OOPS: Every House Democrat Endorsed By U.S. Chamber Voted for Job-Killing Biden Bucks

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Posted by Tom Hebert on Friday, May 7th, 2021, 4:30 PM PERMALINK

The U.S. economy added an anemic 266,000 jobs in April and the unemployment rate rose to 6.1 percent, a far cry from Dow Jones estimates which predicted 1 million new jobs and an unemployment rate of 5.8 percent.

The U.S. Chamber of Congress, the world’s largest pro-business trade association, issued a press release blaming the anemic jobs numbers on President Biden’s supplemental $300-per-week unemployment payments, saying: 

“One step policymakers should take now is ending the $300 weekly supplemental unemployment benefit. Based on the Chamber’s analysis, the $300 benefit results in approximately one in four recipients taking home more in unemployment than they earned working.” 

Of course, the Chamber is correct – paying people not to work is a massive disincentive for Americans to return to work. At the current federal unemployment supplement level of $300, 37 percent of workers make more on unemployment than at work.

The unfortunate part for the U.S. Chamber is that every single House Democrat the trade association endorsed in the 2020 election cycle voted to extend the 300-per-week “Biden Bucks.”

The $1.9 trillion “American Rescue Plan Act of 2021” passed the House on a narrow 219-212 vote in February.  Of the 23 House Democrats endorsed by the U.S. Chamber during the 2020 election cycle, 15 won re-election. All 15 of these Democrats voted to pass the American Rescue Plan which extended the Biden Bucks program through Labor Day. 

The U.S. Chamber’s endorsement of 23 House Democrats was a notable increase compared to prior years. During the 2018 cycle, the Chamber reportedly endorsed only 7 House Democrats. According to the U.S. Chamber’s own assessment of its impact on the 2020 House elections, the “U.S. Chamber endorsements are known to have a big impact and that rang true in 2020.”

Below are the House Democrats endorsed by the U.S. Chamber of Commerce who voted in favor of the American Rescue Plan and the percentage of the vote they received as candidates during the 2020 election.

  1. Rep. Colin Allred (TX-32), won re-election with 51.9% of the vote.

  2. Rep. Lizzie Fletcher (TX-7), won re-election with 50.8% of the vote.

  3. Rep. Haley Stevens (MI-11), won re-election with 50.2% of the vote.

  4. Rep. Josh Harder (CA-10), won re-election with 55.2% of the vote.

  5. Rep. Cindy Axne (IA-3), won re-election with 49.7% of the vote.

  6. Rep. Susie Lee (NV-3), won re-election with 48.8% of the vote.

  7. Rep. Angie Craig (MN-2), won re-election with 48.2% of the vote.

  8. Rep. Andy Kim (NJ-03), won re-election with 53.2% of the vote.

  9. Rep. Abigail Spanberger (VA-7), won re-election with 50.9% of the vote.

  10. Rep. Sharice David (KS-03), won re-election with 53.6% of the vote.

  11. Rep. Antonio Delgado (NY-19), won re-election with 54.2% of the vote.

  12. Rep. Elaine Luria (VA-2), won re-election with 51.5% of the vote.

  13. Rep. Dean Phillips (MN-3), won re-election with 55.6% of the vote.

  14. Rep. Greg Stanton (AZ-9), won re-election with 61.6% of the vote.

  15. Rep. David Trone (MD-6), won re-election with 58.9% of the vote.

 

Photo Credit: Ron Cogswell


How Many IRS Employees Does it Take to Replace an Ink Cartridge? 

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Posted by Isabelle Morales on Friday, May 7th, 2021, 4:00 PM PERMALINK

Dozens of printers used at IRS tax processing centers are unusable because they are out of ink or because the waste cartridge container is full and employees haven't bothered to empty the containers, according to an Inspector General report. 

As part of TIGTA’s 2020 IRS audit, released today, audit teams have been performing on-site walkthroughs at the Ogden, Utah, and Kansas City, Missouri, Tax Processing Centers “to meet with staff to discuss challenges they are facing as it relates to addressing the ongoing backlogs of inventory.” 

Audit teams identified a lack of working printers as “a major concern” and estimated that 42 percent of printers were unusable as of March 30, 2021.

In many cases the only thing wrong with the printers is that no employee had replaced the ink or emptied the waste cartridge container: 

“IRS employees stated that the only reason they could not use many of these devices is because they are out of ink or because the waste cartridge container is full.” 

As TIGTA notes, the printing issue had been ongoing since March 2020. The IRS changed contractors in October 2020, nearly six months after the problem was identified. However, in many cases, the new contractor still has not come into IRS sites to replace old printers:

“The contract for supplies and service of the printers ended in September 2020. However, due to COVID-19, these printers remain in the Tax Processing Centers, and the IRS is continuing to use them. The employees we spoke with stated that the IRS entered into a new contract in October 2020 to obtain new printers from a different provider. However, they indicated that the new contractor may not have been coming into the sites to replace the old printers due to COVID-19 concerns.” 

This report again demonstrates the ineptitude of the IRS. The agency’s inability to do its job is due to incompetence, not lack of funding.

Previous reports have demonstrated this incompetence: 

  • In 2016, the IRS has lost track of laptops containing sensitive taxpayer data. TIGTA estimates that the IRS had failed to properly document the return of 84.2 percent, or more than 1,000 computers due to be returned by contract employees. 
  • A Treasury Inspector General for Tax Administration (TIGTA) report in 2017 showed that the IRS rehired more than 200 employees who were previously employed by the agency, but fired for previous conduct or performance issues.
  • Each year the IRS hangs up on millions of callers -- a practice they refer to as “Courtesy Disconnects.” Currently, if you call the IRS, you have a 1-in-50 chance of reaching a human being. 
  • According to the National Taxpayer Advocate’s 2014 Annual Report to Congress the IRS was unable to justify spending decisions. As the report stated: "The IRS lacks a principled basis for making the difficult resource allocation decisions necessitated by today’s tight budget environment.” 
  • The agency has also repeatedly failed to compile legally required tax complexity reports. These reports are supposed to contain the IRS's specific recommendations on how to make the tax code easier to comply with. Since 1998, the IRS has done so just twice – in 2000 and 2002. 
  • Other reports have detailed the countless wasteful spending habits of the agency. A 2015 report found the IRS spends over 500,000 hours per year on “union activities” which could instead be used to answer 2.3 million additional phone calls.  
  • It was revealed that the IRS was spending $1,000 an hour hiring a litigation-only white shoe law firm for an investigation in 2015, despite having over 40,000 employees dedicated to enforcement efforts.  
  • In 2015, the agency has been caught red-handed wasting taxpayer dollars on Nerf footballs, the world’s largest crossword puzzle, extravagant $100 dollar lunches, and more.  

 

While the IRS continues to blame poor service on budget constraints, countless reports point to the real problem – the inability of the agency to competently complete basic tasks and spend taxpayer dollars in a responsible way. 

Photo Credit: Bonnie Natko


New Poll Shows Voters Understand that Tax Hikes Will Increase Cost of Goods and Services, Harm Wages

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Posted by Isabelle Morales on Friday, May 7th, 2021, 1:50 PM PERMALINK

Voters understand that raising taxes on businesses will lower wages and increase the costs of goods and services, according to a recent poll by HarrisX commissioned by Americans for Tax Reform. 

58 percent of respondents said that raising taxes on businesses will harm the cost of goods and services, with 22 percent saying it would help the cost of goods and services, and 19 percent saying it would make no difference.  51 percent of respondents also said that raising taxes on businesses would harm wages, with 25 percent it would help wages, and 24 percent saying it would make no difference.

While Biden claims his tax hikes will be imposed on “large corporations,” they will also harm the American economy and working families.

For instance:

  • Biden’s tax hikes would eliminate one million jobs in the first two years and would eliminate 600,000 jobs per year over the first decade, according to a study by economists John W. Diamond and George R. Zodrow, commissioned by the National Association of Manufacturers. 
  • As noted by Stephen Entin of the Tax Foundation, workers bear 50 to 70 percent of the cost of a corporate tax through lower wages and fewer jobs. In this way, voters are correct to conclude that tax hikes will harm wages. 
  • A recent National Bureau of Economic Research paper found that increasing the corporate tax rate by one percentage point leads to a 0.17% increase in retail product prices. They also estimate that 31 percent of the corporate tax rate is borne by consumers through higher prices. Again, voters are correct to conclude that tax hikes will increase the costs of goods and services. 

 

These results are consistent with other polls indicating that voters understand the way tax hikes can harm working families, investment, and jobs. For example, 59 percent of voters said that raising taxes would cause jobs to be shipped overseas, while 60 percent of voters said it would cause jobs to be created overseas rather than in the United States. 

The poll was conducted by HarrisX between March 31 to April 6 among 4,577 registered voters. The margin of error of this poll is plus or minus 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.

Key findings include:  

Voter were asked if raising taxes on businesses help, harm or make no difference for the cost of goods and services. A majority of voters answered, “harm.” 

  • 58 percent of respondents said that raising taxes on businesses will harm the cost of goods and services, with 22 percent saying it would help the cost of goods and services, and 19 percent saying it would make no difference.  
  • 72 percent of Republicans indicated that raising taxes would harm costs, including 46 percent of Democrats and 56 percent of Independents. 
  • 63 percent of suburban residents said that tax hikes would harm costs, along with 70 percent of rural residents.  

 

Voter were asked if raising taxes on businesses help, harm or make no difference for wages. A majority of voters answered, “harm.” 

  • 51 percent of respondents said that raising taxes on businesses would harm wages, with 25 percent it would help wages, and 24 percent saying it would make no difference.
  • 55 percent of suburban voters indicated that raising taxes would harm wages, including 62 percent of rural voters. 
  • 57 percent of polltakers with “high knowledge” about taxes said that raising taxes on businesses would depress wages.  

 

Photo Credit: Zoetnet


Dismal Jobs Report Should Serve as Warning Against Tax Hikes

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Posted by Isabelle Morales on Friday, May 7th, 2021, 12:25 PM PERMALINK

The U.S. economy added just 266,000 jobs in April and the unemployment rate rose to 6.1 percent, a far cry from Dow Jones estimates which predicted 1 million new jobs and an unemployment rate of 5.8 percent. While it's good that 266,000 people got jobs last month, there is still a long way to go to recover from the pandemic.

Nearly 40 percent of jobs lost during the pandemic have not been recovered and 8.3 million Americans are still out of work. Further, millions of Americans are still underemployed. About 5.2 million workers are employed part-time for economic reasons, meaning they would prefer to work full-time, but cannot gain the hours needed to do so. March’s reported employment gains were also revised downward by nearly 150,000 jobs, from  960,000 to 770,000 jobs.

Given the still-recovering economy, now is not the right time to impose Biden's $3.5 trillion in new taxes, including taxes that will harm small businesses, working families, and investment. 

The American people share this concern. In fact, voters believe, by an 80 to 20 margin, that we should not raise taxes coming out of the pandemic, according to a new poll conducted by HarrisX and commissioned by Americans for Tax Reform. 

Biden’s tax hikes would eliminate one million jobs in the first two years and would eliminate 600,000 jobs per year over the first decade, according to a study by economists John W. Diamond and George R. Zodrow, commissioned by the National Association of Manufacturers.  

As noted by Stephen Entin of the Tax Foundation, workers bear nearly 70 percent of the cost of a corporate tax through lower wages and fewer jobs.  

Republican tax cuts and deregulation ensured that the economy was the strongest it had been in modern history. Before the pandemic hit, the unemployment rate was 3.5 percent. Over 5.1 million jobs were created from December 2017 to February 2020. Median household income increased by $4,440 or 6.8% in 2019 -- the largest one-year wage growth in history. Unemployment rates for Black Americans was 5.8 percent, with Hispanic unemployment standing at 4.4 percent. 

The Biden administration should not attempt a recovery which implements policies contrary to ones which caused the strongest economy in modern history.

As Jason Furman, an economist at Harvard University explains, “I think this is just as much about a shortage in labor supply as it is about a shortage of labor demand. If you look at April, it appears that there were about 1.1 unemployed workers for every job opening. So there are a lot of jobs out there, there is just still not a lot of labor supply.” 

One reason for this dismal jobs report is Democrats' policy to pay people not to work. At the current federal unemployment supplement level of $300, 37 percent of workers make more on unemployment than at work. In this way, the federal government is offering over one-third of the workforce an incentive not to work. Others have said that, because schools and day care centers have not gone back to normal operations, parents are prevented from going back to work.

While we currently face a problem with labor supply, President Biden’s proposed $3.5 trillion in tax hikes would threaten labor demand as well.

Today's disappointing jobs report shows that we still have a long way to go to fully recover from the economic damage the pandemic caused. With 8.3 million people still out of work and 5.2 million people underemployed, now is a bad time to impose $3.5 trillion in taxes hikes on small businesses, working families, and investment.

Photo Credit: Department of Labor


New Jersey Residents Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike

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Posted by John Kartch on Friday, May 7th, 2021, 10:15 AM PERMALINK

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, New Jersey 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 fourteen New Jersey utilities. The savings take the form of either a rate reduction, or, a reduction to an existing rate increase.

Working with the New Jersey Board of Public Utilities, Atlantic City Electric, New Jersey American Water, New Jersey Natural Gas, Public Service Enterprise Group, Rockland Electric Company, Atlantic City Sewerage Company, SUEZ Water New Jersey, Inc., Middlesex Water Company, Gordon’s Corner Water Company, Jersey Central Power and Light Company, South Jersey Gas Company, Elizabethtown Gas, Aqua New Jersey, and New Jersey-American Water Company passed along tax savings to their customers. 

Atlantic City Electric: As noted in this April 3, 2018, Exelon Utilities press release excerpt:

Atlantic City Electric will provide $23 million in annual tax savings to its customers. The company made a filing this month with the New Jersey Board of Public Utilities, which was approved on March 26, 2018. Customers will begin to see reductions on their bills around April 1, 2018. 

New Jersey American Water: As noted in this May 11, 2018, BusinessWire article excerpt:

New Jersey American Water customers also recently had a rate decrease as a result of the Tax Cuts and Jobs Act. On April 1, 2018, most customer water rates were reduced by 5.9 percent (and 2.3 percent for former Shorelands Water Company customers). The water bill for the average residential customer using 6,000 gallons a month decreased approximately $3.36 per month ($1.00 per month for former Shorelands customers), and the average residential wastewater bill decreased between $1.49 and $5.81 per month, depending on service area.

The BPU is continuing their review of the overall impact of the new tax act, and further rate adjustments are anticipated in the coming months.

New Jersey Natural Gas: As noted in this March 2, 2018 New Jersey Resources press release excerpt:

New Jersey Natural Gas (NJNG), a regulated subsidiary of New Jersey Resources (NYSE: NJR), today submitted a filing to the New Jersey Board of Public Utilities (BPU) to pass through the benefits of the recently enacted federal tax reform to customers. NJNG announced it will reduce customers’ rates by $21 million, effective April 1, 2018, resulting in a $31, or 3 percent, decrease to a typical residential heating customer’s annual bill.

NJNG also announced it will provide a one-time refund to customers totaling approximately $31 million. The estimated refund for a typical residential heat customer is $47. The actual refund amounts will be determined in May and reflect individual customer usage. Pending BPU approval, customers can expect to see these savings in their May or June bills.

For the rate decrease, a typical residential heating customer using 1,000 therms a year will see their annual bill go from $1,054 to $1,023, a savings of $31. When combined with the one-time refund, the customer will see an overall reduction of $78 or 7.4 percent this year. This adjustment will help ensure rates reflect the lower tax structure and any appropriate savings are passed on to customers.

“Our top priority is to ensure we deliver safe, reliable and affordable service to our customers, said Laurence M. Downes, chairman and CEO of New Jersey Resources. “We are pleased to pass along the benefits of tax reform to our customers through lower energy bills.”

Public Service Enterprise Group: As noted in this March 2, 2018, PSE&G Press Release:

Public Service Electric and Gas Co. (PSE&G) today proposed to lower customer bills by approximately 2 percent on April 1 to pass on the benefits of the federal tax reform legislation enacted earlier this year.

In its filing with the NJ Board of Public Utilities, PSE&G will reduce rates by approximately $114 million on an annual basis effective April 1 to reflect lower federal taxes the utility will pay. The typical residential combined electric and gas customer will save nearly $41 per year.

Rockland Electric Company: As noted in this June 22, 2018 New Jersey Board of Public Utilities Document:

On March 2, 2018, the Company filed its petition pursuant to the Generic TCJA Order, including proposed tariffs as well as a proposed plan. Specifically, RECO's petition stated that the 2017  TCJA would result in an annual revenue requirement reduction for the Company of approximately $2.868 million, as of April 1, 2018. The Company decreased its net deferred tax liabilities by $45 million, decreased its regulatory asset of future income tax by $17.million and accrued a regulatory liability for future income tax of $28 million. REGO calculated its new interim rates effective April 1, 2018 using billing determinants underlying the distribution rates established in RECO's 2016 Base Rate Case. The Company calculated the current level of revenue based on the currently effective rates and allocated the distribution decrease among the service classifications in proportion to the relative contribution made by each class to the total current level of revenue. 

The Company proposed to return to ratepayers the amounts deferred pursuant to the Generic TCJA Order for the period of January 1, 2018 until the effective date of the Company's new rates, by means of a sur-credit. The Company proposed to employ a short-term borrowing rate to accrue interest on the deferred amounts until the Company's returns such amount to ratepayers. The Company would return this total deferral amount over twelve (12) consecutive calendar months, commencing with the month immediately following when the Board issues an order approving the Company's new rate. The sur-credit would be applied to all service classifications on an equal per kWh basis for the twelve (12) month period. According to the petition, the Company's final effective rates reflect the proposed refund of the full amount of the excess accumulated deferred federal income tax liability to ratepayers.

Atlantic City Sewerage Company: As noted in this February 27, 2019 New Jersey Board of Public Utilities Document

The Update noted that effective April 1, 2018, ACSC implemented a rate decrease, to reflect the fact that the tax expense reflected in ACSC's rates had been calculated at the statutory 34% rate. The new rates, made effective April 1, 2018, were based upon the new statutory rate of 21%. 

The Update noted that the April 1, 2018 rate reduction was based upon a reduction in income tax expense of $319,945.00. After applying ACSC's gross up factor, the rate decrease became an annual revenue reduction of $472,838.00. 

SUEZ Water New Jersey, Inc.: As noted in this February 27, 2019 New Jersey Board of Public Utilities Document

On March 5, 2018, pursuant to the Generic Tax Order, SUEZ Water New Jersey, Inc., SUEZ Water Toms River, Inc. and SUEZ Water Arlington Hills, Inc. (collectively, "Joint Petitioners" or "Companies") filed a joint petition requesting Board approval to implement a reduction in base rates effective April 1, 2018, of $12.1 million for SUEZ Water New Jersey, Inc., $1.6 million for SUEZ Water Toms River, Inc. and $0.2 million for SUEZ Water Arlington Hills, Inc. 

On March 26, 2018, the Board issued an Order ("March 2018 Order") approving the implementation of the Joint Petitioners' proposed rate reduction on an interim basis, effective April 1, 2018. The proposed refund and other rider tariffs were deferred until a later date. 

Middlesex Water Company: As noted in this August 29, 2018 New Jersey Board of Public Utilities Document

On March 26, 2018, the Board issued an Order Adopting Initial Decision/Settlement ("Middlesex Rate Case Order'') in BPU Docket No. WR17101049, Middlesex's most recent base rate case. 3 This Order adopted a Stipulation of Settlement ("Rate Case Stipulation") executed by Middlesex, the New Jersey Division of Rate Counsel and Board Staff ("Parties"). Under the Rate Case Stipulation, the Parties agreed that the Company included in the Rate Case Stipulation the effect on Middlesex's rates of both phases of the required calculations as set forth in the Board's Generic Tax Order.4 This included $500,000 for Phase Two adjustments accounted for as a result of an analysis performed by the Company and reviewed by the Parties. 5 The Parties further agreed in the Rate Case Stipulation to continue to review any calculations associated with the Company's Phase Two adjustments on an ongoing basis, and to resolve any issues if they were to arise. 6 In addition, the Company agreed that, in the event the Phase Two adjustment resulted in less than the $500,000 returned to customers with the Board's approval of the Rate Case Stipulation, no further adjustment will be made.

Gordon’s Corner Water Company: As noted in this August 29, 2018 New Jersey Board of Public Utilities Document

The Parties stipulated and agreed that all issues and requirements set forth in the Generic Tax Order as applied to Gordon's Corner were resolved. 5 Consistent with the Rate CaseStipulation, Gordon's Corner's new rates to be set as a result of that case include a one-time $0.56 (i.e., a 56 cent) credit per customer, reflecting a stub period total credit due to customers of $8,394. This credit resolves both this matter with respect to Docket No. Ax:18010001 as well as all issues in the Gordon's Corner Rate Case, associated with both Phase One and Phase Two of the Generic Tax Order. The Board NOTES that Gordon's Corner has already complied with Phase One of the Generic Tax Order by lowering its volumetric rate from $5.15 to $5.04, or $154,676 on an annual basis, The Board FURTHER NOTES that the new base rates agreed to by the Rate Case Stipulation reflect a rate base adjustment of $137,421, which represents the Accelerated Deferred Income Tax owed to ratepayers pursuant to the 2017 Tax Cuts Act.

Jersey Central Power and Light Company: As noted in this May 8, 2019 New Jersey Board of Public Utilities Document

On March 2, 2018, the Company filed a petition pursuant to the Generic TCJA Order, which included proposed tariffs as well as a proposed plan. According to the petition, JCP&L recalculated its base rates to incorporate the impact of the mandatory reduction in the federal corporate income tax ("FIT") rate from 35% percent to 21%, effective January 1, 2018 in accordance with the 2017 Act and the Generic TCJA Order. JCP&L's proposed methodology and quantifications of the effects of the 2017 Act included the following: (1) a reduction in the FIT rate which would result in a base rate reduction of $28.6 million annually for the Company; (2) a deferral, as a regulatory liability, of $6.3 million on its books, with interest, for the impact of the reduction in the FIT rate on its tax gross-up between January 1, 2018 and March 31, 2018; and (3) non-rate base (unprotected) Excess Deferred Income Taxes ("EDITs") of $90.89 million to be amortized over a ten-year period (levelized).

South Jersey Gas Company: As noted in this September 17, 2018 New Jersey Board of Public Utilities Document

On March 2, 2018, the Company filed its petition pursuant to the Generic TCJA Order, including proposed tariffs as well as a proposed plan. Specifically, SJG stated that it planned: (1) a reduction in base rates of $25.88 million effective April 1, 2018; (2) a corresponding estimated $12.88 million refund to customers for the period January 1, 2018 through March 31, 2018 for the corresponding rate adjustment (including interest at the Company's short-term debt rate and (3) are-measurement and adjustment to rates related tci the "Unprotected" excess deferred income taxes of approximately $27.1 million associated with the implementation of the 2017 Act. 

Elizabethtown Gas: As noted in this June 22, 2018 New Jersey Board of Public Utilities Document

On March 2, 2018, the Company filed its petition pursuant to the Generic TCJA Order, including proposed tariffs as w~II as a proposed plan. Specifically, ETG requested an annual reduction in firm distribution revenues of $10,938,818, effective April 1, 2018, which represents a 6.6% decrease. The Company also requested authorization to refund to customers for the difference between the effective April 1, 2018 rate and charges for January 1, 2018 through March 31, 2018, which was estimated to be $5.6 million. The Company proposed to refund the $5.6 million in a billing cycle during or before September 2018. Alternatively, the Company proposed to provide the refunds in May 2018 by filing a true-up after final rate approval by the Board. ETG proposed that the one-time refund would include interest at the Company's short-term debt rate as specified in the Company's last base rate case3 and· New Jersey Sales and Use Tax. ETG's calculations include an adjustment to eliminate all Investment tax credits for the revenue requirements. The Company's revenue factor will be reduced to 1.40828098. Additionally, the Company will use the Average Rate Assumption Method ("ARAM") to amortize the protected excess deferred tax liability and proposed to amortize the unprotected potions of the excess • over five (5) years. ETG's rate base includes an offset for deferred taxes, a portion of which will be used to provide customers an ongoing carrying cost benefit to the pre-tax weighted average cost of capital. To accomplish the rate reduction, the Company proposed to only reduce the distribution charges of its firm service classification and leave the monthly service charges untouched. The Weather Normalization Clause Margin Revenue Factor would be adjusted, effective January 1, 2018, to realize the full benefit of the 2017 Tax Act. 

Aqua New Jersey: As noted in this July 25, 2018 New Jersey Board of Public Utilities Document

On March 2, 2018, the Company filed its petition pursuant to the January 31, 2018 Generic TCJA Order, including proposed tariffs as well as a proposed plan. The Company's filing and proposed tariffs did not include an across-the-board rate reduction reflecting the reduction in the corporate tax rate from thirty-five percent (35%) to twenty-one (21 %). Therefore, Aqua refiled its petition ("Tax Rate Adjustment Filing") which reflected the reduction in the corporate tax rate from thirty-five percent (35%) to twenty-one percent (21%) on March 19, 2018.
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The Company represented that this rate change and one-time refund results in an overall rate decrease of approximately 6.8% to the average residential water customer using 5,000 gallons of water per month.

New Jersey-American Water Company: As noted in this July 10, 2019 New Jersey Board of Public Utilities Document

The Signatory Parties have reviewed the Company's filing, exchanged discovery, filed comments and reply comments, and reached a resolution with regard to the disposition of the stub period amount and the difference between the originally implemented rate decrease of 5.88% and the agreed upon rate decrease of 6.12%. The resulting Partial Stipulation will result in NJAW issuing the agreed upon one-time credit to its customers. 

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.


Sen. Durbin’s Plan To Tax The Poor – And Keep Them Smoking

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Posted by Tim Andrews on Friday, May 7th, 2021, 9:46 AM PERMALINK

Most attention in the tobacco and harm reduction space this last week was focussed on a proposal by the FDA to bring back the failed policies of the past and introduce prohibition for menthol cigarettes, a move opposed by a bipartisan coalition of over 50 organizations from all sides of the political spectrum, including the American Civil Liberties Union, the Rev Al Sharpton, Americans for Tax Reform, and Heritage Action. Given how this proposal would do nothing to reduce smoking rates, but instead criminalizing a product used by over 18 million Americans, primarily from minority communities, create dangerous confrontations between minorities and law enforcement, set back criminal justice reform, create a windfall for international criminal syndicates, and hurt state government windfall, this is understandable. 

Sadly, however, this was not the only bad proposal coming from Democrats recently in this field.  Not content with proposing to punish Americans saving for retirement with crippling capital gains taxes on their nest eggs, or reducing worker salaries through hiking the corporate tax, late last week Senator Durbin & congressional democrats unveiled plans to introduce one of the most regressive tax hikes on poorest Americans in living memory. In clear violation of President Biden’s unequivocal promise to not raise taxes on Americans earning under $400,000, if this bill was to pass, poorer Americans unable to quit smoking would be slugged with a doubling of the federal tobacco tax. To make matters worse, in an even more cynical grab for cash, the plan would also impose crippling new taxes on the most effective quitting aids on the market, forcing people to continue smoking to help feed Congress’s addiction to taxpayer cash.

With 72% of smokers coming from low-income communities, the burden of tobacco taxation already falls heavily on those who can least afford it. More than a quarter of Americans living below the poverty line smoke, and when combined with state and local taxes, pack-a-day minimum wage workers could be spending over half their annual salary on their habit.

Empirical data demonstrates that cigarette taxes no longer having any impact upon smoking rates, the outcomes are tragic. Either families cut back and struggle to put food on the table, or they turn to the black market, purchasing illicit low-cost tobacco. This black market trade, already accounting for more than 50% of all tobacco sales in cities like New York, not only deprives federal and state governments of revenue, but is a major source of funding for international criminal syndicates, which, according to the State Department, are becoming dominated by terrorist organizations to the extent it now represent a serious “threat to national security”. 

Rather than propose a tax that would do nothing to reduce smoking rates, but would hurt low-income earners, reduce state government revenue, and enrich criminal syndicates, Sen. Durbin should instead seek to follow the science, and heed the advice of over 40 of the world’s leading medical organizations. By delivering nicotine, itself a benign, albeit highly addictive, substance similar to caffeine, without the thousands of deadly chemical created by the combustion process of “burning” cigarettes,  innovative new technologies have helped smokers around the world quit in record numbers.

The evidence is clear that vapor products have been proven to be 95% safer than combustible cigarettes, at least twice as effective at helping smokers quit than traditional nicotine replacement therapies, and with a 92.5% success rate at reducing or eliminating smoking rates amongst people suffering from mental health issues, who presently smoke at three times the general population rate. According to Georgetown University Medical Center, if a majority of American smokers switched to vaping,  6.6 million lives would be saved. 

Rather than helping smokers quit, however, Sen. Durbin bizarrely instead proposes to keep smokers hooked to their deadly habit, by making these life-saving products unaffordable with a slew of new taxes. These proposals include not only staggering new taxes on vapor products, but a two thousand fold increase in the tax on other reduced risk products. This includes on those that the Food & Drug Administration authorizers manufacturers to market as one that would “reduce your risk of cancer”. According to modeling undertaken by the National Bureau of Economic Research, were Sen. Durbin’s proposal enacted, it would prevent a staggering 2.75 million people from quitting smoking. 

With fewer than 5% of young Americans smoking, the priority of Federal lawmakers must now be how to help adult smokers quit. Sadly, in their desperate grab for cash to pay for chronic overspending, Sen. Durbin and his allies would seem to prefer smokers continue smoking -  and die as a result. The time has come for President Biden to show leadership, reiterate his pre-election promise, and pledge to fight against this immoral bill. Millions of lives depend on it.

Photo Credit: Adam Fagen

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Germany's Merkel Clashes With Biden And Pushes Back On Vaccine Patent Waiver

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Posted by Andreas Hellmann on Thursday, May 6th, 2021, 2:16 PM PERMALINK

The Biden administration is supporting a proposal that would suspend all intellectual property rights for COVID-19 vaccines and would authorize the sharing of United States COVID-related IP with foreign nations. The petition by South Africa and India at the World Trade Organization (WTO) to waive most of the protections in the Trade-Related Aspects of Intellectual Property Rights (TRIPS) would undermine U.S. medical innovation, endanger American jobs and not help to fight the pandemic. 

German Chancellor Angela Merkel disagrees with President Biden saying that patent protection for COVID-19 vaccines "must remain in place". Merkel's spokesperson added: "The limiting factor for the production of vaccines are manufacturing capacities and high-quality standards, not the patents" and "the protection of intellectual property is a source of innovation and this has to remain so in the future."

Biden’s proposal of removing intellectual property rights would benefit Chinese manufacturers who have been trying to steal American innovation for over a year, which was considered a national security risk not too long ago. Instead of resulting in a rapid increase of safe and effective vaccines, this proposal will dilute the world supply with false, substandard, and counterfeit vaccines by illicit manufacturers and will not help to end the pandemic.

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Tennessee’s Fiscal Responsibility Sets Nashville Music Scene Apart From New York, Los Angeles

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Posted by Karl Abramson on Thursday, May 6th, 2021, 2:04 PM PERMALINK

The vibrant music scene in Nashville, Tennessee has earned the area a well-deserved nickname: “The Music City”. While the origins of the moniker are unknown, it is believed that the first person to call Nashville “Music City” was Queen Victoria when she remarked that the Fisk Jubilee Singers, an African American choral ensemble from Fisk University in Nashville, had such beautiful voices they must have come from “Music City”.  

Perhaps a more fitting nickname, however, would be “The City of Music and Low Taxes”, as the incredible success of Nashville’s music industry is aided by Tennessee’s zero personal income tax and low regulations that have allowed Nashville’s music scene to be the fastest growing in the country by a landslide. 

The total economic impact of the music industry in the United States has increased by 9.2% since 2013, totaling more than $500 billion dollars a year. However, this growth is dwarfed by the massive success of Nashville’s music industry which has grown since 2013 by a staggering 43%. 

The music industry in Nashville contributes 80% more today to the Tennessee’s gross domestic product (GDP) than it did in 2013. This has given Nashville the opportunity to improve its already strong quality of life as tens millions of dollars each year in music-related tax revenue goes toward funding public works programs, community safety initiatives, and wage hikes for K-12 teachers. 

Compared to the ten largest cities for music-related jobs in the U.S., Nashville ranks first for net job growth as well as overall growth rate. In 2012, Nashville’s music industry employed 27,000 people. As of 2019, it had swelled to 41,000. Further, these jobs are incredibly well-paying. The median annual earnings for music and entertainment industry jobs in Tennessee is over three times the annual median earnings nationwide for all employment. 

Even though New York and Los Angeles employ more total people, Nashville’s per capita music industry employment is over three times that of Los Angeles’ and nearly four times higher than New York’s. More striking, however, is the disparity in job growth. Between 2009 and 2019, jobs in Nashville’s music industry have increased 31%. In Los Angeles, industry job growth is 2%. In New York, there has been a paltry net increase of ten total jobs over the ten-year period.  

The Recording Industry Association of America published a report on Nashville’s music industry, attributing its success to “the entrepreneurial drive that has characterized Nashville’s music industry from the start”, adding that it, “continues to be the core of this unique industry cluster.” This is largely due to Tennessee’s fiscally responsible economic policies that promote innovation and entrepreneurship through low taxes and reasonable regulations. 

In addition, Tennessee’s cost of living is the second lowest in the country, an attractive feature for young singers, songwriters, and producers looking to make a living in music or entertainment. Meanwhile, New York’s cost of living is third highest in the nation, just barely beating out California, which ranks second. The tax burden in Tennessee is also the second lowest in the country. Sales and property taxes are minimal, and the state’s personal income tax rate is zero.  

The Tennessee Entertainment Commission advertises the advantages of moving a music or entertainment company to Nashville. One of those advantages is free use of state-owned property for shooting music videos or feature films. As maintenance of this property is paid for by taxpayers, this is a simple, common sense policy that helps set Tennessee apart from its competition. Another noted advantage is Tennessee's status as a right-to-work state. Unionized and non-unionized workers are guaranteed equal treatment under the law, ensuring freedom of choice for workers considering unionization. 

Tennessee has prioritized fiscal responsibility, allowing Nashville’s music industry to grow in unprecedented numbers. Even though the Covid-19 pandemic has done considerable damage to many small businesses across the U.S., with the music industry being no exception, experts predict this downturn will be short-lived. While revenues are understandably down in 2020, the industry is poised for, and expected to have, a robust comeback.

The Music City has been an integral part of the American music and cultural experience for over a century. With the assistance of sound fiscal policies that make Tennessee one of the most economically competitive states in the nation, Nashville’s music industry will certainly continue to be a hub for musical innovation for decades to come. 

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Biden Admin Surrenders on American IP Rights

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Posted by Isabelle Morales on Thursday, May 6th, 2021, 12:20 PM PERMALINK

The Biden administration is backing a global effort to suspend all intellectual property (IP) rights for COVID-19 innovations, a move that would do little to help end the pandemic but would undermine U.S. medical innovation, jobs, and the Constitution.  

Strong IP protections have facilitated the creation of several highly effective COVID-19 vaccines at a record pace.

Biden’s decision to support an IP waiver for COVID-19 innovations will create a precedent that IP rights can easily be waived or undermined when government bureaucrats find it convenient. Surrendering on IP rights will also provide an implicit endorsement of the rampant theft of American IP by China. The U.S. should be doing more, not less to defend American IP.  

Foreign countries like India and South Africa have been petitioning the World Trade Organization (WTO) to suspend IP rights associated with COVID-19 innovations.

The Chinese state media has already praised President Biden for giving into "global pressure."

Chen Weihua of China Daily, China state-affiliated media, replied to the decision in a tweet:

According to the Washington Post, the administration’s decision was made in a Tuesday meeting with President Biden. Commerce Secretary Gina Raimondo, who had concerns about the waiver, was not included in the meeting. 

IP rights are explicitly protected in the constitution. The Founding Fathers recognized the importance of intellectual property rights in Article 1, Section 8 of the Constitution. “To promote the Progress of Science and useful Arts, by securing for limited times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”   

Strong IP rights are vital because they turn new ideas into tangible goods and services that improve the quality of life for Americans by creating high-paying jobs and increasing economic growth.    

Without IP rights, medical innovators will have no incentive to create new treatments and cures as they will have no way to recoup the investments they made in developing new medicines. Patent exclusivity for medicines has been deliberately legislated to ensure that creativity, innovation, and medical growth are protected.   

Because of these policies, the U.S. is a world leader when it comes to medical innovation. According to research by the Galen Institute, 290 new medical substances were launched worldwide between 2011 and 2018. The U.S. had access to 90 percent of these cures, a rate far greater than comparable foreign countries. By comparison, the United Kingdom had access to 60 percent of medicines, Japan had 50 percent, and Canada had just 44 percent.  

Strong IP for medicines also supports millions of American jobs. Nationwide, the pharmaceutical industry directly or indirectly accounts for over four million jobs across the U.S and in every state, according to research by TEconomy Partners, LLC. This includes 800,000 direct jobs, 1.4 million indirect jobs, and 1.8 million induced jobs, which include retail and service jobs that are supported by spending from pharmaceutical workers and suppliers.  

The average annual wage of a pharmaceutical worker in 2017 was $126,587, which is more than double the average private sector wage of $60,000.  

Conservatives should oppose this effort to undermine IP rights.

Many lawmakers have rightly spoken out against this decision already. For instance, Senator Richard Burr (R-N.C.) and Ways and Means Republican Leader Kevin Brady (R-Texas) have condemned Biden’s decision to surrender on American IP protections. In addition, the Republican Study Committee announced in a tweet that Rep. Byron Donalds (R-Fla.) will be soon introducing a bill to prevent the Biden admin from undermining IP rights.

The Biden administration should reverse it’s position. Rather than surrendering to foreign governments and global bureaucracies, the administration should stand strong and protect intellectual property rights.

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ATR Tells Congress Don't Waste Taxpayer Dollars on Broadband Failures

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Posted by Katie McAuliffe on Thursday, May 6th, 2021, 11:25 AM PERMALINK

WASHINGTON – Today, Americans for Tax Reform sent a letter to the House Energy and Commerce Subcommittee on Communications and Technology urging them to avoid the Biden Administration impulse to throw taxpayer dollars into broadband subsidies that are already proven failures.

Our letter highlights policies that Congress should follow if taxpayer dollars are to be spent closing the digital divide. Some our recommendations include: 

  1. Follow a technology neutral approach to broadband delivery.  
  2. Continue to champion private-sector investment over government-owned networks (GONs). 
  3. Continue our light-touch regulatory framework that put us ahead of our European counterparts. 
  4. Enact meaning reform to the Lifeline program. 

 

The Subcommittee will be holding a hearing today on this issue today. You can read the letter below or click HERE  to view it as a pdf. 

May 06, 2021

The Honorable
Michael F. Doyle, Chairman
U.S. House of Representatives
Subcmte on Communications & Technology
2123 Rayburn House Office Building
Washington, DC 20515
The Honorable
Robert E. Latta, Ranking Member
U.S. House of Representatives
Subcmte on Communications & Technology
3222-A Rayburn House Office Building
Washington, DC 20515

 

Dear Representatives:

If Congress is to address broadband connectivity and cost issues, we urge you to do so in a targeted, cost-effective way that considers the entire broadband universe, rather than the narrowly defined, non-technology neutral view proposed by the Biden Administration.

Congress should avoid overly restrictive definitions of what constitutes broadband. There are more choices than fiber. Cable, wireless, fixed wireless, satellite are all acceptable methods for achieving speeds that meet the needs of Americans now and into the future for working remotely, telehealth, remote learning, and entertainment. According to Zoom, only 2 Mbps is required for high-quality video calling for both upstream and downstream, while Netflix requires only 0.5 Mbps per second. Calls for symmetrical speeds at 100 up and 100 down end up mandating on fiber and doesn’t take into consideration the asymmetrical needs of individual broadband users or the ability of private networks of to upgrade to meet demand over time.

While the government may be suggesting an influx of $100 billion is revolutionary, it is not. A one-time spend, on a chosen technology, with a preference for government operators who will likely compete with existing private networks will not address the remaining digital divide.

The private sector has invested over $1.6 trillion into wireline broadband since 1997 and after the lifting of several government restrictions, the private sector invested $80 billion in 2018 alone. The US’s prioritization of investment through both the public and private sector instead of the burdensome government regulation seen throughout Europe leads to better broadband results hands down.

Looking only at wireline broadband connections the US beats out the EU when it comes to provider competition. In 2019 86% of all US households had a choice of two or more providers, while only 46% of Europeans had that choice. In rural areas, 49% of US residents had multiple access points while only 11% had choices in the EU. This isn’t surprising because between 2012 and 2018, US investment in broadband was about 40% higher than in the EU; US broadband providers invest about $708 per household which is about three times higher than in the EU’s $230 per household.

Municipal or government run networks are also not the answer, especially ones that compete with private networks already in place. They can charge below market rates because they receive tax subsidies and they still fail as projects. Taxpayers should not be forced to subsidize an ineffective service they may not even want to use. Similar programs, like the Broadband Technology Opportunities program (BTOP) have been tried and failed.

We hope you will look towards reforming the lifeline program at the FCC to be a sustainable solution to lack of connectivity due to cost, rather than returning to the failed programs of the past. Doing away with the Universal Service fee, which continues to put extreme pressure on a small segment of the population and moving to a Congressionally approved appropriation possibly attached to spectrum proceeds could be a viable solution. Congress should also do away with the Eligible Telecommunications Carriers requirement and move to a voucher program rather than a carrier directed program to increase options to individuals struggling to get online.

Should you have any questions or comments on this matter, please reach out to me, or our Director of Federal Policy, Katie McAuliffe, kmcauliffe@atr.org.

Onward,

Grover G. Norquist
President
Americans for Tax Reform
 

 

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