Connecticut Examples of Tax Reform Good News

Posted by John Kartch on Saturday, February 23rd, 2019, 10:30 AM PERMALINK Follow @JohnKartch

Thanks to the Tax Cuts and Jobs Act enacted by congressional Republicans and President Trump, 90 percent of American wage earners have higher take-home pay. And employers of all sizes are hiring, raising pay, increasing benefits, upgrading equipment and expanding operations.

Below are several examples of tax reform good news in Connecticut. (Additions to this list can be sent to jkartch@atr.org)

Charter Communications, Inc. (Stamford, Connecticut) – Base wage raised to $15 per hour; commitment to hire over 20,000 employees by 2020:

With the resources and investment confidence resulting from historic tax reform legislation and the FCC’s removal of the 1930’s era regulatory framework for internet service, Charter is increasing our investment in our workforce by ensuring all employees are paid a minimum wage of at least $15 per hour, including target commissions, within the next year.

In addition, the reforms in Washington are allowing Charter to increase its capital investment including in its broadband network. Last year, given the general deregulatory environment and anticipating the Administration, Congress, and the FCC enacting these pro-growth policies, we announced we would hire 20,000 employees and invest $25 billion in infrastructure.

Today, with tax reform and the removal of the Title II statutory framework both a reality, Charter will continue the capital investment program we started last year and will complete it by 2020. In 2017, we extended the reach of our high-speed broadband network in rural areas like Meeker, CO, Lakeview, OR, Hawthorne, NV, as well as to more than 42,000 underserved and unserved homes and businesses in New York State. Charter remains steadfast in our commitment to continue to bring our broadband service, with a minimum speed of 100 Mbps, to more communities across the country. – Feb. 2 2018, Charter Communications Inc. statement

Kaman Corp. (Bloomfield, Connecticut) – $1,000 tax reform bonuses:

Bloomfield manufacturer Kaman Corp. says it's joining the list of U.S. employers sharing the wealth with workers in the wake of federal tax reform.

The maker-supplier of aeroparts, custom aircraft and power-distribution products disclosed Wednesday that about 2,400 workers who were on its payroll on or before Oct. 1, 2017 and who earned less $75,000 a year are eligible for a $1,000 bonus. However, each must remain on the payroll through Aug. 31 to collect, CEO Neal J. Keating told staff in a memo. – April 18, 2018, Hartford Business Journal article excerpt

Pitney Bowes (Stamford, Connecticut) – Pay raises for the majority of U.S. hourly employees:

Pitney Bowes, a global technology company that provides innovative products and solutions to power commerce, announced that, with the signing of the Tax Cuts and Jobs Act in December 2017, the Company will make an investment commitment of more than $18 million on an annualized basis to raise wages of the majority of its U.S. hourly employees. In addition, Pitney Bowes plans to fund key investment areas within the Company to provide more value to its small and medium business clients.

“The tax reform legislation provides Pitney Bowes the flexibility to invest in our people, our clients, our company, and the communities where we live and work,” said Marc B. Lautenbach, President and CEO. “We believe that the investments we make in our employees and our clients not only strengthen our business for the long term, but ultimately benefit our shareholders.”

In addition, Pitney Bowes plans to provide additional investments that contribute to the long-term growth of the Company, including funding the financing offerings within Pitney Bowes to support growth in its small and medium-sized business clients in the U.S. – Jan. 31 2018, Pitney Bowes press release excerpt

Shortway Brewing Co. (Newport, Connecticut) -- Increasing wages and hiring new employees:

Mr. Shortway said the new tax plan, along with the Craft Beverage Modernization and Tax Reform Act, also passed last year, have already helped the brewery save money. The craft beverage act greatly reduced excise taxes on small-scale brewers and the tax plan has additional provisions designed to help small businesses.

Mr. Shortway said he was able to give his employees a small raise and hire more workers as a result of the tax savings. He said although it is a bit early to know what the long-term impact of the tax plan will be, he expects it will keep helping going forward.

“Growth is picking up,” he said. - May 11, 2018, News-Times article excerpt

The Travelers Companies, Inc. (Hartford, Connecticut) -- $1,000 bonuses for 14,000 employees with a base salary less than $75,000:

Today, comprehensive U.S. tax reform has been signed into law. One objective of the legislation is to spur economic growth and therefore the U.S. economy.

In addition to benefiting from economic growth, Travelers will benefit directly from the legislation in two important ways. First, like all companies, our corporate tax rate will decrease from 35% to 21%. Second, the legislation will level the playing field for U.S. insurers by eliminating a loophole that foreign insurers have used to our disadvantage for decades to move their U.S. profits offshore to avoid paying their fair share of U.S. taxes.

One of the opportunities all of these benefits create for us is to make additional investments in our business. I shared at a recent all-employee meeting that our vision as it relates to investment and innovation is to strengthen our competitive advantages with two goals in mind: be the undeniable choice for the customer and an indispensable partner for our agents and brokers.

The leadership team decided that given our confidence in our business and the way we are successfully positioned for the opportunities ahead, we should start making additional investments immediately. We also came to the conclusion that we should use the opportunity to make our first investment in our most valuable asset and greatest competitive advantage — our people.

I’m pleased to announce that we will be giving approximately 14,000 employees with a base salary of $75,000 per year or less and who meet our performance expectations a special one-time bonus of $1,000. The bonus will be paid in January to then current employees. Eligible employees will hear more shortly.

In addition, while we have only a small number of U.S.-based employees making less than $15 an hour, we will increase their hourly wage to $15. – The Travelers Companies, Inc. note to employees

AVANGRID (Orange, Connecticut) – the utility is passing savings from tax reform to customers:

AVANGRID, Inc. (NYSE: AGR), a diversified U.S. energy company, today issued the following statement regarding the impact of the 2017 tax reform act.

AVANGRID’s regulated natural gas and electricity companies will pass along to customers the full benefit of any tax savings that the companies realize as a result of the 2017 federal tax reform act.

Among other changes, the tax reform act reduces the federal corporate tax rate from 35 to 21 percent. As a matter of fairness, AVANGRID believes that any resulting tax savings should be extended to customers. – Jan. 10, 2018 AVANGRID press release

United Technologies Corporation (Farmington, Connecticut) – 35,000 new employees to be hired, and $15 billion in capital expenditures and research/development over the next five years:

The competitive tax system resulting from U.S. tax reform is encouraging global companies, such as United Technologies, to make long-term investments in innovation in America. – May 23, 2018 United Technologies Corporation press release excerpt

Hartford Financial Services Group Inc. (Hartford, Connecticut) -- $1,000 bonuses for employees making less than $75,000 per year. This amounts to 9,500 employees:

The Hartford Financial Services Group Inc. on Friday became the latest company to announce bonuses tied to a federal overhaul reducing the corporate tax rate.

Chief Executive Officer Christopher Swift told reporters the investment and insurance company will distribute bonuses of $1,000 each to employees who are paid less than $75,000 a year. – Jan. 5 Hartford Courant article excerpt

Cigna Corporation (Bloomfield, Connecticut) – Base wage raised to $16 per hour; increased 401(k) matches:

Global health service company, Cigna (NYSE: CI), today announced that the net financial benefits of United States tax reform will allow the company to further accelerate investments in our employees, our capabilities and our customers, clients, partners, and communities.

Through a series of moves, Cigna is reaffirming the critical role of employees, further fueling the company’s commitment to be champions for its communities, and continuing its investments in innovation and capabilities that drive differentiated value for customers and clients.

“It is because of our employees that Cigna continues to deliver on our mission to improve the health, well-being and sense of security of those we serve,” said David Cordani, Cigna President and Chief Executive Officer. “Reinvesting a portion of savings from tax reform in our employees is a reinvestment in our mission.”

Effective today, Cigna is establishing a minimum wage across its U.S. employee base of $16 an hour, substantially exceeding the national minimum wage in the United States as well as the hourly rate paid at many global corporations.

Cigna will also provide salary increases above the $16 an hour level, largely to front line employees. These investments in employee wages will total more than $15 million.

Additionally, Cigna is adding $30 million to its 401(k) program to match an additional one percent of employee compensation contributed to the 401(k) in 2018. This match will benefit the retirement accounts of over 30,000 employees. – Jan. 31, 2018 Cigna Corporation press release

Information Services Group (Stamford, Connecticut) – $500 additional contribution to U.S. based employees’ 401(k) accounts, additional funds for global digital initiatives:

“Today it (Information Services Group) will earmark funds for additional investment in global digital initiatives over the next two years to accelerate growth, and make an additional contribution of $500 to every U.S. employee's 401(k) retirement account on U.S. Tax Day, April 17, 2018. The moves are in response to the recent passage of the federal Tax Cut and Jobs Act.”—Dec. 22, 2018 Information Services Group press release excerpt

Walmart – Connecticut employees at 33 Walmart store locations 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.

AT&T -- $1,000 bonuses to 1,272 Connecticut 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

The United Illuminating Company (New Haven, Connecticut) - the utility will pass tax reform savings to customers.

Webster Financial Corporation (Waterbury, Connecticut) – Base wage raised to $15 per hour; $1,000 bonuses to full-time employees below vice-president level; $1 million in additional charitable contributions:

Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A. and its HSA Bank division, today announced an acceleration of investment in its employees and the communities it serves following the passage of new federal tax reform legislation.

These investments include:

Payment of a one-time $1,000 cash bonus in the first quarter of 2018 to full-time employees who are below the vice president level. This payment will benefit approximately 70 percent of all Webster full-time employees;
Increasing Webster's minimum wage to $15 per hour by the end of 2018;
Beginning in 2018, augmenting Webster's annual philanthropic and community investment by $1 million; and,
Enhancing Webster's investment in strategic employee development initiatives and early career programs, creating new job opportunities in our markets. – Jan. 4 2018, Webster Financial Corporation press release excerpt

T.J. Maxx – 28 stores in Connecticut – 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

Windsor Federal Savings (Windsor, Connecticut) – $250 bonus for all employees with the exception of upper management:

With the signing of the tax reform bill into law all employees of Windsor Federal Savings with the exception of senior management will receive a one-time special bonus of $250. This bonus will coincide with their raising the hourly minimum wage of all full-time employees to $15.00 per hour.

George Hermann, President and CEO of Windsor Federal Savings, says the bank has a positive outlook on the economy due to the tax reform. “The relief that this tax bill provides to business should help to spur our economy, and is important to building meaningful, long-term growth in Connecticut, and beyond. The awarding of these bonuses and our minimum wage increase is our way of sharing our optimism with our most important asset: our valued employees.” – Windsor Federal Savings press release

Home Depot -- 29 locations in Connecticut, bonuses for all hourly employees, up to $1,000.

Lowe's --2,000+ employees at 17 stores and one distribution facility in Connecticut. Employees will receive bonuses of up to $1,000 based on length of service, for 260,000 employees; expanded benefits and maternity/parental leave; $5,000 of adoption assistance.

Waste Management Inc. (Multiple locations in Connecticut) -- $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

Ryder (Eight locations in Connecticut) – Tax reform bonuses to employees.

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

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

Apple (Apple store locations in Danbury, Farmington, Greenwich, New Haven, South Windsor, Stamford, Trumbull) - $2,500 employee bonuses in the form of restricted stock units; Nationwide, $30 billion in additional capital expenditures over five years; 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.

McDonald’s (150+ locations in Connecticut) – 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

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

Starbucks Coffee Company (Multiple locations in Connecticut) –$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.

U-Haul (Multiple locations in Connecticut) – $1,200 bonuses for full-time employees, $500 for part-time employees.

CarMax (Retail locations in Hartford and New Haven) – $250-$1,500 bonuses depending on length of service:

“The nation’s largest retailer of used cars, announced plans to provide one-time bonuses to most hourly and commissioned full-time and part-time associates as a result of the recently passed Tax Cuts and Jobs Act of 2017. Bonus amounts will vary from $200 up to $1,500 based on length of service with the company.” – Feb 23. 2018, EPR Retail News article excerpt

FedEx (Multiple locations in Connecticut) – Accelerated and increased compensation; pension plan contributions:

“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. – Jan. 26 2018, FedEx press release

Wells Fargo – 69 locations in Connecticut; Raised base wage from $13.50 to $15.00 per hour; $400 million in charitable donations for 2018; $100 million increased capital investment over the next three years.

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

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

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ATR leads coalition opposing hike to Passenger Facility Charge

Posted by Michael Palicz Brenna Reach on Thursday, May 23rd, 2019, 5:02 PM PERMALINK Follow @Mike_Palicz

Americans for Tax Reform recently released a coalition letter in opposition to an increase in the Passenger Facility Charge (PFC).

The PFC is just one of the many government-imposed costs charged to the flying public that drive up ticket prices. The PFC is collected from enplaned passengers at commercial airports controlled by local and state governments. Revenue earned through the PFC program is used to fund airport improvement projects and is currently capped at $4.50 per enplanement at a maximum of $18 per round trip.

In the letter, the signers state:

Airport executives have repeatedly advocated for nearly doubling the current cap on the PFC, raising it from $4.50 per enplanement to $8.50. This staggering hike would mean a family of four could be charged up to $136 on a roundtrip flight in PFC costs alone.

Before considering raising the PFC, it should be noted that taxes, fees, and other government charges already make up over 20% of the cost of an average domestic flight. Lawmakers should be looking to lighten, not worsen, the burden placed upon the flying public as air travel is an engine that helps spur our nation’s economy.

Lawmakers should oppose a PFC increase whether it is considered as standalone legislation or part of a larger government funding bill. A PFC increase is not needed to finance airport investment, would fall squarely on travelers, and goes against regular order.

You can read the full contents of the letter here.

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Posted by Michael Palicz on Wednesday, May 22nd, 2019, 5:56 PM PERMALINK Follow @Mike_Palicz

This afternoon, House Minority Whip Steve Scalise (R-LA) and Rep. David McKinley (R-WV) re-introduced their resolution condemning a carbon tax.

ATR President Grover Norquist issued the following statement in support of the Scalise McKinley resolution:

I urge a vote FOR the Scalise and McKinley resolution putting Congress on record in opposition to any carbon tax. A carbon tax will raise the cost of living for ALL Americans. It will increase the cost of heating one’s home in winter, of air-conditioning in the summer and raise the cost of filling one’s car at the gas station. A carbon tax will price American goods out of world markets. Every left-wing group and congressman wants a carbon tax—it is a European Style Value Added Tax (VAT) on training wheels. Every friend of American workers and taxpayers will vote YES for the Scalise and McKinley anti-carbon tax resolution.

Last July, 41 conservative groups signed a coalition letter in support of the Scalise/McKinley anti-carbon tax resolution introduced last Congress.

ATR applauds Whip Scalise and Rep. McKinley for their leadership on this issue and for protecting Americans from a new energy tax.

ATR will continue to strongly oppose any form of a carbon tax.

Photo Credit: Zennie Abraham

Posted by Doug Kellogg on Wednesday, May 22nd, 2019, 5:13 PM PERMALINK Follow @adkel07

The Ohio House recently passed a two-year budget (HB 166). It has rightfully earned praise for its solid income tax cut.

However, a deeper look reveals some bad policies that would make it more expensive for small business owners, visitors to the state, and people hailing a rideshare. And it also includes a measure that would punish innovation in medicine by bringing socialist price controls to the Buckeye State.

For starters, small businesses face some big changes under the House budget.

The plan reduces the amount of income small businesses can deduct from $250,000 to $100,000. It also removes a 3 percent cap on the tax rate for income over $250,000 – meaning businesses earning more than that could face a tax rate over 4.67 percent, a significant increase. It is also retroactive, which can be very difficult for small business owners who now will face unexpected costs.

The Ohio chapter of the National Federation of Independent Businesses (NFIB) has raised concerns over the changes.

The House budget also includes a tax hike on booking travel. It imposes occupancy tax on service fees for online travel agent services.

These services, like Expedia, Travelocity, and others – make it easier for people to book hotels or other accommodations online. They attract travelers, which are a boon for restaurants, shops, and other local businesses.

The thing is, the cost of your hotel room is already taxed. The House proposal adds taxes to service fees, driving up costs for Ohioans and out-of-state visitors when they use travel booking services.

That’s not the end of the taxes in the House plan. Ridesharing would also get more expensive.

Legislation that would require online marketplaces to collect and remit sales taxes will, perhaps unintentionally, ensnare for hire vehicles. The straightforward impact is the state sales tax will hit ridesharing.

It’s not only bad if unintentional, but this is also a form of double taxation. Ridesharing drivers are already paying income tax on their earnings, and now will have to deal with sales tax. This burden will only make life tougher for drivers, and more expensive for Ohioans.

Another part of the budget would bring foreign price controls to Ohio by allowing countries with socialist health care systems to influence prescription drug reimbursement rates for Medicare Part B.

As Americans for Tax Reform wrote in submitted testimony:

“The Department of Health and Human Services (HHS) recently proposed the “International Pricing Index” (IPI) payment model for drugs administered under Medicare Part B. Essentially, this payment model imports foreign price controls into the United States by calculating the Part B reimbursement rate based on the prices set by 14 other countries.”

The bottom line: the progress the House is making with their income tax cut is weighed down by the harmful proposals in the very same budget. Senate leaders can help the House’s income tax cut become even better by detaching it from tax hikes and socialist drug pricing controls.

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Posted by Adam Sabes on Wednesday, May 22nd, 2019, 4:59 PM PERMALINK Follow @asabes10

In a 10-day span, “Mayor Pete” Buttigieg endorsed the imposition of six tax increases on the American people.

It all started on May 9, when he endorsed a steep new “parcel tax” on homes and businesses while kowtowing to union bosses in Los Angeles. The tax will drive up the cost of living for owners and renters alike. “This could break me,” said resident Maria Fischer.

On May 16, Buttigieg endorsed a carbon tax, which would raise the cost of everything Americans buy and do.

And then during a Fox News town hall this past Sunday, Buttigieg proposed four new tax hikes – an income tax hike, a corporate tax hike, a wealth tax, and a financial transactions tax -- and slammed the Tax Cuts and Jobs Act as an “unnecessary and unaffordable tax cut for the very wealthiest.”

Buttigieg said he would institute a “fairer, which means higher marginal income tax rate on those earning the most,” “a reasonable wealth tax,” possibly a “financial transactions tax,” as well as raising unspecified corporate tax provisions.

Buttigieg is just as radical on taxes as the rest of the Democrat 2020 presidential field, and has now earned the nickname “Tax Hike Pete.”

See Also:

“First thing I’d do is repeal those Trump tax cuts,” Joe Biden said during a campaign stop in Colombia, South Carolina on May 4.

“On day one, we gonna repeal that tax bill that benefited the top one percent and the biggest corporations in this country,” Kamala Harris said during a NAACP fundraiser in Detroit, Michigan on May 5.

“When I’m president, if God Willing I am, we’re going to reverse those Trump tax cuts,” Joe Biden said during a campaign stop in Nashua, New Hampshire on May 13.

“On day one, we gonna repeal that tax bill that benefited the top one percent and the biggest corporations in this country,” Kamala Harris said during a campaign stop in Nashua, New Hampshire on May 15.

Photo Credit: Gene Driskell/Flickr

Posted by Tom Hebert on Wednesday, May 22nd, 2019, 3:08 PM PERMALINK Follow @tomhebertdc

Democrat 2020 frontrunner Joe Biden is calling for a repeal of the Tax Cuts and Jobs Act. A survey released by the National Association of Manufacturers (NAM) shows such a repeal would be a massive blow to manufacturing jobs, wages, and investments.

According to NAM’s Manufacturers’ Outlook Survey from Q1 of 2019, if the tax cuts were repealed:

66 percent of manufacturers would have to scale back investment in the United States.
62 percent of manufacturers said that they would scale back projected wage increases and bonuses.
54 percent of manufacturers said they would cut back on hiring entirely

Small manufacturers have benefited greatly from the 20 percent passthrough deduction, and would be greatest hit if the tax law were repealed.

In 2018, NAM found that manufacturing confidence and job growth hit record-highs.

The survey also showed that 89.5 percent of manufacturers are optimistic about their company’s outlook. This optimism continues a record-high streak averaging 91.8 percent spanning the past 9 quarters.

NAM’s survey also forecasts that:

Employee wages will continue to rise 2.3 percent over the next 12 months.
Full time employment will increase 2.1 percent over the next 12 months, suggesting a tight labor market.
Capital investments will rise 2.8 percent over the next 12 months.

The NAM Shop Floor blog is an excellent resource documenting examples of how the Tax Cuts and Jobs Act has helped manufacturers of all sizes.

The effects of the tax reform bill are being felt all across the economy. In April, the economy added 263,000 jobs, and unemployment is at a 50-year low of 3.6 percent. Over the past year, the economy has added an average of 218,000 jobs per month. Families all across the country are seeing direct tax reduction — on net, households are paying an average of 24.9 percent in lower taxes according to a report released by H&R Block based on their clients’ tax returns.

Biden fashions himself a champion of manufacturing, yet remains obsessed with repealing the very tax cuts which helped revive manufacturing in the United States.

See:

Bernie Sanders: I will raise your taxes

Biden: “First thing I’d do is repeal those Trump tax cuts.”

Joe Biden broke his middle class tax pledge

“Mayor Pete” Calls for Steep Tax Hike on Homes and Businesses

Kamala Harris Vows Repeal of Tax Cuts “on Day One”

Biden: “When I’m President, if God willing I am, we’re going to reverse those Trump tax cuts.”

Photo Credit: Adam - Flickr

Posted by Derek Peterson on Tuesday, May 21st, 2019, 5:03 PM PERMALINK

If at first you don’t succeed, try, try again.

Pennsylvania Gov. Tom Wolf has once again proposed a severance tax on natural gas drilling, this time to pay for “Restore Pennsylvania”, a $4.5 billion infrastructure plan.

The thing is, Pennsylvania already taxes natural gas extraction. The state imposes what is called in impact fee on gas installations which is already used for state expenditures. A severance tax is a double tax, and any claims that the natural gas industry is avoiding taxes is a lie.

This is not the first time he has called for such a tax. In 2014, Gov. Wolf called for a severance tax designed to help balance budgets, or pay for the growth of benefit programs when the state was in a bad place financially. He has called for severance taxes every year he has been in office, however these proposals have not been considered by the Republican-controlled Legislature.

Gov. Wolf is now using “infrastructure” as an excuse to implement this long-desired severance tax. His proposal, which should be appearing in the form of a bill soon, calls for borrowing the $4.5 billion needed for the projects immediately, and paying off the debt over a 20-year time period using revenue from the severance tax.

David Spigelmyer, president of the Marcellus Shale Coalition, said the following about Gov. Wolf’s proposal:

“Pennsylvania’s tax on natural gas – the impact fee – generates hundreds of millions of dollars annually for critical infrastructure programs across the entire Commonwealth. This existing annual tax revenue, when combined with other business taxes paid by the industry as well as lease bonuses and royalties tied to natural gas development on state land, has provided nearly $5 billion in revenue since unconventional shale gas development began.”

Pennsylvania’s existing impact fee achieves the same goal severance taxes set out to do in other states. Adding a severance tax on top of the impact fee would create a massive burden on the natural gas industry in Pennsylvania, making it a very unattractive state for future development.

Natural gas has been a boon to Pennsylvania, not just economically, but it has lowered carbon emissions. The state produces 20 percent of the natural gas in the United States, and Pennsylvania’s carbon emissions have gone down by 30 percent as natural gas use has grown in recent years.

It makes no sense to risk this progress with a double tax.

When asked if he would consider any other methods of funding for his proposal, Gov. Wolf stated he was open to other proposals, but was skeptical they would be able to raise the revenue needed for his project. “If you have another way of raising $4.5 billion, that are going to be dollars directed toward doing things that the people of Pennsylvania really need to make their lives better, I'm all ears”, he said.

Gov. Wolf’s severance tax has been defeated before, and it must be defeated again.

Photo Credit: Nicholas Tonelli

Posted on Tuesday, May 21st, 2019, 1:55 PM PERMALINK

ATR recently joined a coalition letter led by the National Taxpayers Union to oppose the Federal Reserve considered proposal to operate a real-time payments system. The Fed’s system would directly compete with the private sector, putting nearly all customers at risk of delayed financial transactions by forcing financial institutions to choose between doing business with an existing private structure or waiting until their regulator builds a clearing system in the next five years.

In the past few years we have seen how technology has played an important role in facilitating faster payments between individuals compared to the long-established model of using checks to pay for goods and services. Aaron Klein from the Brookings Institution helps illustrate the delay in this outdated check cashing system:

If your payday was Friday, March 1 and you deposited your paycheck, it may not clear until sometime on Tuesday, March 5th. What do you do if the rent, childcare, and other fixed expenses are due the same day you get paid? Unless your paycheck is available the instant you deposit it (and that is not the case with direct deposit) you are stuck with a gap.

With technology advancement becoming cheaper and more widely available, customers can access the money immediately once it is received. Take Zelle for example, a person-to-person real-time payments system created by financial institutions for their customers to access funds sent to their bank accounts near-instantaneously. In other words, if David owes Ethan his portion for the lunch bill and both of them use Zelle, Ethan can pay David back immediately and those funds are available just about as fast as receiving a text message and opening it to read.

In 2014, The Clearing House Payments Company (an institution that provides much of the technological “plumbing” or “infrastructure” for conducting financial transactions) began the process of creating the real-time payments system in use today. The system would go live in November 2017, after large financial institutions put up the funding to build the system and has actively been attracting banks of all sizes to join the network. This benefits customers across multiple financial institutions who can send and receive payments to use near-instantaneously. The goal of The Clearing House and banks joining the system is to have all deposit holding banks using the service by the end of 2020, making the system “ubiquitous.”

A year after The Clearing House’s real-time payments system went live, the Federal Reserve published a request for comments to review and consider feedback of how the current privately created system is operating and if there was a need for the Federal Reserve to enter the market and create its own version. As George Selgin of the Cato Institute correctly points out, there would be several chilling effects the Federal Reserve would have in the marketplace should it move ahead with its own network:

No less importantly, unlike private sector providers the Fed does not have to convince shareholders that it can recover the costs involved in any new payments venture it undertakes. Thanks to its unique powers, the possibility that the Fed might compete head on with the private RTP network is likely to have an exceptionally chilling effect on RTP’s ability to attract new members, and to do so even despite RTPs first-mover advantage, and also despite any real efficiency advantages it might enjoy. Banks faced with substantial network-interface investment costs will hesitate to join RTP until they are certain of the Fed’s intention. Even if the Fed does not ultimately enter the market, this hesitation will itself be costly, because it will delay the achievement of a ubiquitous system. The likelihood that the Fed will take several years to establish its own RTGS system will compound this delay. The case of rival private-sector entrants differs, both because such entrants are only likely to contemplate entering the market if their stakeholders believe them to be capable of operating more efficiently than established rivals, or of offering services that are clearly superior to theirs, and because they must in fact offer superior or less expensive services to gain market share.

For these reasons, Americans for Tax Reform opposes any entrance of the Federal Reserve into the real-time payments market and is proud to join the coalition of organizations who share this view.

Click here to view National Taxpayer Union’s coalition letter.

Photo Credit: Sébastien Bertrand

Posted by Tom Hebert on Tuesday, May 21st, 2019, 1:38 PM PERMALINK Follow @tomhebertdc

President Trump recently announced a deal with Mexico and Canada to remove steel and aluminum tariffs on imports and remove retaliatory tariffs imposed on American businesses. This is a big win for American workers and paves the way for swift ratification of the president’s United States-Mexico-Canada Agreement (USMCA).

Ending the 25 percent tariff on steel and the 10 percent tariff on aluminum from Mexico and Canada will have broad, positive effects. On net, the tariffs impacted over $400 billion of traded goods on an annual basis. According to a report released by the American Action Forum, steel tariffs increased imported steel costs by $5.8 billion, and aluminum tariffs increased imported aluminum costs by $1.7 billion.

Retaliatory action by Mexico has adversely impacted the cost of American exports by $3.7 billion. Furthermore, Canadian retaliatory action has adversely impacted the cost of American exports by $16.6 billion.

Trump has been steadfast in his desire to renegotiate trade deals for the benefit of American workers and businesses and the end of these tariffs should pave the way for approval of the USMCA.

The USMCA updates NAFTA to include new automotive rules, new protections for intellectual property rights, and modernizing agricultural trade to benefit American farmers.

A recent report shows that the USCMA would raise U.S. real GDP by $68.2 billion and create approximately 176,000 American jobs.

The USMCA would increase U.S exports to Canada by $19.1 billion, and increase U.S. exports to Mexico by $14.2 billion. Under the new agreement, U.S. imports from Canada are projected to increase by $19.1 billion, and U.S. imports from Mexico are projected to increase by $12.4 billion. The report estimates that the USMCA would have a positive impact on all U.S. industry sectors, with the manufacturing and services sectors experiencing the most gains.

The trade deal would also be a boon for the automotive industry. The Office of the United States Trade Representative estimates that USCMA ratification would add $34 billionin new automotive manufacturing investment, $23 billion in new annual purchases of U.S. automotive parts, and 76,000 jobs in the next five years.

If implemented, the USMCA would contribute to already robust economic growth.

In April, the economy added 263,000 jobs, and unemployment is at a 50-year low of 3.6 percent. Over the past year, the economy has added an average of 218,000 jobs per month, and unemployment for key demographics are at all-time lows. Families all across the country are seeing direct tax reduction — on net, households are paying an average of 24.9 percent in lower taxes according to a report released by H&R Block based on their clients’ tax returns.

Trump’s removal of tariffs on Mexico and Canada is a huge win for American workers. Now, it is time for Congressional Democrats to work with Republicans in a bipartisan fashion to ratify USCMA.

Photo Credit: Gage Skidmore

Bernie Sanders: I will raise your taxes

Posted by Adam Sabes on Tuesday, May 21st, 2019, 11:39 AM PERMALINK Follow @asabes10

2020 Democratic presidential hopeful Bernie Sanders has repeated multiple times that he will impose a tax increase if elected.

“You’re going to pay more in taxes,” Sanders said during a Fox News town hall in Bethlehem, Pennsylvania on April 15 . At the same town hall he said, “Are people going to pay more in taxes? Yes.”

[Click here for video]

“And yes, we have to raise individual tax substantially higher than they are today,” Sanders said during an interview with Jake Tapper on July 5, 2015.

On a separate CNN townhall hosted by Chris Cuomo in Des Moines, Iowa on Jan. 25, 2016, Sanders promised that “yes, we will raise taxes, yes we will.”