How the Trump Republican Tax Cuts Are Helping Arizona

Posted by John Kartch on Friday, July 3rd, 2020, 11:00 AM PERMALINK Follow @JohnKartch

Arizona is benefiting greatly from the Tax Cuts and Jobs Act enacted by congressional Republicans and President Trump:

483,360 Arizona households are benefiting from the TCJA’s doubling of the child tax credit.

Every income group in every Arizona congressional district received a tax cut. Nationwide, a typical family of four received a $2,000 annual tax cut and a single parent with one child received a $1,300 annual tax cut.

2,122,290 Arizona households are benefiting from the TCJA’s doubling of the standard deduction. Thanks to the tax cuts, nine out of ten households take the standard deduction which provides tax relief and simplifies the tax filing process.

107,360 Arizona households are benefiting from the TCJA’s elimination of the Obamacare individual mandate tax. Most households hit with this tax made less than $50,000 per year.

Lower utility bills: As a direct result of the TCJA’s corporate tax rate cut, Arizona residents are saving money on utility bills. Lower electric, water, and gas bills help households and small businesses operating on tight margins. Arizona utilities that have passed along tax savings include -- but are not limited to -- Arizona Public Service, Bermuda Water Company, EPCOR USA, and more (see below).

Thanks to the tax cuts, Arizona businesses of all sizes are hiring, expanding, raising pay and increasing employee benefits:

SmithCraft Signs (Phoenix, Arizona) -- Employee bonuses, purchasing new equipment:

MS. BERGSTROM: Oh, thank you. Thank you Mr. President. Wow. I’m Nicole, and I run Smithcraft Signs. We are a veteran-owned, small manufacturing company. We’re a job shop.

And what tax reform means for me is what we can do for our team. To improve our capabilities, we’re buying new equipment. We issued a special bonus to our midlevel employees.

Deeann, in our accounting department told me that she is using the extra money for what she describes as a “dream bucket-list vacation” to visit her daughter who was recently discharged from the Navy who is now in Hawaii.

Phil and NOAZ is using the money for a bathroom remodel he has been planning for over 10 years.

I’ve very excited about what the future holds for us. And again, so many thanks. - April 12, 2018, White House transcript

HT Metals (Tucson, Arizona) - Purchasing new equipment:

His Tucson-based company, HT Metals, cuts pieces for aerospace and medical device industries. In early May, Ruiz told a crowd gathered in Tempe to see Vice President Mike Pence that he recently spent a couple hundred thousand dollars on a new machine.

“And, we get to expense it immediately,” he said. - May 16, 2018, KJZZ.org article excerpt

Pacific Oak Capital and Defer Gain (Phoenix, Arizona) -- The company is building an affordable housing complex in downtown Phoenix that will be located in an Opportunity Zone created by the Tax Cuts and Jobs Act:

Three apartment complexes are headed to an Opportunity Zone in downtown Phoenix, addressing the need for affordable housing. These projects are valued at $61 million.

Investment company Pacific Oak Capital and Defer Gain, an Arizona-based real estate development company specializing in Opportunity Zone investments, have announced a joint venture to develop, finance, and operate multi-family, commercial, and industrial income-producing properties in Arizona Opportunity Zones.

In this first phase, three multi-family housing complexes are being built in downtown Phoenix, the 241-unit St. Ambrose Apartments and the 84-unit Presidential Apartments, and another housing development called Imperial Apartments.

"It's exciting to see Opportunity Zone developments providing support to a critical component of our state's economy — the workforce," said Sandra Watson, President and CEO of the Arizona Commerce Authority. "We thank Pacific Oak and Defer Gain for advancing these three projects in downtown Phoenix neighborhoods."

These properties will include amenities such as mail rooms including secured lockers for packages, grocery delivery and cold/ freezer storage, clubhouses, multi-purpose rooms, private conference rooms, exercise facilities, resort style swimming pools, cabanas with private BBQ's, and access to public transportation. There will also be street level retail and mixed use opportunities for the community.

"Adding quality housing is a top priority for our city. I am excited to see new housing, including much-needed workforce units, near our key job corridors in the downtown and airport area,” Phoenix Mayor Kate Gallego said. -- August 16, 2019 Housing Wire article

Lucid Moters Inc. (Pinal County, Arizona) -- The company is building a production plant in an Opportunity Zone created by the Tax Cuts and Jobs Act:

Arizona's Pinal County has purchased 500 acres of land that it plans to lease and eventually sell to Silicon Valley electric carmaker Lucid Motors Inc ., which plans to create a $700 million production facility on the site.

The plant in Casa Grande, Arizona, will focus be on the Lucid Air, an under-development all-electric luxury sedan that Lucid claims will have a 400-mile range and top speed of 200 mph when it hits the market next year. Lucid eventually plans to employ 2,300 people at the plant, which is expected to begin construction in the second quarter of this year.

In September, Lucid Motors secured a $1 billion investment from Saudi Arabia's sovereign wealth fund. Around the same time, the Business Journal confirmed that it had moved its headquarters and about 300 employees into the former Theranos space in Newark's Pacific Research Center campus, about four miles from incumbent rival Tesla Inc .'s Fremont factory.

Electric car promise

“The convergence of new technologies is reshaping the automobile, but the benefits have yet to be truly realized,” Lucid Chief Technology Officer Peter Rawlinson said when the Saudi investment was announced last year. “This is inhibiting the pace at which sustainable mobility and energy are adopted. At Lucid, we will demonstrate the full potential of the electric connected vehicle in order to push the industry forward.”

Rawlinson helped design Tesla's Model S sedan, but left the company in 2012.

Lucid has said it plans to build two versions of its electric vehicle, going head-to-head in the market that Palo Alto-based Tesla has pioneered. The Lucid vehicles will start at a base price of around $60,000 and will top $100,000 with options.

Arizona plant moves forward

In Arizona, Pinal County stepped in to help the deal for Lucid's new auto plant by consolidating the land under one ownership that eventually would be sold to the carmaker, Pinal County Manager Greg Stanley said. The county closed on the land at the end of 2018, spending $29.94 million through the issuance of bonds.

As part of the agreement, Lucid will pay $1.8 million per year in rent for the first four years of the agreement, and will buy the land in the fifth year, Stanley said. The county will break even on the deal.

Lucid is required to keep funds in an account that, if the plant does not come to fruition, will be used by the county to complete infrastructure improvements on the site to make it a shovel-ready industrial park.

Most of the land was owned by Scottsdale, Arizona, based Saint Holdings before being purchased by the county. Kirk McCarville of Land Advisors brokered a deal for 80 acres from a separate seller of adjacent land, which was purchased by the county as part of the 500-acre total purchase.

Saint Holdings is owner and developer of the Central Arizona Commerce Park, which contains the Lucid land.

“We have quite a bit of interest in the northern parcels,” said Jackob Andersen, president and CEO of Saint Holdings of the Central Arizona Commerce Park, which is also part of an opportunity zone. “We are open for business on the neighboring sites, we hope the others will get auxiliary uses.” -- Feb. 13, 2019 Silicon Valley Business Journal article

Pacific Oak Capital Advisors (Phoenix, Arizona) -- The company is building affordable apartment units in downtown Phoenix in an Opportunity Zone created by the Tax Cuts and Jobs Act:

Thanks to downtown Phoenix's apartment building boom, there are thousands of new places for people to live in the popular area. Unfortunately, many who work or go to college downtown can't afford the pricey rents.

But three new apartment projects could help ease the rent crunch for hundreds of people who want to live near their job or school in central Phoenix.

An Arizona group is teaming with a national investor to develop three more affordable apartment projects in central Phoenix with almost 500 units. Rents for many of the apartments will be below the area's average, which is more than $1,737 a month, according to Colliers International.

The new tax incentive for developing in lower-income areas designated as Opportunity Zones is spurring the development of the new apartments. -- September 12, 2019 The Arizona Republic article

Pivot Manufacturing (Phoenix, Arizona) - Purchasing new equipment:

Two high-speed machines arrived less than a month after the president signed the tax bill. The law lets Macias avoid paying federal tax on 20 percent of his company’s income. - May 16, 2018, KJZZ.org article excerpt

Davcon Aviation, LLC and Mesa Hangar, LLC (Mesa, Arizona) -- The companies are planning to add 20 hangars to Mesa's Falcon Field Airport that will include office space, located in an Opportunity Zone created by the Tax Cuts and Jobs Act:

Mesa's Falcon Field Airport, known for its rich history and as a major economic engine for the city, is adding at least 20 hangars to accommodate its growing clientele.

The municipal airport, which serves private and military aircraft, announced last week that it's preparing for a 23-acre development -- complete with ancillary offices and manufacturing spaces.

Davcon Aviation, LLC, and Mesa Hangar, LLC, will construct the phased project on more than 1 million square feet of vacant city land on the northwest side of the airport.

"We are really excited about it," said airport Director Corinne Nystrom. "One of our big missions has been to finish developing the airport with a strong presence of hangars and aviation businesses and this is exactly what we've been looking for. It's a big win for mesa."

The land will be leased for 40 years, and the initial design concept estimates that the hangars will range from 5,000 square feet to 60,000 square feet.

The number and size of the hangars will vary, depending on the preferences of the new tenants, and will offer high ceilings and wide doors.

The hangars will seek to accommodate corporate jets and specialized fixed-wing and helicopter uses, explained Lynn Spencer, airport economic development project manager.

"One of the things that is so exciting about getting the new hangars is that a lot of the inventory will allow us to have a new stock of facilities that can attract a different variety of businesses and size aircrafts," she said.

"This is going to allow for more potential businesses and jobs to come here," Spencer added.

The project is anticipated to cost more than $30 million, but because the airport is self-sustaining, it won't be dipping into any of the city's general fund.

The U.S. Treasury Department designated Falcon Field as an "opportunity zone," meaning it's an economically-distressed community where new investments could be eligible for preferential tax treatment.

Opportunity Zones are designed to spur economic development and job creation, according to the federal Internal Revenue Service website. -- May 20, 2019 East Valley Tribune article

Banyan Residential (Scottsdale, Arizona) -- The company is revitalizing a vacant lot with apartments, retail, and office space which will be located on a Opportunity Zone, created by the 2017 GOP tax cut:

Banyan Residential announced the start of construction on the long-anticipated Scottsdale Entrada development this morning. Located at the northeast corner of 64th Street and McDowell Road, Scottsdale Entrada will revitalize a long vacant 33-acre lot with a vibrant mixed-use campus, including 736 apartment units, 250,000 square feet of office space, 5,000 square feet of retail and ample public open space. The project is located in an Opportunity Zone, part of a revitalization program formed under the Tax Cuts and Jobs Act of 2017 and will be developed with program-compliant funding.

"Because of its central location and proximity to Phoenix, this project is critical to the economic prosperity and urban renaissance of the area and surrounding neighborhoods," said Mayor Lane. "As the name conveys, this is a major entry point to Scottsdale. We are very excited for construction to start." -- March 27, 2020 Vertical News article

Crooked Tooth Brewery (Tucson, Arizona) – Because of the Tax Cuts and Jobs Act, the brewery is planning to invest in new jobs and has been able to give back to the community:

The Vernons have been in the brewery business for about three years. Most of that time has fallen under the Craft Beverage Modernization Tax Reform Act passed in 2017. Because of this, they pay $3.50 a barrel in taxes, but at the start of 2020 that could double.

“We had about two months of business where we had $7 a barrel,” Vernon said. “That two months of business we didn’t do a lot of brewing, you know.”

This tax break was like a glass half full for small business.

Like the glass, there was plenty of room to grow. But if it expires, there's fear that optimism goes down the drain.

“Something that we may be investing in employment or we also give a lot to the community,” Vernon said.

These are things Vernon said he's been able to do because of this tax break, like working with local nonprofits on events. – Dec. 7, 2019, KLOD article.

Caliber (Phoenix, Arizona) -- The company is building a behavioral health clinic that will be located in an Opportunity Zone created by the Tax Cuts and Jobs Act:

Caliber-The Wealth Development Company has closed a deal as the property owner and developer of a 62,592-square-foot behavioral health clinic in downtown Phoenix. The 96-bed facility will be occupied by Dr. Cameron Gilbert and his company, Medical Behavioral Hospital of Phoenix LLC., and will care for patients struggling with medical and psychiatric conditions. Caliber purchased the facility, located near 14th Street and McDowell Road, for $10 million and will complete $9.5 million of renovations in the next year.

“This is a great example of how opportunity zones can truly make a positive impact on communities by enabling projects that are profitable, yet otherwise may not have attracted traditional funding,” said Chris Loeffler, CEO and co-founder of Caliber-The Wealth Development Company. “The clinic is expected to bring 80 high-income jobs into downtown Phoenix and, more importantly, serve a population in desperate need for advanced care.”

The clinic is the fourth investment to be included in the Caliber Tax Advantaged Opportunity Zone Fund, LP. and is one of the first healthcare opportunity zone properties across the country. Over the past year, Caliber has emerged as an industry-leading expert in opportunity zones and its Qualified Opportunity Zone Fund (QOF) has raised more than $40 million since its launch in Q4 2018. The fund is open to investment of short- and long-term capital gains, providing significant tax savings to investors, and is expected to reach its $500 million goal within two years. -- August 7, 2019 AZ Big Media article

Sutter Masonry, Inc. (El Mirage, Arizona) -- The company employs approximately 100 people. Hourly wages were increased by $1.00 and over $50,000 in bonuses were distributed.

Liberty Utilities (Phoenix, Arizona) – The utility will pass along tax savings to customers:

The Arizona Corporation Commission is following through on its promise to pass savings created by the Tax Cuts and Jobs Act to Arizona utility ratepayers. As of August, the effort has totaled $189,088,437.

The Commission has been working on rate adjustments every month since February. At the July Open Meeting, the Commission addressed federal tax adjustments for both Southwest Gas and Liberty Utilities with adjustments made to their revenue requirements of $20 million and $1.9 million respectively. – August 24, Prescott News Online

San Tan Brewing (Chandler, Arizona) – The Tax Cuts and Jobs Act allowed the brewery to put their spirits on the market:

Anthony Canecchia owns San Tan Brewing, a company that produces large quantities of beer and a small amount of distilled spirits.

Canecchia and his team had been experimenting with spirits for a while before they put them on the market. In 2017, considering the tax cut, it seemed like a natural time to start production, he says. San Tan Distilling started selling its spirits, such as Saint Anne's vodka and Sacred Stave whiskey and bourbon, in 2018. – Dec. 20, 2019, The Arizona Republic article.

Quail Creek (Phoenix, Arizona) – The utility will pass tax savings on to customers

At the August Open Meeting, the Commission addressed tax adjustments for both the Quail Creek and Bermuda Water Companies. The largest tax adjustment occurred earlier this year when the Commission approved a $119 million dollar reduction to benefit APS customers. - August 24, Prescott News Online

Rastegar Property Company, LLC (Phoenix, Arizona) -- The company is building an apartment complex in an Opportunity Zone created by the Tax Cuts and Jobs Act:

Rastegar Property, a vertically-integrated real estate investment firm focused on value-add and development in all asset classes across the United States, today announced its acquisition of a prominently-located high-rise lot in downtown Phoenix, AZ in anticipation of the city’s rapidly growing demand for residential and commercial real estate space.

Located at 334 N. 4th Ave., the 26,500+ square foot high-rise lot is near many employers, higher education campuses, retail spaces including shops, restaurants and bars, and entertainment venues. The lot’s zoning allows for 550 feet of vertical development, and Rastegar Property plans to use the lot to develop a multifamily high-rise residential complex with office and retail components.

“The Phoenix metropolitan area is experiencing some of the most tremendous job growth in the country, and with that comes significant demand for residential and commercial properties,” said Ari Rastegar, CEO of Rastegar Property. “In addition to its attractive size and location, the property also falls within a designated opportunity zone, a program through which the state of Arizona is encouraging investment and development in the Phoenix metropolitan area. This program, combined with the city’s rapidly growing population, and nation-leading rent and job growth, makes Phoenix an ideal market for Rastegar to make strategic acquisitions that bolster our national portfolio.” -- July 17, 2019 Rastegar Property press release

Bermuda Water Company (Phoenix, Arizona) – The utility will pass tax savings on to customers:

Helio Basin Brewery (Phoenix, Arizona) – The Tax Cuts and Jobs Act allowed the brewery to expand:

Local breweries have been paying a $3.50 tax per barrel, but once the bill expires, it will double, increasing to $7 per barrel. "Even though it doesn't sound like a lot of money, a $3.50 increase, it really does matter a lot to us, especially at our scale," said Dustin Hazer, the owner of Helio Basin Brewery. "Pretty much anything we try to do to increase our efficiency, it's a matter of change. It's not even once the sale happens; it's once we process it. So, we're getting immediately taxed on that volume. It's not when we sell it; it's when we process it."

Hazer opened his brewery a little more than three years ago, before the tax break was put in place. "The first year we had the full tax and then the last couple we've had the nice tax," he said. "Basically, when that tax break happened, we started to launch into some of the bigger stores, can products. We wouldn't have been able to do that even though it doesn't seem like a lot of money." – Dec. 5, 2019, AZFamily article.

JMA Ventures LLC (Phoenix, Arizona) -- The firm is building an apartment community located in an Opportunity Zone created by the Tax Cuts and Jobs Act:

San Francisco-based JMA Ventures LLC is on track to break ground next week for a $75 million apartment community in the warehouse district in downtown Phoenix.

The last time the developer bought land in downtown Phoenix — about four blocks away from its current location at Fourth and Buchanan streets — it was 20 years ago.

...

Newmark Knight Frank (Nasdaq: NMRK) arranged $51.9 million in construction financing for the 278-unit apartment community, with the rest coming from JMA Ventures and "opportunity zone" funding. -- August 19, 2019 Phoenix Business Journal article

The Beer Shop Co. (Tempe, Arizona) – Because of the Tax Cuts and Jobs Act, the owner was able to open his business and create jobs:

Dylan DeMiguel is a partner at the The Shop Beer Co. in Tempe.

Originally he thought he’d head to law school, but it turns out his entrepreneurial spirit drew him into the booze business.

It's booming, he says, thanks in part to a tax break that went into effect in 2018.

“We’re taking this money to fuel the growth of this company. We’re literally hiring people,” DeMiguel said. “We’re buying equipment. And we’re investing in our community.” – Dec. 8, 2019, KPNX 12 News article.

CAVU Aerospace (Mesa, Arizona) -- The aerospace company is opening an aircraft component repair facility in an Opportunity Zone created by the Tax Cuts and Jobs Act:

CAVU Aerospace Inc. is opening a $5 million aircraft component repair facility in Mesa, with plans to hire up to 75 employees.

The Stuttgart, Arkansas-based aerospace company, which focuses on end-of-service aircraft dismantling, engine repair and aerospace maintenance, was founded in 2010.

Component repair is a new business for the company, and Mesa will be the first of this facility for the company, said Ken Kocialski, CAVU Aerospace’s managing partner.

"We’re very excited to get this operation started," said Kocialski, who has lived in Chandler since the 1980s and will work out of the new facility. "This will bring our operation full circle."

...

A Los Angeles-based investment firm purchased the 20 acres of land in an opportunity zone for $2.25 million in February. -- August 1, 2019 Phoenix Business Journal article

U-Haul (Headquarters in Phoenix, with many locations statewide) – $1,200 bonus for full-time employees, $500 for part-time employees; over 28,000 workers will receive a bonus:

Officials with U-Haul say Friday its employees will receive a one-time bonus, as a result of the tax cut bill that was signed by President Donald Trump.

According to a statement, full-time team members will get a $1,200 bonus, while part-time employees will get $500. The bonuses, which will be issued by the end of February, will cost the company $23 million.

Officials say over 28,000 workers will benefit from the bonus, with more than 3,800 of those in Arizona. – Feb. 9 2018, Fox 10 Phoenix news article

YAM Worldwide (Scottsdale, Arizona) -- $2,000 bonuses for the 595 employees who have been with the company more than six months; $1,000 bonuses for the 131 employees who have been with the company less than six months. More than $1.3 million in bonuses were paid:

American entrepreneur and philanthropist Bob Parsons today announced that in celebration of the passage of the GOP tax plan, all 725 YAM Worldwide employees will receive additional bonuses. The 594 staffers who have been with the company for more than six months will receive $2,000, and the remaining 131 employees who have been on the YAM Worldwide team six months or less will receive $1,000 each. The more than $1.3 million in bonuses will be distributed today.

“The passage of the tax credit is a catalyst for explosive economic growth. On a massive scale, the lowered federal tax burden on businesses will increase investment, entrepreneurship and corporate philanthropy,” said Parsons. “I’ve always believed in sharing good news and have decided to celebrate the tax plan by mgiving back to my staff.” – Dec. 17 2017, YAM Worldwide press release

Data Sales Co., Inc. (Scottsdale, Arizona) – $1,000 bonuses for all 80 employees:

Data Sales Co., Inc. announced today that the Company will celebrate the recent passage of tax reform legislation by distributing to all 80 plus employees a special bonus of $1,000 each. Data Sales Co. will benefit from the new tax law lowering the corporate tax rate from 35 percent to 21 percent:

“Our hard-working employees make this company succeed, and we wanted them to share in the savings the company will see and also help grow our economy. Today I’m announcing that every employee will receive a cash bonus of $1,000 each,” said Paul Breckner, President of Data Sales Co. “I also want to thank our local Congressman, Jason Lewis, for his consistent advocacy of tax reform and seeing it through to becoming law. With the majority of our 80+ strong workforce here in Burnsville, I’m pleased that the benefits of tax reform will be felt at home.”

Background on tax reform bonuses and Data Sales Co.:
All employees, whether full-time or part-time, hourly, salaried, commission or non-commission will receive the bonus to show our appreciation and heartfelt thanks for their service. We believe this tax reform will be good for Data Sales, spur economic growth, continue to grow jobs and keep unemployment at an all-time low. – Jan. 22, 2018 Data Sales Co., Inc. press release

Virtua Partners (Phoenix, Arizona) - Launched an Opportunity Zone Fund, raising $200 million for the fund:

Virtua Partners (Virtua), a global private-equity real-estate investment firm, today announced the launch of the first-ever Opportunity Zone Fund. This groundbreaking fund is the first vehicle designed to invest in the newly created Opportunity Zones -- one of the lesser known provisions of the Tax Cuts and Jobs Act of 2017 (the Tax Reform Act). Virtua Opportunity Zone Fund I, LLC aims to raise $200 million and is designed to utilize the tax-savings opportunities created by the tax-reform law. - June 20, 2018 Virtua Partners press release

Pacific Oak Capital and Defer Gain (Phoenix, Arizona) -- The company announced an investment into affordable multi-family, commercial, and industrial income-producing properties within the Opportunity Zones, which will create jobs:

“Three apartment complexes are headed to an Opportunity Zone in downtown Phoenix, addressing the need for affordable housing. These projects are valued at $61 million.

EPCOR USA (Phoenix, Arizona) - The utility will pass along tax cut savings to customers:

More than 57,000 EPCOR wastewater customers will receive more than $1.1 million in federal corporate tax cut savings, reducing the amount of their monthly wastewater bill starting with the July 2018 billing cycle.

Today, the Arizona Corporation Commission (ACC) approved EPCOR’s request to refund $1,106,392 in tax reform savings to all of the company’s residential and commercial wastewater customers.

Residential customers will receive a monthly credit of $1.26 until new rates are determined in a future rate case. Because wastewater service is billed at a flat rate, all residential customers will receive the same monthly credit. Residential customers will also receive a one-time credit of $7.56 on their July 2018 bill, refunding corporate taxes collected through June 2018 at the previous tax rate before today’s ACC approval of EPCOR’s application.

“We are extremely pleased to help our wastewater customers save more than $1 million each year, and it’s important to us that we put this into effect as soon as possible,” commented Joe Gysel, President of EPCOR USA, Arizona’s largest regulated water utility. “All our customers deserve to share in the savings generated by federal tax reform. It's positive for them, for their communities and for our state.” - June 12, 2018 EPCOR press release

Western Alliance Bancorporation (Phoenix, Arizona) – Base pay raise of 7.5 percent for the lowest-paid 50% of employees; increased bonuses; increased 401(k) match; etc.

Western Alliance, which has $20 billion in assets, plans to increase the base pay of the lowest-paid 50% of employees by 7.5% once the bill becomes law, the bank’s chief executive Robert Sarver said in an interview Wednesday. Bonuses will also go up, bringing the total pay increase for this group of employees to around 10%. These employees generally make $75,000 or less.

Western Alliance, which operates units including Bank of Nevada and Torrey Pines Bank, also plans to increase its 401(k) match from 50% of an employee’s contribution up to 6% of pay to 75% of an employee’s contribution up to that same level. The bank, which has about 1,700 total employees, also plans to improve maternity leave benefits, though Mr. Sarver declined to detail those changes. – Dec. 20, 2017 Wall Street Journal article excerpt

Arizona Public Service (Phoenix, Arizona) -- The utility requested a $119 million bill reduction for customers due to tax reform:

"APS has requested the Arizona Corporation Commission approve a $119 million bill reduction for customers, based on federal corporate tax cuts, effective February 1, 2018.

If approved, the $119 million decrease will offset the $95 million revenue increase that resulted from APS’s last rate review. The savings of $0.004258/kWh will be passed directly to customers through the Tax Expense Adjustor Mechanism (TEAM), a new adjustor mechanism that was included in the company’s rate review, and customer savings will vary with actual energy usage. APS customers would receive the credit on their monthly bill. – Jan. 9, 2018 Arizona Public Service press release

Tucson Electric Power Company (Tucson, Arizona) – The utility will pass tax reform savings to customers:

EP and its sister utilities “believe it is in the public interest to share a substantial portion of the expected income tax savings with their respective customers on an expedited basis,” the companies said.

TEP says its proposals may include a fast-tracked regulatory approval process to implement a billing credit as soon as possible; a higher seasonal credit that would help offset customer bills during higher usage months; or bill credits that would decline over time while still smoothing the bill impacts of future rate requests. – Feb. 2, 2018 Tucson.com article excerpt

AT&T - $1,000 bonuses to 1,510 Arizona employees; Nationwide, $1 billion increase in capital expenditures:

Today, Congress approved legislation representing the first comprehensive tax reform in a generation. The President is expected to sign the bill in the coming days.

Once tax reform is signed into law, AT&T* plans to invest an additional $1 billion in the United States in 2018 and pay a special $1,000 bonus to more than 200,000 AT&T U.S. employees — all union-represented, non-management and front-line managers. If the President signs the bill before Christmas, employees will receive the bonus over the holidays.

“Congress, working closely with the President, took a monumental step to bring taxes paid by U.S. businesses in line with the rest of the industrialized world,” said Randall Stephenson, AT&T chairman and CEO. “This tax reform will drive economic growth and create good-paying jobs. In fact, we will increase our U.S. investment and pay a special bonus to our U.S. employees.”

Since 2012, AT&T has invested more in the United States than any other public company. Every $1 billion in capital invested in the telecom industry creates about 7,000 jobs for American workers, research shows. -- Dec. 20, 2017 AT&T Inc. press release

Apple (Apple store locations in Chandler, Gilbert, Glendale, Phoenix, Scottsdale, Tucson ) -- Arizona-based Apple employees received $2,500 bonuses in the form of restricted stock units. Nationally, $30 billion in additional capital expenditures; 20,000 new employees will be hired; increased support of coding education and science, technology, engineering, arts, and math; increased support for U.S. manufacturing.

Wal-Mart – Arizona employees at 113 Walmart stores received tax reform bonuses, wage increases, and expanded maternity and parental leave. Walmart employees who adopt children will be given $5,000 to help cover expenses.

Lowe's -- 4,000 employees at 32 stores in Arizona. Employees will receive bonuses of up to $1,000 based on length of service; expanded benefits and maternity/parental leave; $5,000 of adoption assistance.

Home Depot -- 57 locations in Arizona, bonuses for all hourly employees, up to $1,000:

"This incremental investment in our associates was made possible by the new tax reform bill." -- Jan. 25, 2018 Home Depot press release

Ryder (Six locations in Arizona) -- Tax reform bonuses for employees.

Waste Management Inc. (Multiple locations in Arizona) -- $2,000 bonuses:

In light of the meaningful contributions of its employees and the new U.S. corporate tax structure, the company will distribute US $2,000 in 2018 to every North American employee not on a bonus or sales incentive plan; that includes hourly and other employees.

“We are about to get a tax benefit as our U.S. corporate tax rate goes from 35 percent to 21 percent. In considering how to best spend that, we wanted to find a way to help grow our economy, which in turn, will help grow our business, and give some of the tax savings back to those hardworking employees who do not get the opportunity to participate in our salaried incentive plans,” said Jim Fish, president and chief executive officer, Waste Management.

“So, we are offering each North American hourly full-time employee and salaried employee who does not participate in any sales incentive or bonus plan during 2018, a cash bonus of US $2,000 to show our appreciation to so many of our valued employees while growing our business and returning a good portion of the tax savings directly to the overall economy,” he continued. – Jan. 10 2018, Waste Management Inc. press release excerpt

T.J. Maxx – 17 stores in Arizona – Tax reform bonuses, retirement plan contributions, parental leave, enhanced vacation benefits, and increased charitable donations:

The 2017 Tax Act benefited the Company in the fourth quarter and full year Fiscal 2018. The Company expects to continue to benefit from the 2017 Tax Act going forward, primarily due to the lower U.S. corporate income tax rate. As a result of the estimated cash benefit related to the 2017 Tax Act, the Company is taking the following actions:

Associates

A one-time, discretionary bonus to eligible, non-bonus-plan Associates, globally
An incremental contribution to the Company’s defined contribution retirement plans for eligible Associates in the U.S. and internationally
Instituting paid parental leave for eligible Associates in the U.S.
Enhancing vacation benefits for certain U.S. Associates

Communities

Made meaningful contributions to TJX’s charitable foundations around the world to further support TJX’s charitable giving. – Feb. 28 2018, The TJX Companies Inc. press release excerpt

FedEx (Multiple locations in Arizona) – More than $3.2 billion in wage increases, bonuses, pension funding due to the recent tax cuts. Pay raises, bonus increases, pension plan increases, and at least $1.5 billion in capital expenditures:

“FedEx Corporation is announcing three major programs today following the recently enacted U.S. Tax Cuts and Jobs Act:

Over $200 million in increased compensation, about two-thirds of which will go to hourly team members by advancing 2018 annual pay increases by six months to April 1st from the normal October date. The remainder will fund increases in performance- based incentive plans for salaried personnel.
A voluntary contribution of $1.5 billion to the FedEx pension plan to ensure it remains one of the best funded retirement programs in the country.
Investing $1.5 billion to significantly expand the FedEx Express Indianapolis hub over the next seven years. The Memphis SuperHub will also be modernized and enlarged in a major program the details of which will be announced later this spring.

FedEx believes the Tax Cuts and Jobs Act will likely increase GDP and investment in the United States.

The company has made no change to its fiscal 2018 earnings or capital expenditure guidance as issued on December 19, 2017 as a result of these actions.” – Jan. 26 2018, FedEx press release

Cintas (Multiple locations in Arizona) -- $1,000 bonuses for employees of at least a year, $500 for employees of less than a year.

Comcast (Multiple locations in Arizona) -- $1,000 bonuses; nationally, at least $50 billion investment in infrastructure in next five years.

Chipotle Mexican Grill (Multiple locations in Arizona) – Bonuses ranging from $250 to $1,000; increased employee benefits; nationally, $50 million investment in existing restaurants.

Starbucks Coffee Company (Multiple locations in Arizona) – $500 stock grants for all retail employees, $2,000 stock grants for store managers, and varying plan and support center employee stock grants. Nationally, 8,000 new retail jobs; an additional wage increase this year, totaling approximately $120 million in wage increases, increased sick time benefits and parental leave.

McDonald’s (280+ locations in Arizona) – Increased tuition investments which will provide educational program access for 400,000 U.S. employees. $2,500 per year (up from $700) for crew working 15 hours a week, $3,000 (up from $1,050) for managers, and more:

McDonald’s Corporation today announced it will allocate $150 million over five years to its global Archways to Opportunity education program. This investment will provide almost 400,000 U.S. restaurant employees with accessibility to the program as the company will also lower eligibility requirements from nine months to 90 days of employment and drop weekly shift minimums from 20 hours to 15 hours. Additionally, McDonald’s will also extend some education benefits to restaurant employees’ family members. These enhancements underscore McDonald’s and its independent franchisees’ commitment to providing jobs that fit around the lives of restaurant employees so they may pursue their education and career ambitions.

The Archways to Opportunity program provides eligible U.S. employees an opportunity to earn a high school diploma, receive upfront college tuition assistance, access free education advising services and learn English as a second language.

“Our commitment to education reinforces our ongoing support of the people who play a crucial role in our journey to build a better McDonald’s,” said Steve Easterbrook, McDonald’s President and CEO. “By offering restaurant employees more opportunities to further their education and pursue their career aspirations, we are helping them find their full potential, whether that’s at McDonald’s or elsewhere.”

Accelerated by changes in the U.S. tax law, McDonald’s increased investment in the Archways to Opportunity Program includes:

Increased Tuition Investment:
- Crew: Eligible crew will have access to $2,500/year, up from $700/year.
- Managers: Eligible Managers will have access to $3,000/year, up from $1,050.
- Participants have a choice for how they apply this funding – whether it be to a community college, four year university or trade school. There is no lifetime cap on tuition assistance – restaurant employees will be able to pursue their education and career passions at their own pace. The new tuition assistance is effective May 1, 2018 and retroactive to January 1, 2018.
Lowered Eligibility Requirements: Increase access to the program by lowering eligibility requirements from nine months to 90 days of employment. In addition, dropping from 20 hours minimum to 15 hours minimum (roughly two full time shifts) per week to enable restaurant employees more time to focus on studies.
Extended Services to Families: Extension of Career Online High School and College Advisory services to restaurant employees’ family members through existing educational partners Cengage and Council for Adult and Experiential Learning (CAEL).
Additional Resources: Career exploration resources for eligible restaurant employees to be available later this year.
Creation of an International Education Fund: Grants to provide local initiatives and incentives in global markets to further education advancement programs.

“Since its inception, Archways to Opportunity was meant to match the ambition and drive of restaurant crew with the means and network to help them find success on their own terms,” said David Fairhurst, McDonald’s Chief People Officer. “By tripling tuition assistance, adding education benefits for family members and lowering eligibility requirements to the equivalent of a summer job, we are sending a signal that if you come work at your local McDonald’s, we’ll invest in your future.”

After launching in the U.S. in 2015, Archways to Opportunity has increased access to education for over 24,000 people and awarded over $21 million in high school and college tuition assistance. Graduates have received college degrees in Business Administration, Human Resources, Communications, Accounting, Microbiology and more. – March 29, 2018 McDonald’s Corporation press release excerpt

Wells Fargo – 181 bank locations in Arizona; raised base wage from $13.50 to $15.00 per hour; nationally, $400 million in charitable donations for 2018; $100 million increased capital investment over the next three years.

Note: If you know of other Arizona examples, please email John Kartch at jkartch@atr.org

The running nationwide list of companies can be found at www.atr.org/list

Supercut: Team Biden Vows to Impose Carbon Tax

Posted by John Kartch on Tuesday, December 1st, 2020, 9:00 PM PERMALINK Follow @JohnKartch

Joe Biden and Kamala Harris have endorsed a carbon tax on the American people.

And as shown in the video below, they are surrounding themselves with others pushing a carbon tax, including climate czar John Kerry, OMB pick Neera Tanden, and Treasury Secretary Janet Yellen:

A carbon tax would impose burdens on households due to higher costs of cooling and heating, transportation, and groceries.

Even Hillary Clinton in 2016 decided to oppose a carbon tax after she learned the following from an internal Clinton report prepared by policy staff:

The Hillary memo states that a carbon tax would devastate low-income households: “As with the increase in energy costs, the increase in the cost of nonenergy goods and services would disproportionately impact low-income households.”

The Hillary memo states that a carbon tax would cause gas prices to increase 40 cents a gallon and residential electricity prices to increase 12% - 21%: “In our analysis, for example, a $42/ton GHG fee increases gasoline prices by roughly 40 cents per gallon on average between 2020 and 2030 and residential electricity prices by 2.6 cents per kWh, 12% and 21% above levels projected in the EIA’s 2014 Annual Energy Outlook respectively.

The Hillary memo states a carbon tax would cause household energy bills to go up significantly: “Average household energy costs would increase by roughly $480 per year, or 10% relative to the levels projected in EIA’s 2014 Outlook.”

The Hillary memo states that a carbon tax would increase the cost of household goods and services: “The cost of other household goods and services would increase as well as companies pass forward the higher energy costs paid to produce those goods and services on to consumers.”

(Source: MEMORANDUM FOR HILLARY RODHAM CLINTON -- Jan. 20, 2015)

Carbon taxes are highly unpopular with voters. In fact, carbon tax advocates can’t even get a carbon tax passed in a single blue state, as this timeline shows.

Carbon taxes also saddle state and local governments with huge costs. For example, a school district in Canada was forced to kick 400 kids off the school bus program in order to pay a $3.3 million carbon tax bill.

It's no wonder conservative groups wrote a letter to Congress Stating: "We oppose any carbon tax." The official Republican Party platform also rejects "any carbon tax."

Biden's carbon tax will also shatter his pledge to each and every American making less than $400,000 that he will not raise a single penny of any tax.

Posted by Alex Hendrie on Tuesday, December 1st, 2020, 2:33 PM PERMALINK

If lawmakers fail to act by the end of the year, breweries, distilleries, and wineries across America will face a tax increase.

The Craft Beverage Modernization and Tax Reform Act (CBMTRA) was first enacted through the Tax Cuts and Jobs Act of 2017. This bill provided federal excise tax relief for breweries, wineries, and distilleries, allowing these businesses to hire more employees, purchase new equipment, and expand production.

Unfortunately, this tax relief was temporary and is set to expire at the end of the year. Congress can make these tax cuts permanent by passing S. 362/H.R. 1175, legislation introduced by Reps. Ron Kind (D-Wis.) and Mike Kelly (R-Pa.) and Senators Ron Wyden (D-Ore.) and Roy Blunt (R-Mo).

This legislation is overwhelmingly bipartisan and has been co-sponsored by 350 members of the House of Representatives and 76 Senators. Congress should pass this legislation, either as a stand-alone proposal or as part of a broader legislative package.

ATR has kept a running list of dozens of distilleries, breweries, and wineries that have been able to expand production, hire new workers, and invest in the economy thanks to the CBMTRA. Making these tax cuts permanent will help businesses continue supporting the economy and workers.

Examples of businesses that have already seen benefits from the CBMTRA include:

Alexander Valley Vineyards

(Healdsburg, California) – The vineyard was able to create new jobs, buy new equipment, and remodel their tasting rooms because of the Tax Cuts and Jobs Act:

“The craft beverage bill has been an incredible boost for our industry and this extension allows us to continue investing in our wineries by buying new equipment, remodeling tasting rooms, hiring new employees and more,” said Hank Wetzel, founder and family partner of Alexander Valley Vineyards and Chairman of Wine Institute. “All of this benefits local communities in the form of jobs, tax revenue and support for the hospitality industry.” – Dec. 20, 2019, Southeast Farm Press article.

Portland Cider Company

(Clackamas, Oregon) – Because of the Tax Cuts and Jobs Act, the owner was able to create new jobs and invest in new equipment:

Jeff Parish, Co-Founder of Portland Cider Company and Committee Member of the United States Association of Cider Makers: “As a cider maker, the temporary CBMTRA allowed me to purchase new equipment, hire new staff and grow my business. If the excise tax credits go away, I have to reverse those choices. We're hopeful the permanent version of the bill passes, so we can plan with certainty for a growth-future." – Feb. 6, 2019, U.S. Senate Finance Committee press release.

Central Standard Distillery

(Milwaukee, Wisconsin) – The Tax Cuts and Jobs Act allowed the distillery to hire four new employees, invest in a new facility, and ordered a new bottling line:

"Central Standard Distillery co-owner Evan Hughes said his business was able to grow faster than it normally would because of the act. He attributes four key growth areas to the success of the act, including: Central Standard hired four new employees, bringing staff totals to 22 people. The company invested in a 15,000-square-foot facility on Clybourn Street. In addition, Central Standard ordered a new bottling line for improved efficiency and offered health care to all of its employees.

"It gave us the courage to expand our business quicker than we normally would," Hughes said. – Dec. 10, 2019, Milwaukee Business Journal.

Bar Cento

(Cleveland, Ohio) – The tax cuts allowed the bar to add new jobs and invest more in their facility:

Sam McNulty, co-founder of multiple Cleveland brewery/restaurants including Market Garden Brewery and Bar Cento, credited the tax break with helping his operations expand at an accelerated rate, "which in our case meant several million dollars of investment in our facility as well as the creation of a large number of full-time positions."

Not having certainty for the tax cut beyond next year could stymie other, more long-term investments.

"As in life, so it goes in business, where if the future is uncertain, you are more likely to be less secure and optimistic and thus more conservative and frugal," McNulty said. "There's not a bank on the planet that will finance a business that has only a one-year lease. And so a one-year extension is appreciated, but it is not enough to really fuel this growing industry and reach the full promise of the economic benefits of local craft beer." – Dec. 17, 2018, Crains Cleveland article.

Photo Credit: Darren Maloney

Posted by Katie McAuliffe on Tuesday, December 1st, 2020, 9:44 AM PERMALINK Follow @https://twitter.com/digitalliberty?lang=en

Today, Americans for Tax Reform sent a letter to Majority Leader Mitch McConnell urging him to confirm Nathan Simington as Federal Communications Commissioner before the end of this year.

The continue reading for the full letter text or click here.

December 1, 2020

The Honorable Mitch McConnell

Senate Majority Leader

S-230, The Capitol

Washington DC, 20510

Re: Support of Nomination of Nathan Simington to the Federal Communications Commission

Dear Majority Leader McConnell:

I write in support of Nathan Simington’s nomination to the Federal Communications Commission.

In the past four years, the FCC, under Chairman Ajit Pai’s leadership, has made major accomplishments in promoting resilient networks that spurred broadband deployment and investment. This foresight and swift action during the pandemic, kept Americans connected through the volatile and uncertain times faced by families as COVID-19 emerged globally.

Right now, Joe Biden is poised to inherit a Democrat-led FCC on day one. Under long-standing tradition, the current Republican FCC Chairman Ajit Pai will step down in January. Likewise, current Republican FCC Commissioner Mike O’Rielly will leave the agency when Congress adjourns in a few weeks because his term has expired. This means that the normally five-member FCC would be controlled by Democrats, 2-1, starting on January 20. That would give the agency the opportunity to jam through a partisan Biden agenda. While floor time is limited during the Senate’s lame-duck session, confirming Simington this year would ensure a 2-2 FCC that could forestall billions in economic damage.

The Commission’s role in Restoring Internet Freedom to stop so-called net neutrality prevented regulations that would have treated broadband providers like utilities under Title II of the Communications Act. This created an environment for $80 billion of dollars in investment from 2018 through 2019. It also prevented giving states and localities the ability to institute their own taxes and fees on broadband networks.

Republicans should not underestimate the harm that a Democrat-led FCC could impose on the American economy during Biden’s first 100 days.

A Biden Administration will likely lean on the FCC to help push through an agenda focused on taxpayer funded broadband, as it did during the Obama years. Many states have opposed taxpayer funded municipal broadband networks, while other states have pursued this path. The courts prevent the Obama era FCC from inserting itself into states who opposed municipal broadband networks. Meanwhile, we have watched networks consistently fail in states that chose to pursue taxpayer funded networks.

A Democrat-controlled FCC is expected to significantly increase its spending of Americans’ hard-earned dollars. They can do so immediately through the FCC’s Universal Service Fund without any input or check from the Senate simply by adding charges to American’s telephone bills. Democrats have also called for massive increases in in the FCC’s Lifeline and E-Rate programs. Internet connectivity has become even more vital as many of us continue to work, educate, visit doctors, and entertain from home. However, this does not necessarily mean increases in spending are necessary. The FCC has done much to redirect funding and audit subsidies.

5G connectivity has been a rallying cry across the isles, and while spectrum auctions are sure to continue, another democrat priority may involve rolling back FCC rules that limit how much cities can charge telecom companies for 5G cell sites. Bringing cities in line with market rates has encouraged and expedited the spread of important 5G infrastructure.

By confirming Simington now as Commissioner to the FCC, the Senate can forestall the impending economic harms and damage to deregulatory policies from the last four years. While the Senate calendar is tight, spending the necessary floor time to get Simington confirmed to the FCC is the most economically beneficial use of Congress’s time.

Americans for Tax Reform urges you to confirm Nathan Simington to the FCC before the end of this year. Simington’s confirmation now would ensure a 2-2 FCC at the outset of a Biden Presidency. The FCC could continue to pursue important initiatives on a bi-partisan basis, but it would be blocked from jamming through partisan initiatives—whether those involve profligate spending or an anti-growth agenda. 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

Photo Credit: David Berkowitz

Posted by Tom Hebert on Tuesday, December 1st, 2020, 7:45 AM PERMALINK Follow @tomhebertdc

If Raphael Warnock and Jon Ossoff are elected to the Senate by winning the January 5, 2021 runoff elections, they will rubber stamp the Biden-Harris agenda of higher taxes on the American people.

Joe Biden has promised $4 trillion in new or higher taxes on the American people and has pledged to repeal the Trump- Republican Tax Cuts and Jobs Act “on day one.” This would raise taxes on middle class Americans all across the country – a family of four with the median annual income of $73,000 will see a tax hike of more than $2,058.

This means that if Warnock and Ossoff win on January 5th, their first order of business will be to raise taxes on all Georgians by repealing the Tax Cuts and Jobs Act.

Using IRS data from 2017 and 2018, ATR calculated the average decrease in tax liability for various income thresholds thanks to the Tax Cuts and Jobs Act. Families with AGI of between $50,000 and $100,000 saw a tax cut of roughly double that families with AGI of over $1 million received. The breakdown for Georgia is below:

Taxpayers with AGI of between $25,000 and $49,999 saw their average tax liability drop from $2,553.19 in 2017 to $2,312.76 in 2018, a 9.4 percent reduction in federal tax liability.
Taxpayers with AGI of between $50,000 and $74,999 saw their average tax liability drop from $5,459.71 in 2017 to $4,829.49 in 2018, a 11.5 percent reduction in federal tax liability.
Taxpayers with AGI of between $75,000 and $99,999 saw their average tax liability drop from $8,803.29 in 2017 to $7,675.99 in 2018, a 12.8 percent reduction in federal tax liability.
Taxpayers with AGI of between $100,000 and $200,000 saw their average tax liability drop from $17,824.57 in 2017 to $15,881.30 in 2018, a 10.9 percent reduction in federal tax liability.
Taxpayers with AGI of over $1 million saw their average tax liability drop from $786,363.64 in 2017 to $737,697.06 in 2018, a 6.2 percent reduction in federal tax liability.

Incumbent Republican Senators David Perdue and Kelly Loeffler have been consistent advocates of lower taxes and limited government. Sen. Perdue voted for the TCJA, which reduced taxes for Georgians across the board. While Sen. Loeffler was not in Congress at that time, she has consistently voiced support for lower taxes and has signed the Taxpayer Protection Pledge signer, a written commitment to her constituents to oppose any and all income tax increases.

The distinction is clear – Perdue and Loeffler will fight for low taxes and a strong economy while Ossoff and Warnock will vote for the Biden agenda of higher taxes on all Georgians and Americans across the country.

Photo Credit: John Ramspott

Posted by Alex Hendrie on Tuesday, December 1st, 2020, 7:30 AM PERMALINK

Neera Tanden, President-elect Joe Biden’s pick to lead the Office of Management and Budget (OMB), wants to impose a steep national soda tax.

Tanden endorsed the “Medicare for America Act,” legislation introduced by House Democrats that imposed a one cent tax per 4.2 grams of caloric sweetener in sugary drinks.

The Center for American Progress, which is currently led by Tanden, also called for a tax on sugary drinks as part of their “Medicare Extra for All” plan. This plan would impose several “public health excise taxes” including a tax of 1 cent per ounce to finance new spending on liberal priorities.

If one of these sugary drink taxes were imposed, it could result in a 55 to 67 cent tax on a 2-liter bottle of Coca-Cola. A single 2 liter bottle of Coca-Cola costs anywhere from $1.25 to $1.70, so this tax could total 50 percent of the cost of the product. With the Tanden soda tax burden, the cost of a 12-pack of soda could increase by $1.11 to $1.44.

A tax on sugary drinks would also be extremely regressive and disproportionately harm low-income Americans. In fact, according to a 2018 report from the Tax Foundation, 47 percent of the tax collections from a sugary drink excise tax would come from households with income under $50,000.

Even Bernie Sanders came out against a soda tax.

During his 2016 presidential bid Bernie Sanders slammed Hillary Clinton’s endorsement of a soda tax. Sanders said:

“The mechanism here is fairly regressive. And that is, it will be increasing taxes on low income and working people.”

Sanders went on to note that Clinton’s embrace of a soda tax violated her pledge to the American people not to support any tax increase on Americans making less than $250,000 per year.

"Frankly, I am very surprised that Secretary Clinton would support this regressive tax after pledging not to raise taxes on anyone making less than $250,000. This proposal clearly violates her pledge," Sanders said.

Needless to stay, this tax would violate Biden’s pledge to not raise a single penny of any tax on any American making less than $400,000 per year.

The OMB Director is responsible for implementing the President’s policy priorities across the executive branch. If confirmed, Tanden would play a key role in shaping and implementing policy proposals under a President Biden.

Biden has already called for $4 trillion in new or higher taxes on American families and businesses. With Tanden as OMB chief, a sugary drink tax could be next.

Photo Credit: Center for American Progress

Posted by Sheridan Nolen on Wednesday, November 25th, 2020, 4:17 PM PERMALINK Follow @snolen_ok

Ohio’s current local income tax structure allows municipalities to tax employees even if they do not physically work in the city that is taxing them.

This is a common rationale: employees can be taxed based upon where they work because they are using city resources like police, fire, and other public services while they are at work.

However, what happens when people stop actually working at that location? Ohio Governor Mike DeWine’s statewide COVID-19 Stay-at-Home order earlier this year has forced many employees to work from home. This means Ohioans are paying taxes to cities whose services they no longer use.

At the beginning of the pandemic in March, lawmakers passed HB 197 which deemed all work performed at private homes during the public health emergency to have been performed at the employees’ principal place of work for the purposes of taxation. In other words, cities were permitted to collect income tax dollars as though businesses were operating under normal circumstances.

This was originally passed under the assumption that it would be a temporary law, only to stay in place until 30 days after Gov. Mike DeWine ended his state of emergency declaration. As the pandemic has carried on far longer than initially anticipated, the temporary nature of the law has been strained.

In July, The Buckeye Institute and three of its employees filed a lawsuit against the City of Columbus and the State of Ohio. The lawsuit asserts it is unconstitutional to allow cities to tax income of workers who do not live there, and were not permitted to work there during the Stay-at-Home order.

In order to comply with Ohio’s emergency orders, which required nonessential businesses to close, The Buckeye Institute required its employees to work from home. According to The Buckeye Institute, this is unlawful taxation and “a clear violation of due process rights under the Fifth and Fourteenth Amendments to the U.S. Constitution and violates Article I, Section 1 of the Ohio Constitution.”

Robert Alt, President of The Buckeye Institute, cited the Hillenmeyer v. Cleveland Board of Review Supreme Court decision from 2015. In Hillenmeyer, the Court unanimously decided that local taxation of a non-resident's services must be based on the location of that person when the work was performed.

While the Ohio Supreme Court deliberates on the case, state legislators have said they plan to work on passing a new law before the end of the year. Two companion bills, inspired by The Buckeye Institute’s lawsuit, have been introduced in the Ohio Legislature.

Rep. Kris Jordan, R-Delaware, has sponsored HB 754 and Sen. Kristina Roegner, R-Hudson, has introduced its companion, SB 352. Both pieces of legislation would amend income tax withholding rules for work-from-home employees related to the COVID-19 pandemic. Employees in Ohio would be taxed where they live rather than where they work.

Sen. Roegner said, “I don’t believe it’s constitutional to be able to tax someone that doesn’t step foot in your city.”

However, while various lawmakers like Roegner have expressed their beliefs that the law is unfair, cities across Ohio say repealing the temporary law would hurt city budgets. Organizations, such as the Ohio Municipal League, have also come out against such legislation.

Ohio Municipal League Executive Director, Kent Scarrett, said that “any shift from how income taxes are collected with the coronavirus emergency measure needs extensive debate.” Membership to the Ohio Municipal League is given to any city or village in Ohio that pays annual dues. In other words, many people who are directly part of City Government are key members of the Ohio Municipal League.

If a new law is not passed before the end of the 133rd General Assembly, Sen. Roegner has promised to bring a new bill back to the Statehouse in January 2021.

The lawsuit and pending legislation of HB 754 and SB 352 could benefit taxpayers during the pandemic by simplifying how they pay taxes.

Photo Credit: Nicholas Eckhart

Posted by Tom Hebert on Tuesday, November 24th, 2020, 2:55 PM PERMALINK Follow @tomhebertdc

Democrats are fighting to expand several unemployment programs into 2021, including reviving the Pelosi $600-per-week increase in unemployment payments that subsidized welfare over work.

This could endanger the economic recovery, as past expansions of unemployment programs have resulted in more Americans out of work and decreased labor demand, according to a 2019 study from the New York Federal Reserve.

On the heels of the Great Recession, Congress extended unemployment benefits for 13 weeks on top of the normal 26 week duration in June 2008. After President Obama took office, Congress passed a number of additional expansions to unemployment, eventually topping out at 99 weeks of benefits.

Analysts from the New York Federal Reserve estimated that the unemployment rate would have been 2.2 percentage points lower in 2011 and 3 percentage points lower in 2010 if Obama’s benefit expansion did not exist. This means that the disincentive to work the benefit expansion created kept approximately 4 million Americans out of a job during the slowest economic recovery in modern history.

The report also found that extended durations of unemployment payments have a negative impact on labor demand, as “...firms would expect to bargain with workers entitled to high benefits at all future dates.”

Democrats are pushing to revive the CARES Act’s temporary $600-per-week federal pandemic unemployment compensation (FPUC) benefit. Before the FPUC expired in July, it created a situation in which 68 percent of Americans got paid more on unemployment than in the workplace.

The subsidy of welfare over work will have lasting impacts on the economy that will only worsen if brought back. A recent study conducted by the Heritage Foundation found that the FPUC will reduce GDP by between $955 billion and $1.49 trillion.

The economy is recovering strongly from the pandemic, and several promising COVID-19 vaccine candidates are on the horizon. Since the April pandemic-low, 12.1 million jobs have been recovered as businesses continue to reopen and Americans continue getting back to work. Since October, over half of the jobs lost to the Coronavirus pandemic have now been recovered, and unemployment has fallen from a record high 14.7 percent to 6.9 percent.

While workers who have been displaced by the pandemic through no fault of their own deserve a safety net, history tells us that extending these programs will do more harm than good. As our economy continues to rebound, lawmakers must keep these facts in mind and reject policies that would prolong high unemployment rates and discourage Americans from safely re-entering the workforce.

Photo Credit: Gage Skidmore

Posted by Matt Owens on Tuesday, November 24th, 2020, 11:38 AM PERMALINK

As in other states, tax collections in Texas have taken a hit due to Covid-19 and subsequent shutdowns. Texas lawmakers will be faced with the challenge of reprioritizing state spending when they convene their biennial session in January. To assist Lone Star State lawmakers in this effort, the Texas Public Policy Foundation (TPPF) has published a conservative budget plan that would limit spending growth to the rate of population plus inflation, setting a max threshold for appropriations in the next budget at $246.8 billion.

TPPF is also urging Texas lawmakers to provide property tax relief in the coming year, a goal the Americans for Tax Reform supports. Texas is one of nine no-income-tax states, yet high property tax burdens are a problem. 2021 is a great time for Texas legislators to fix that. TPPF economist Vance Ginn highlighted the excessive property tax burdens facing Texans in testimony presented to the Texas House Ways & Means Committee in September:

“Texas looks to have at least the 7th highest local property tax burden in the nation,” Ginn told lawmakers. “This is according to an effective property tax rate of 1.81% per WalletHub.com or the share of property taxes paid to owner-occupied housing value of 1.69% per the Tax Foundation. While some claim this high burden is because Texas does not have a personal income tax, the two sources above show other states with no income tax tend to have a more competitive property tax burden. Texas’s high burden is from excessive spending.”

Even though Texas has a relatively competitive state tax code (minus the state’s margins tax), local municipalities throughout Texas notoriously squeeze residents through high property taxes. The coming legislative session presents an opportunity for Governor Greg Abbott and Texas legislators to consider restructuring that relationship in order to ease property tax burdens.

TPPF’s Ginn proposes swapping the state’s patchwork of local property taxes for a uniform sales tax to fund schools.

“For the sales tax swap, we recommend replacing school M&O property taxes with final sales taxes by mostly broadening the sales tax base,” said Ginn. “In 2017, the last year for which data is available from the Texas Comptroller’s website, Texas provided an estimated $42 billion in exemptions, exclusions, and discounts to the final sales tax base, requiring a higher tax rate and higher burden on those taxed.”

The new year will be full of challenges for state lawmakers in Texas and elsewhere. But the new legislative session also presents many opportunities. In addition to balancing the budget without raising taxes in 2021, tax reform that reduces onerous property tax burdens should be a high priority for Texas legislators, as should phasing out the state margins tax.

Photo Credit: Michael Barera

Posted by Mike Palicz on Monday, November 23rd, 2020, 5:38 PM PERMALINK Follow @Mike_Palicz

The Wall Street Journal reported today that Joe Biden plans to nominate former Federal Reserve Chairwoman Janet Yellen to become the next Treasury Secretary.

Yellen is a founding member of the Climate Leadership Council (CLC), an “international policy institute” lobbying Congress to pass a carbon tax “starting at $40 a ton (2017$) and increasing every year at 5% above inflation.” Yellen is also the author of a recent study commissioned by CLC, Exceeding Paris, that recommends a $43/ton carbon tax.

According to an internal report conducted by Hillary Clinton’s 2016 Presidential Campaign, a near-identical model of CLC's carbon tax plan “would generate $219 billion a year, on average, between 2020 and 2030.” The same internal report also concluded a $42/ton carbon tax “increases gasoline prices by roughly 40 cents per gallon” and found “average household energy costs would increase by roughly $480 per year.”

Yellen: “Capitalism is beginning to run amok”

“There really is a new kind of recognition that you’ve got a society where capitalism is beginning to run amok and needs to be readjusted in order to make sure that what we’re doing is sustainable and the benefits of growth are widely shared in ways they haven’t been,” Yellen told Reuters in an October interview promoting CLC’s carbon tax plan.

Support for Carbon Adjustment Fee and Carbon Customs Unions

In the same Reuters report, Yellen expanded upon Biden’s support for a “carbon adjustment fee” on imports from countries that fail to cut emissions under the 2015 Paris climate agreement. “Our thinking is that countries with carbon pricing would form essentially clubs, or carbon customs unions, within which there would be frictionless trade,” Yellen said.

Further Support for Carbon Taxes

In an October 19 interview on Bloomberg television, Biden's Treasury pick Janet Yellen said:

"What I would recommend for the United States -- that hopefully we will in the years ahead, go in this direction -- is simply to put in place a carbon tax."

WATCH:

Biden's Own Support for a Carbon Tax

Biden endorsed a carbon tax during on CNN town hall on September 24, 2019:

CNN's Anderson Cooper asked Biden: "Would you support a carbon tax?"

Biden replied: "Yeah, no, I would."

Photo Credit: IMF

More from Americans for Tax Reform

Murkowski Puts Massive Carbon Tax “On The Table” During Event with Sheldon Whitehouse

Video: Biden “Likely” to Support a “Very High” Carbon Tax, According to Biden Advisor.

Podcast: TCI... It's a Tax!

Posted by John Kartch on Sunday, November 22nd, 2020, 11:31 AM PERMALINK Follow @JohnKartch

Joe Biden's Treasury Secretary pick wants to impose a carbon tax on the American people. Biden and Kamala Harris have also endorsed a carbon tax, an idea so radical that it was rejected by Hillary Clinton because it would devastate low income households.

In an October 19 interview on Bloomberg television, Biden's Treasury pick, Janet Yellen said:

"What I would recommend for the United States -- that hopefully we will in the years ahead, go in this direction -- is simply to put in place a carbon tax."

WATCH:

Biden endorsed a carbon tax during on CNN town hall on September 24, 2019:

CNN's Anderson Cooper asked Biden: "Would you support a carbon tax?"

Biden replied: "Yeah, no, I would."

Harris endorsed a carbon tax. "Under my plan there will also be a carbon fee," she said. CNN asked her, "How do you make sure that [companies] don't do what they will try to do, which is immediately pass that on to consumers?”

Harris replied: “That should never be the reason not to actually put a fee, in particular, a carbon fee."

Another key Biden adviser -- Jennifer Hillman -- said she expects Biden to impose a "very high" carbon tax. Hillman is reportedly in the mix for a job in the Biden administration.

A carbon tax would impose burdens on households due to higher costs of cooling and heating, transportation, and groceries.

Even Hillary Clinton in 2016 decided to oppose a carbon tax after she learned the following from an internal Clinton report prepared by policy staff:

(Source: MEMORANDUM FOR HILLARY RODHAM CLINTON -- Jan. 20, 2015)

Carbon taxes are highly unpopular with voters. In fact, carbon tax advocates can’t even get a carbon tax passed in a single blue state, as this timeline shows.

It's no wonder conservative groups wrote a letter to Congress Stating: "We oppose any carbon tax." The official Republican Party platform also rejects "any carbon tax."

Biden's carbon tax will also shatter his pledge to each and every American making less than $400,000 that he will not raise a single penny of any tax.