Voters believe we should not raise taxes coming out of a pandemic by an overwhelming 80 to 20 margin, according to a new poll conducted by HarrisX and commissioned by Americans for Tax Reform. 

Respondents were asked the following:

As the US comes out of the coronavirus pandemic and economic problems it caused, which comes closest to your view?

• Now is the right time to raise taxes for new spending projects.
• Now is not the right time to raise taxes because many businesses and individuals have not yet recovered.

80 percent of respondents answered, “Now is not the right time to raise taxes because many businesses and individuals have not yet recovered,” while just 20 percent answered, “ Now is the right time to raise taxes for new spending projects.”

The poll was conducted by HarrisX overnight online survey between March 31 to April 6 among 4,577 registered voters. The margin of error of this poll is plus or mins 1.45% and the results reflect a nationally representative sample of U.S. adults weighted for age by gender, region, race/ethnicity, and income where necessary to align them with their actual proportions in the population. 

Nearly every demographic believed now is not the right time to raise taxes:

• 70 percent of Democrats and 69 percent of Biden voters said that the US should not be raising taxes coming out of the pandemic.
• So did 82 percent of suburban voters and 79 percent of Independents.
• 89 percent of Republicans and 92 percent of Trump voters shared this sentiment.

These findings should be instructive to lawmakers as President Biden pushes trillions of dollars in new spending and taxes, even as the country is still recovering from the Coronavirus pandemic.  

If Biden and the Democrats enact a corporate income tax rate increase, they will have to explain why they just increased your utility bills

If President Biden and congressional Democrats hike the corporate income tax rate, Kansas households and businesses will get stuck with higher utility bills. Democrats plan to impose a corporate income tax rate increase to 28%, even higher than communist China's 25%. This does not even include state corporate income taxes, which average 4 - 5% nationwide.

Customers bear the cost of corporate income taxes imposed on utility companies. Corporate income tax cuts drive utility rates down, corporate income tax hikes drive utility rates up.

Electric, gas, and water companies must get their billing rates approved by the respective state utility commissions. When the 2017 Tax Cuts and Jobs Act cut the corporate income tax rate from 35% to 21%, utility companies worked with officials to pass along the tax savings to customers, including at least four Kansas utilities.

Working with the Kansas Corporation Commission, Kansas City Power and Light, WeStar Energy, Kansas Gas, and Black Hills Energy passed along tax savings to customers.

Kansas City Power and Light: As noted in this Jan. 18, 2018 Kansas City Power and Light Press release:

Updated rates will include an approximate $100 million benefit to Kansas and Missouri Customers

Today KCP&L announced its intention to file rate update cases with the Kansas Corporation Commission (KCC) and the Missouri Public Service Commission (MPSC) to pass approximately $100 million in annual tax savings to customers, resulting from federal tax cost reductions. The Tax Cuts and Jobs Act, which decreased the corporate tax rate from 35 percent to 21 percent, was signed into law on Dec. 22, 2017 and became effective on Jan. 1, 2018. KCP&L is committed to passing 100 percent of the benefit from this tax cut on to customers.

"We commend both the KCC and the MPSC for already initiating a process to review the impact of the federal tax reduction," said Terry Bassham, President and CEO of KCP&L. "The federal tax cut has significant benefits which should be passed on to our customers in full. We look forward to working with our regulators and stakeholders on the best way to do that."

WeStar Energy: As noted in this Jan. 18, 2018 WeStar Energy press release:

Today Westar Energy announced it will file a request before the Kansas Corporation Commission (KCC) to reflect in its electricity rates the full amount of tax savings from the change in the federal tax law. Westar said that a detailed application is being prepared and will be filed later this month or early February. The Tax Cuts and Jobs Act, which decreased the corporate tax rate from 35 percent to 21 percent, was signed into law on Dec. 22, 2017, and became effective Jan. 1, 2018. 

“We agree with the KCC Staff and others that all these tax benefits should go to our customers,” said Mark Ruelle, President and CEO of Westar. “This application to update rates starts that process.”

All utility rate changes must be approved by the KCC. That process typically takes a few months to review and confirm. While the company estimated the tax benefit to be $65 million annually, or more, the KCC Staff and other parties will confirm the precise figures before the KCC.  In addition to passing through the benefit of lower tax rates, regulators will review and update all other costs to provide electricity.”

Kansas Gas: As noted in this February 25, 2019 KWCH 12 excerpt:

The Kansas Corporation Commission Monday issued an order instructing Kansas Gas Service to return about $16.6 million in tax savings to its customers.

The KCC says this means residential customers can expect a one-time bill credit of $21.06. The KCC says the savings resulted from the Federal Tax Cuts and Jobs Act reducing the corporate tax rate from 35 percent to 21 percent in January 2018.

Black Hills Energy: As noted in this January 14, 2019 Wichita Eagle excerpt:

About 37,000 customers in the Wichita area are getting a cut in natural gas bills starting this month to pass along federal tax reductions approved about a year ago.

Black Hills Energy customers in Wichita will see about a $7.30 reduction in their January gas bill and about a dollar a month in the future.

In total, the company is passing through about $1.7 million in annual savings to its customers, according to a statement issued Friday.

Conversely, a vote for a corporate income tax rate hike is a vote for higher utility bills as households recover from the pandemic.

Many small businesses operate on tight margins and can't afford higher heating, cooling, gas, and refrigeration costs. President Biden should withdraw his tax increases.

Several Senate Democrats are pushing to raise the federal corporate income tax rate to 25 percent in Biden's upcoming infrastructure plan, according to an Axios report: 

"The universe of Democratic senators concerned about raising the corporate tax rate to 28% is broader than Sen. Joe Manchin, and the rate will likely land at 25%, parties close to the discussion tell Axios."

A 25 percent federal corporate rate would still leave the U.S. uncompetitive compared to the rest of the world.

The U.S. federal corporate tax rate is 21 percent. However, states also levy their own corporate tax rates, averaging an additional 6 percent. Because this state tax is deductible when paying the federal corporate rate, the combined national and subnational rate averages out to 25.77 percent.

A 25 percent federal rate would therefore result in a combined federal and state rate of 29.5 percent, higher than Communist China and higher than the average OECD rate.

OECD average national + subnational rate: 23.51% 

China’s rate: 25% 

U.S. national + subnational rate IF Democrats raise federal rate to 25 percent: 29.5% 

Workers, consumers, and shareholders will bear the burden of an increased corporate tax rate. Such a hike will cause businesses to invest less in the United States and more overseas, resulting in fewer job opportunities and lower wages for American workers:

• A Treasury Department study estimated that “a country with a 1 percentage point lower tax rate than its competitors attracts 3 percent more capital.” This is because raising the corporate rate makes the United States a less attractive place to invest profits.  
• According to the Stephen Entin of the Tax Foundation, labor (or workers) bear an estimated 70 percent of the corporate income tax in the form of wages and employment. As Entin notes, 50 percent, 70 percent, or even 100 percent of the corporate tax is borne by workers. 
• A 2012 Harvard Business Review piece by Mihir A. Desai notes that raising the corporate tax lands “straight on the back” of the American worker and will see a decline in real wages.  
• A 2012 paper at the University of Warwick and University of Oxford found that a $1 increase in the corporate tax reduces wages by 92 cents in the long term. This study was conducted by Wiji Arulampalam, Michael P. Devereux, and Giorgia Maffini and studied over 55,000 businesses located in nine European countries over the period 1996-2003. 
• Even the left-of-center Tax Policy Center estimates that 20 percent of the burden of the corporate income tax is borne by labor.  

Raising the corporate rate to 25 percent, as some Democrats are calling for, would leave America with a rate higher than many foreign competitors and harm American workers, businesses, and investment.

Ohio legislators are on the verge of falling into a trap on education funding that would stick taxpayers with future tax hikes to fund big pay for teachers’ unions.

As they consider the next two-year budget, lawmakers must wrangle with education funding. Expanding school choice options has been a priority in recent years, and a worthy one at that. It has never been more clear that parents need control when it comes to choosing where and how their children are educated.

As legislators aim at a new school funding formula that will serve expanding school choice, they must take care that the formula does not lock in more spending growth than Ohio taxpayers can afford. That would lead to tax hikes.

Unfortunately, the proposal being advanced by the Ohio House of Representatives would do just that. Worse, it would lock in unaffordable spending levels by giving teachers unions power to drive up costs for the state.

House Bill 1 is the school funding bill, now part of the House’s biennial budget, HB 110. The legislation would increase school aid from the state, for traditional school districts it would go up by nearly 24% compared to current law.

That is a significant amount of spending and worth a closer look by taxpayers even if it can be paid for by naturally rising revenues or changes in spending priorities. But these numbers don’t even represent the full cost of HB 1. They only reflect what the cost of HB 1 might have been in 2018, without additional funding for economically disadvantage children.

You may have noticed it is 2021, not 2018, presumably Ohio representatives also are aware of this. So why are they using old, 2018 numbers for district costs and salaries to inform a formula that will go into effect in 2022?

Whatever the reason, an already significant increase in aid spending (24% for traditional districts) is actually a lowball figure. It’s based on old school district costs. It also does not take into account ongoing analysis of how to aid economically disadvantaged students, which will add more guaranteed spending to state aid.

In short, old data on school district spending, and outstanding recommendations on additional aid for students from low-income families will significantly drive up the projected cost of the new school aid formula.

Taxpayers don’t know the true cost, but if this version of the funding formula passes, they will be on the hook for whatever that cost ends up being. If the state tries to go under the formula, school districts will be able to sue to get money to fill any such gap. Since their costs and salaries are under their control and feedback into the formula to demand more aid, districts can drive up costs for state taxpayers.

Legislators who support this version of the school aid formula are locking Ohio taxpayers into paying far higher aid costs than they do today, and empowering teachers unions to keep driving those costs up. On top of that, future demands for additional school funding will be made on top of the ever-rising baseline guaranteed by the formula. Before deciding on a final formula, legislators should address these concerns, and be clear on what the state will actually end up spending.