.
So what would happen if, as a result
of the antitrust suits fi led by the Federal
Trade Commission and state attorneys
general, a court ordered Facebook to
split up, reversing its acquisitions of
WhatsApp and Instagram? The com-
pany’s lawyers argue that the various
businesses have become so inextricably
interwoven that a breakup would be
extremely diffi cult, generating costs and
chaos that would harm users worldwide.
In other words, don’t mess with us, or
else.
Really? No doubt, the breakup would
be diffi cult for Facebook’s managers,
who rely on data sharing among Whats
App, Instagram, and Facebook to create
the most complete possible profi les of
users and then sell their attention to the
highest bidder. If the companies were
separated, all the investment they’d
been making into surveillance and
targeting wouldn’t immediately work
out as well as they had hoped. For them,
the product is the advertising, not the
service to users.
For users, though, there would
hardly be a difference. Most try to
ignore the advertising anyway — or
occasionally get creeped out when they
see an ad for a product they’d been re-
searching elsewhere. They’re primarily
there for the content from celebrities
and their friends, or to communicate
through group chats and messag-
ing systems. The apps are already
separate icons on their computers and
phones.
Even in the highly unlikely event
that all three apps somehow failed, it’s
hard to imagine consumers suffering
much. They have plenty of other ways
to reach each other, such as Twitter,
Zoom and email. Given the role Face-
book has played in polarizing society,
there might even be some upside.
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Mail: To the Editor, Baker City Herald,
P.O. Box 807, Baker City, OR 97814
Email: news@bakercityherald.com
Cathy O’Neil is a Bloomberg Opinion
columnist. She is a mathematician who has
worked as a professor, hedge-fund analyst
and data scientist. She founded ORCAA, an
algorithmic auditing company, and is the
author of “Weapons of Math Destruction.
Grinch’s message more powerful than ever
I watched the Grinch carve
a slice off the roast beast and
slide the plate over to Cindy Lou
Who, and my throat suddenly felt
slightly constricted, and my eyes
warm with moisture.
I’ve seen this Dr. Seuss TV clas-
sic, which fi rst aired in 1966, prob-
ably 50 times since I was a child,
born just four years after its debut.
It remains for me, as it no doubt
does for millions of other Ameri-
cans of my generation, a tradition
without which the Christmas
season would feel slightly hollow,
lacking its full complement of
mirth and joy.
But I don’t recall that the con-
clusion of “How the Grinch Stole
Christmas!” ever affected me quite
so profoundly as it did on a recent
Sunday evening.
I didn’t even see the whole show.
I happened upon the Grinch
while mindlessly meandering
through the on-screen channel
guide. By the time I tuned in, the
titular green character had made
considerable progress in robbing
the Whos down in Whoville of their
every Christmas gift and decora-
tion, save for hooks and some wire
on the walls.
The true climax of the program,
JAYSON
JACOBY
of course, is the Grinch’s epiphany
as he listens, from the summit
of Mount Crumpet, to the Whos
happily singing together to greet
Christmas morning.
Although I can appreciate the
point of this scene — the Whos
are so fi lled with the spirit of the
season that they celebrate despite
being victims, one and all, of a
particularly malicious serial bur-
glar — even as a child I don’t recall
being quite credulous enough to
completely buy it.
Maybe I was an unusually cyni-
cal child, but it always struck me
that this wasn’t an altogether nor-
mal reaction — that no town, even
an isolated mountain village like
Whoville, could be occupied solely
by people of such equanimity.
Perhaps the group of less pacifi c
Whos, the Whos who would have
been screaming for vengeance and
rounding up a well-armed posse
to go after the thief, were sleeping
it off after chugging a couple too
many eggnogs on Christmas Eve.
Anyway, that scene, however
inspiring, didn’t extract any par-
ticular emotion as I watched its fa-
miliar sequence the other evening.
(Although I chuckled, as usual,
when the circle of Who singers, to
permit the Grinch’s overloaded
sleigh to enter the town circle,
formed a sort of human gate that
swung back and then closed again.
A small thing, sure, but it’s the sort
of whimsical detail that makes Dr.
Seuss’ work so magical.)
What got me, somewhere in the
region where my heart dwells,
were the fi nal poetic rhymes, de-
livered in narrator Boris Karloff’s
inimitable timbre, his voice as
warm and soothing as a woolen
cloak donned on a chilly morning.
“Welcome, Christmas, bring your
cheer,
Cheer to all Whos, far and near.
Christmas Day is in our grasp
So long as we have hands to
clasp.
Christmas Day will always be
Just as long as we have we.
Welcome, Christmas, while we
stand
Heart to heart and hand in
hand.”
Such simple themes they are,
rendered in rudimentary verse and
mostly one-syllable words.
And yet in this context simplic-
ity, as it so often does, infuses those
brief lines with a power that no
combination of complicated meter
and mellifl uous adjectives could
ever approach.
The poem seems almost child-
like, something a third-grader
might create while bent over a
diminutive desk, clutching a No.
2 pencil and reproducing the
recently learned letters with par-
ticular care.
But the message carries an
infi nite wisdom, a truth immeasur-
able.
“Just as long as we have we.”
This, I think, is the key line.
Never in my lifetime have there
been more reasons, should a per-
son be inclined to pessimism and
despair, to resist the tug of holiday
nostalgia.
I suspect many people much
older than I am feel the same.
It is all too easy to succumb to
sadness, to lament all that we have
lost in 2020.
I certainly have done so at times.
I have whined to myself, in
especially melancholy moments,
about vacations canceled and
family celebrations foregone and
an overall sense that so much that
was familiar is strange, and that
perhaps we won’t ever quite make
it back to where we were before.
And yet, as I watched a cartoon,
I realized, with no small amount of
shame, how trifl ing my disappoint-
ments are, how self-indulgent.
So many people have lost vastly
more than I have over these dis-
mal months.
My family is healthy. I have
four children, two of them adults
who have made their own happy
homes, and all four are thriving.
My two grandsons, one nearing his
fourth birthday, the other almost
halfway through his second year,
live just a few blocks away. Their
wonder at the world is not tainted
by the recent troubles, their joy at
the recent fall of snow the purest
sort of reaction.
Christmas, as the Grinch so
famously discovered, will come.
We need only welcome the sea-
son, to embrace its magic with our
hands and, most important, with
our hearts.
Jayson Jacoby is editor
of the Baker City Herald.