How the Trump Republican Tax Cuts Are Helping Delaware

Posted by John Kartch on Thursday, July 2nd, 2020, 12:15 PM PERMALINK Follow @johnkartch

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

65,680 Delaware households are benefiting from the TCJA’s doubling of the child tax credit.

Every income group 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.

311,370 Delaware 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.

11,230 Delaware 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, Delaware residents are saving money on utility bills. Lower electric, water, and gas bills help households and small businesses operating on tight margins. For example, Delmarva Power (see below) passed along tax reform savings to its customers by reducing its power rate increase request in Delaware by $26 million.

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

Green Recovery Technologies, LLC (New Castle, Delaware) — $1,000 bonuses for all seven employees:

"We are a startup waste-to-value biochemical company of seven that believes in the direction the country is going and that our best days are ahead of us. These tax reductions benefit our workers by providing an instant no cost wage hike. Paying the bonuses in a low tax environment was an easy decision for GRT since we know that this low cost capital is being invested in the local community where it will be spent on goods and services as well as being by employees into their retirement savings accounts.” — Kenneth Laubsch, President and CEO, Green Recovery Technologies, LLC

Delaware Supermarkets Inc. (Wilmington, Delaware) -- $150 extra bonuses to 1,000 non-management personnel.

“Our ability to provide bonuses and training to our employees demonstrates the far-reaching implications of this tax reform. We have a renewed optimism for the local and the national economy, and this important legislation better positions us for future growth.” – Christopher Kenny, CEO

“This legislation benefits those of who count on Main Street budgets for our livelihoods, and it’s a privilege to share the benefits with the men and women who work so hard at ShopRite. It makes it possible to succeed in a very competitive industry.” -- Melissa Kenny, director of sales and marketing

Navient (Wilmington, Delaware) – 98% of Navient’s 6,700 employees will receive a $1,000 bonus (approx. 6,566 bonus-eligible employees):

Crediting the new corporate tax rate recently approved by Congress, approximately 98 percent of Navient employees across the country received a $1,000 bonus just before the holidays.

Navient has approximately 6,700 employees nationwide, including more than 900 in Hanover Township, company officials say.

According to a memo from Jack Remondi, Navient president and CEO, the firm announced it will pay a $1,000 bonus to all non-officer employees.

Colleen Hughes, an instructional design specialist — she works behind the scenes in the training department — said co-workers “cheered and hollered” when they read their emails.

“And it came right before the holidays,” said Hughes, 33, of Dupont. “I literally started to cry. I was shocked. I have a 3-year-old and I overspent for the holidays. This really helped me out.”

As news of the $1,000 bonuses made its way through Navient, Hughes said people became emotional.

“I know I feel I’m valued that we were even considered,” Hughes said. “We all feel valued by the company — that we all are a valuable asset to the company. So much so that they recognize our talent and dedication.” -- Jan. 2, 2018 Wilkes-Barre Times Leader article excerpts

Farmers Insurance of Salem (Wilmington, Delaware) -- An insurance company is moving their offices from New Jersey to Wilmington, Delaware to a location in an Opportunity Zone created by the Tax Cuts and Jobs Act:

A New Jersey insurance company is moving its offices to Wilmington and with it more than 50 jobs.

Delaware's privately run economic development agency announced this week it had negotiated a $400,000-taxpayer grant package for Farmers of Salem. In a press release, it said the company plans to spend $5.6 million to purchase and renovate an existing office building in Wilmington's "central business district."

But the company's grant application, released Friday, states that Farmers of Salem's plans instead are to move to a building along the Wilmington Riverfront. Today, the 3-story brick building, located at 1 Avenue of the Arts, houses two companies, Mitchell Associates and Blue Rock Financial Group.

The once-industrial redeveloped structure sits along the banks of the Christina River next to the Riverfront Market. It has been for sale since at least 2018. Three months ago, its listed price was reduced by $300,000 to $4.5 million. It is unclear what Farmers of Salem's final negotiated price might be, as neither the company, nor its broker returned a call. The building's seller declined to comment. Also unclear is whether either of the building's existing tenants will move out following Farmers' purchase. Currently, 6,000 square feet on the third floor sits vacant.

Farmer of Salem's move into Wilmington likely will boost the city's commercial real estate market. While owners of office buildings in Delaware's largest city still struggle to fill large amounts of empty offices, momentum might be shifting. Farmers of Salem is the latest in a string of out-of-state buyers of commercial properties in a market that has long been dominated by a single owner, the Buccini/Pollin Group.

The insurance company told Delaware officials that it is seeking "a more vibrant and robust community." It said its decision to relocate to Wilmington came amid overall company growth and the taxpayer "incentives do help."

Other organizations that have recently considered relocating to Wilmington include Widener University's Delaware Law School. Its dean, Rodney Smolla, said the school ultimately decided against a move, yet plans to open a "satellite location" remain.

CSC, the state's largest and most politically influential registered agent company, recently purchased a building next to the Wilmington train station.

Based on its $120,000 real estate transfer tax payment, The News Journal estimates the sale price for the 112 S. French St. property at $4.8 million, or about $110 per square foot.

The number is significantly less than the asking price of $184 per square foot for the nearby 1 Avenue of the Arts building, which Farmers intends to buy.

Highlighted on a sale brochure for 1 Avenue of the Arts is that two floors of the building currently is leased as well as a proclamation that the property sits within a Delaware Opportunity Zone.

Gov. John Carney recently named much of downtown Wilmington and the Riverfront as Opportunity Zones. Investors who direct money to such "economically distressed" areas can avoid or delay paying federal taxes. Not included on the state's Opportunity Zone list are Wilmington's low-income neighborhoods of Hedgeville and Hilltop. -- February 1, 2020 Delaware News Journal article

Second Chance Farm (Wilmington, Delaware) -- A company focused on helping formerly incarcerated citizens get back into the workforce will be headed to Delaware and will be located in an Opportunity Zone created by the Tax Cuts and Jobs Act:

First, you need to understand the Opportunity Zone Program, which was enacted as part of the 2017 Tax Cuts and Jobs Act.

It’s an economic development program where census tracts are designated as eligible for tax breaks for private investors through a program called Opportunity Funds. The goal is to help under-resourced communities become more economically stable by creating jobs for the people who live there — or, as the IRS puts it in its FAQ: “Opportunity Zones are designed to spur economic development by providing tax benefits to investors.”

Opportunity Zones are basically an incentive for people to invest in areas that need it — something that, historically, has led to gentrification and displacement of the under-resourced people who were theoretically meant to benefit. (See a map of Delaware’s zones here.)

That’s why Second Chances Farm, an LLC founded by entrepreneur and TEDxWilmington organizer Ajit George, is an interesting concept — one that combines farming, jobs for local returning citizens and ultimately entrepreneurship opportunities that require neither capital nor credit.

“We call them ‘green collar” jobs,” said George in an interview with Technical.ly. “Green because it’s organic, it’s pesticide free, and it’s herbicide free. And it’s about growing food locally. This is not a hobby, this not a corner garden in the summer, it’s about growing food year round, on a production scale.”

So, how did the concept of Opportunity Zones, urban farming and ex-offenders come together? It was the result of two very different 2016 TEDxWilmington talks — one about reentry and recidivism, the other about farming of the future.

Employees — virtually all of whom will be formerly incarcerated — will run the farms with a starting pay of $15 an hour. As the company grows, the plan is for employees to eventually acquire farms of their own and become business owners (or “compassionate capitalists,” as Second Chances Farm calls them).

In contrast to downstate’s traditional outdoor crops, Second Chances Farm will be an indoor, LED-lit, vertical hydroponic farm that will operate year-round; the first farm’s location is yet to be determined

“There’s no soil, it’s all grown in continuously flowing water,” said George.

Vertical hydroponic farming has become increasingly popular over the last few years across the country — even Jeff Bezos has backed a hydroponic farming venture. Second Chances will likely be the first one in Delaware.

The for-profit venture is projected to have its first indoor farm up and running by the fall, pending a final clearance with the IRS. It’s already won a few awards and startup grants.

If placing a farm inside the city seems strange, consider the challenges the average ex-offender faces when trying to get to get a job — and how much easier it would be if $15-an-hour jobs were available right in the neighborhood.

In order to qualify to be placed in a job at Second Chance, inmates heading toward reentry will work with the behavior health and wellness program Connections during the final six months of their sentences.

“We are working with Connections, who currently have an exclusive contract with the Delaware Department of Corrections with regards to people re-entering society from Delaware’s Prisons,” said George. “Issues like anger management are beyond the scope of what we can do. They offer more social work, so it just made sense for us to work with them.”

Connections also has a transportation group that can help Second Chances Farm employees get to and from work, an issue for many looking for work after reentry, as drivers licenses are sometimes still suspended and getting car insurance can be a challenge.

The organic, hyperlocal vegetable crops will be sold to restaurants, organic farm stands and to cancer patients avoiding even the minimal amount of pesticides allowed in traditional organic mass farming.

“Delaware used to be known for three things — chicken, credit cards and cars,” said George. “What we’re really talking about is adding a new industry, which is organic hydroponic crops. And with that comes my notion, which is ‘compassionate capitalism,’ which is really providing opportunities for people.” -- February 27, 2019 Technical.ly article

Mountaire Corporation (Millsboro, Delaware) – $1,000 or $500 bonuses based on length of service; increased 401(k) matches:

Mountaire had an amazing year in 2017. We are blessed with great people and great opportunities. Our performance is outstanding and the blessings of Jesus Christ are all around us to enjoy.

I am very encouraged that the President of the United States and the Republican Congress have reduced taxes for businesses and individuals for 2018. I am extremely excited about what this new change means to our company and all Mountaire employees.

Very soon you should see the impact of the new lower tax rate in your paychecks.

Additionally, because of this new tax reduction, I am pleased to announce that on February 2, 2018, Mountaire is going to pay a one-time discretionary bonus to hourly employees. This bonus will be subject to normal taxes and distributed to all full-time Mountaire hourly and piece rate employees as follows:

$1,000 for all active full-time hourly and piece rate Mountaire employees with more than 180 days of employment as of January 27, 2018.
$500 for all active full-time hourly and piece rate Mountaire employees with between 91 and 179 days of employment as of January 27, 2018.
$500 for all active full-time hourly and piece rate Mountaire employees with between 1 and 90 days of employment as of January 27, 2018. This group of employees will receive their bonus money as soon as they have completed their first 90 days of employment.

I have also decided to make significant improvements to our 401k savings plan. Effective November 1, 2018, Mountaire’s 401k match will be increased to 100% of the first 3% invested, and 50% of the next 2% invested. And also, effective November 1, 2018 you will be given immediate vesting on 401k matching monies.

All these improvements are being done because of the Tax Reform and Tax Cut passed by the Republicans in Congress and signed into law by our President.

I am very optimistic about our performance and the future of Mountaire and our country.

May God continue bless us and guide us! -- Jan. 26, 2018 letter to employees from Ronald M. Cameron, Chairman

Delmarva Power (Newark, Delaware) – the utility will pass along tax reform savings to customers:

Tax cuts passed by Congress in December have effectively caused Delmarva Power to reduce its power rate increase request in Delaware by $26 million, the company announced on Friday. – February 9, 2018 Delaware Online excerpt

Harvard Business Services, Inc. (Lewes, Delaware) – $1,000 bonuses for all full-time employees:

“Harvard Business Services, Inc., located in Lewes, Delaware, has just announced it will join many companies nationwide and award all full-time employees with an immediate $1,000 bonus in their next pay check in order to augment their tax savings.

Mike Bell, Vice President and Director of Marketing, announced the bonus, saying, “We appreciate the great job you do, and the dedication you show our clients every day. Keep up the good work.” – Jan. 26 2018, Harvard Business Services, Inc. press release

T.J. Maxx – 3 stores in Delaware – tax reform bonuses, retirement plan contributions, parental leave, enhanced vacation benefits, and 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

Home Depot -- 9 locations in Delaware, bonuses for all hourly employees, up to $1,000.

Lowe's -- 1,000 employees at 10 stores in Delaware. 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.

AT&T -- $1,000 bonuses to 124 Delaware employees; Nationwide, $1 billion increase in capital expenditures.

Cintas Corporation (Seaford, Delaware) -- Bonuses for 38,000 employees; $1,000 bonuses for employees of at least a year, $500 for employees of less than a year.

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

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

Ryder (Delaware location: Wilmington) -- Tax reform bonuses for employees.

Starbucks Coffee Company (Multiple locations in Delaware) – $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 Delaware) – $1,200 bonuses for full-time employees, $500 for part-time employees; nationally, over 28,000 workers will receive a bonus.

Wal-Mart – 9 locations in Delaware -- Walmart employees are receiving tax reform bonuses. Nationally, base wage increase for all hourly employees to $11; bonuses of up to $1,000; expanded maternity and parental leave; $5,000 for adoption expenses.

Wells Fargo – 18 bank locations in Delaware; 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.

Bank of America (Multiple locations in Delaware) -- Delaware-based employees of Bank of America will receive $1,000 bonuses.

Apple (Apple store in Newark, Delaware) -- $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:

Bonuses:

Apple Inc. told employees Wednesday that it’s issuing a bonus of $2,500 worth of restricted stock units, following the introduction of the new U.S. tax law, according to people familiar with the matter.

The iPhone maker will begin issuing stock grants to most employees worldwide in the coming months, said the people, who asked not to be identified because they weren’t authorized to speak publicly. The move comes on the same day Apple said it would bring back most of its cash from overseas and spend $30 billion in the U.S. over the next five years, funding an additional technical support campus, data centers and 20,000 new employees.

Apple confirmed the bonuses in response to a Bloomberg inquiry Wednesday. – Jan. 17 2018, Bloomberg News article excerpt

Capital expenditures, etc:

Apple expects to invest over $30 billion in capital expenditures in the US over the next five years and create over 20,000 new jobs through hiring at existing campuses and opening a new one.

Building on the initial success of the Advanced Manufacturing Fund announced last spring, Apple is increasing the size of the fund from $1 billion to $5 billion. The fund was established to support innovation among American manufacturers and help others establish a presence in the US. It is already backing projects with leading manufacturers in Kentucky and rural Texas.

Apple works with over 9,000 American suppliers — large and small businesses in all 50 states — and each of Apple’s core products relies on parts or materials made in the US or provided by US-based suppliers.

Apple, which has a 40-year history in education, also plans to accelerate its efforts across the US in support of coding education as well as programs focused on Science, Technology, Engineering, Arts and Math (STEAM). – Jan. 17, 2018 Apple press release excerpts

Note: If you know of other Delaware 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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Another Biden Middle Class Tax Hike: Elimination of Your Step-Up in Basis

Posted by John Kartch on Friday, October 23rd, 2020, 5:15 PM PERMALINK Follow @johnkartch

Joe Biden will eliminate step-up in basis and this will impose a steep tax increase and paperwork nightmare for middle class families and small businesses. It is one of the many Biden tax hikes that violate his own pledge against raising any tax on any American making less than $400,000.

In this video, you can see a sample of the many times Biden has threatened to eliminate step-up in basis.

Under the Biden plan, "When someone dies and the asset transfers to an heir, that transfer itself will be a taxable event, and the estate is required to pay taxes on the gains as if they sold the asset,” said Howard Gleckman of the left-leaning Tax Policy Center.

As noted by CNBC:

By taxing the unrealized gain at death, heirs would get hit at the transfer, regardless of whether they sell the asset, Gleckman said.

In Forbes, Robert W. Wood writes of the devastating impact on small businesses:

[Under current law] Everybody gets a stepped-up basis on death, for income taxes. But Biden says maybe no longer. Biden says that'll be gone once he is President. Biden's proposal would tax an asset's unrealized appreciation at transfer. You mean Junior gets taxed whether or not he sells the business? Essentially, yes. The idea that you could build up your small business and escape death tax and income tax to pass it to your kids is on the chopping block. Biden would levy a tax on unrealized appreciation of assets passed on at death. By taxing the unrealized gain at death, heirs would get hit at the transfer, regardless of whether they sell the asset.

In its analysis of Biden's tax plan, Tax Policy Center says the step-up in basis proposal mirrors a proposal described in an Obama-Biden 2016 Treasury Department document. This document confirms that Biden will force a capital gains tax payment immediately upon transfer of an asset after death of a loved one:

Under the proposal, transfers of appreciated property generally would be treated as a sale of the property. The donor or deceased owner of an appreciated asset would realize a capital gain at the time the asset is given or bequeathed to another.

The amount of the gain realized would be the excess of the asset's fair market value on the date of the transfer over the donor's basis in that asset. That gain would be taxable income to the donor in the year the transfer was made, and to the decedent either on the final individual return or on a separate capital gains return.

On top of all that, Biden also vows to impose capital gains tax increases just as America digs out from the pandemic. He said "every single solitary person" will pay capital gains taxes at ordinary income tax rates. He will also double the top rate to 40 percent, highest since Jimmy Carter in 1977.

Click below to see Biden's vow to eliminate stepped-up basis:

Photo Credit: Matt Johnson

Posted by Mary Ann Cortese on Friday, October 23rd, 2020, 11:51 AM PERMALINK

Taiwan President Tsai Ing-Wen seeks to bring forward free trade talks with the U.S. With Taiwan being a long-standing trade partner of America, this big step by Taiwan to strengthen the U.S-Taiwan relationship could potentially create new economic, social and political opportunities for the nation which faces pressure from China.

Taiwan is already a well-established trading partner for the U.S. The country was the 11th largest goods trading partner in 2018 with the U.S. totaling $76.0 billion in two-way trade of goods in 2018 and $18.5 billion in services.

A comprehensive trade deal with Taiwan can offer U.S. companies an alternative to doing business with Beijing, this would be a crucial lifeline in certain sectors. As President Tsai said during a video presentation hosted by the Hudson Institute and Center for American Progress that “the past months have shown us the importance of economic linkages and supply chain security for both Taiwan and the U.S.” and “[Taiwan and the U.S.] must be clear-eyed on how to move forward on an FTA.”

Along with growth in two-way goods trade, an FTA can bring an increase in services trade, especially in FDI which would be a large beneficiary. In her speech, President Tsai called attention to the increased two-way investment flows linking the U.S. and Taiwan, stating that Google and Microsoft have “substantially increased their investments in Taiwan” over the last year. With Taiwan seeking to become a global hub for technology, a FTA with the U.S. can open the county up to deals with large American tech firms. The FTA could set groundbreaking rules on how to deal with SOE, prevent coerced technology transfers, and limit data localization, similar to those in the USMCA.

This was the essence of a coalition letter Property Rights Alliance executive director Lorenzo Montanari signed alongside other conservative groups sent to president Trump. The letter calls on Trump to “look past the way business has been done in the past and take a fresh approach when the U.S. stands to gain. The veto power Beijing has exercised over this issue in the administration's past should be revoked. Nothing about an FTA with Taiwan is incompatible with serviceable, productive relations with China.”

One of the longstanding complaints from the USTR preventing trade negotiations has been Taiwan’s prohibitions on meat from the U.S. entering their market. That barrier is no longer there, as president Tsai announced the easing of restrictions on imports of U.S. pork and beef earlier last month. It was done for national interest but also, in the words of president Tsai “If we can take one crucial step forward on the issue of U.S. pork and beef, it will be an important start for Taiwan-U.S. economic cooperation at all fronts.”

Secretary of State Michael Pompeo said that “this move opens the door for even deeper economic and trade cooperation” and “kudos to president Tsai for her leadership.”

With members of the U.S. Senate believing now is the perfect time to start trade negotiations with Taiwan, a joint letter was sent to U.S. Trade Representative Bob Lighthizer encouraging him to begin the formal process of negotiating a trade agreement with Taiwan. The senators said, “as we look to advance our initiative for a free and open Indo-Pacific, we believe that now is the time to establish trade agreements with like-minded counties in the region.”

With Tsai’s bold response regarding this long-standing issue, the ball now remains in the U. S’s court to start a formal process to institute a free trade agreement with Taiwan. Entering into the negotiation process can help advance America’s strategic vision for a free and open Indo-Pacific region, as well as strengthen the U.S economic partnership with Taiwan.

Photo Credit: Daniel M. Shih

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Posted by Mike Palicz on Thursday, October 22nd, 2020, 3:45 PM PERMALINK Follow @Mike_Palicz

Senate Energy and Natural Resources Chairwoman Lisa Murkowski (R-Alaska) said a carbon tax "is worth putting on the table" during a panel discussion yesterday with Senator Sheldon Whitehouse (D-RI) sponsored by the Stanford Institute for Economic Policy Research.

"I know that a price on carbon is one that makes Republicans more than a little bit nervous," continued Murkowski. "But I do think that can be and that should be one of the options that is on the table for discussion, in terms of how you can move policies forward," she said.

Sen. Murkowski is correct to note that carbon taxes, which raise the cost of gasoline and household energy bills, face significant political opposition as voters have a well-established track of rejecting carbon taxes on the ballot.

Last Congress, 229 House Republicans voted in favor of an anti-carbon tax resolution. In 2019, a coalition of 90 conservative and free-market organizations penned a letter to Congress opposing any form of a carbon tax. Sen. Murkowski’s support for a carbon tax would make her the only Republican in the Senate on record backing such a tax.

Even the panel moderator noted he was “struck” that Sen. Murkowski “in a state where oil and gas production is so critical, was willing to look closely at carbon pricing.”

Sen. Murkowski’s call for a carbon tax is indeed shocking given that roughly 85% of Alaska’s state budget is funded from oil revenues.

When pressed by the event’s moderator to explain how her plan would deal with low-income Americans facing higher energy costs, Murkowski suggested using the generated revenue for wealth redistribution. “As you know there have been proposals if there is a price, how you can rebate that to individuals, how you can help with transition assistance. These are the types of policies, and discussions, that must be had,” said Murkowski.

Translation: Murkowski suggests using the revenue generated from a carbon tax to send apology checks to poor Americans for raising their energy costs.

Sen. Murkowski’s comments seem to reference carbon tax and rebate legislation pushed by progressive advocacy groups like Climate Leadership Council and Citizens’ Climate Lobby. According to a recent study from the Tax Foundation, a commonly proposed carbon tax and rebate plan (starting at $50 per metric ton) would raise taxes by $1.87 trillion over ten years, kill 421,000 jobs and reduce GDP by 0.4 percent.

Americans for Tax Reform urges Sen. Murkowski to take carbon taxes completely off the table and instead focus on policies that reduce energy costs for American consumers rather than add to their burden.

Photo Credit: Senator Lisa Murkowski - Energy and Natural Resources Committee

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T-C-I is a Massive T-A-X that Would Crush Pennsylvania Families

Posted by John Kartch on Thursday, October 22nd, 2020, 12:33 PM PERMALINK Follow @johnkartch

Joe Biden said he will re-impose the Obamacare individual mandate tax if he is elected. Most households liable for this tax made less than $50,000 per year.

According to IRS data, Biden's individual mandate tax would hit roughly 353,000 households in Florida and 153,000 households in Pennsylvania. (See the full list of state figures at bottom).

The Tax Cuts and Jobs Act signed by President Trump zeroed out the $695-$2,085 Biden-Obama individual mandate tax.

But Biden has already vowed to re-impose the individual mandate tax. Here's his exchange with CNN on July 5, 2019:

CNN's Chris Cuomo: "Would you bring back the individual mandate?"

Joe Biden: "Yes. Yes, I'd bring back the individual mandate."

See for yourself by watching the clip below:

According to official IRS data for the 2017 tax year, 74% of households liable for the individual mandate tax had an adjusted gross income of less than $50,000.

The individual mandate tax penalty was paid by 4,606,271 households.
3,430,003 of these households had an adjusted gross income of less than $50,000.

Biden has some explaining to do, as he made a promise to every American making less than $400,000 per year that they would not see a single penny of ANY tax hike. This Biden tax will hit middle class households in every state and every congressional district.

IRS data below shows the number of households per state hit with this tax in just one year, 2017. This data serves as an approximation of how many households will be hit under Biden's individual mandate tax.

SWING STATES:

Pennsylvania 153,140 households
Florida    353,210 households
Minnesota 69,460 households
Wisconsin 80,240 households
Michigan 132,750 households
Ohio 132,140 households
North Carolina    141,730 households
Arizona     107,360 households
Colorado     98,160 households
Georgia 142,930 households
Nevada 52,130 households

ALL 50 STATES:

Alabama    41,960 households
Alaska 13,370 households
Arizona     107,360 households
Arkansas     41,130 households
California    553,000 households
Colorado     98,160 households
Connecticut 45,200 households
Delaware 11,230 households
District of Columbia 5,170 households
Florida    353,210 households
Georgia 142,930 households
Hawaii    10,890 households
Idaho 31,460 households
Illinois 162,920 households
Indiana 106,750 households
Iowa 38,430 households
Kansas    40,480 households
Kentucky 54,310 households
Louisiana 64,330 households
Maine   25,460 households
Maryland 64,180 households
Massachusetts 89,050 households
Michigan 132,750 households
Minnesota 69,460 households
Mississippi 32,260 households
Missouri 80,990 households
Montana 19,770 households
Nebraska    30,930 households
Nevada 52,130 households
New Hampshire 23,610 households
New Jersey 124,430 households
New Mexico 25,500 households
New York 260,660 households
North Carolina    141,730 households
North Dakota 11,970 households
Ohio 132,140 households
Oklahoma    54,720 households
Oregon     70,010 households
Pennsylvania 153,140 households
Rhode Island   14,840 households
South Carolina 64,440 households
South Dakota    11,190 households
Tennessee 83,440 households
Texas 559,420 households
Utah 49,470 households
Vermont 10,920 households
Virginia 107,130 households
Washington 110,400 households
West Virginia 22,820 households
Wisconsin 80,240 households
Wyoming 11,090 households

Keep track of Biden's many tax hikes by visiting www.ATR.org/HighTaxJoe

Biden Wants to Raise U.S. Corporate Tax Rate Higher Than Communist China

Posted by Miriam Roff, Sheridan Nolen on Wednesday, October 21st, 2020, 3:36 PM PERMALINK

The fate of Illinois’ constitutionally mandated flat tax lies in the hand of voters, who will decide on Nov. 3, 2020 whether or not to adopt the Proposed Amendment to the 1970 Illinois Constitution— also known as the “fair tax” amendment or the “Illinois Allow for Graduated Income Tax Amendment.”

A NO vote would uphold the state’s current 4.95% flat income tax rate. A YES vote would open the door for significant state income tax hike, with the top rate rising to 7.99%.

By voting YES, voters will eliminate the only safeguard Illinois taxpayers have against income tax hikes, the flat tax— allowing Governor J.B. Pritzker and the Democrat-controlled state legislature to impose some of the highest tax rates in the nation with little or no recourse. If the measure is approved, on January 1, 2021 Illinois would move from a flat 4.95% income tax to new six bracket system with rates ranging from 4.75% to 7.99%, resulting in a $3.7 billion income tax increase.

It’s important to note that although the new rates and brackets, as passed by the Democrat-led legislature under SB 687 in 2019, are separate from the proposed constitutional amendment, this $3.7 billion income tax hike is completely dependent upon voters permitting a graduated-rate income tax structure.

Proponents of the progressive tax amendment are selling it as the be-all-end-all solution for ending the state’s infamous budgetary woes, claiming SB 687 will actually lower taxes for 97 percent of Illinois residents. The former is a flat out lie, whereas the latter is barely even a half truth.

If the amendment is approved, it’s true that Illinois taxpayers with up to $100,000 in income would see their marginal tax rate drop from 4.95% to 4.75% or 4.90% depending on their income level. However, the expected $3.7 billion in new revenue raised off the backs of the rest of the populace would barely make a dent in Illinois’ whopping $226 billion deficit.

Further, the proposed amendment does not contain language that limits the amount of tax brackets state lawmakers can create or how high they can raise taxes. The graduated income tax measure also provides zero accountability measures on how the new money will be spent and fails to address years of runaway spending. Keep in mind the Governor has promised over $10 billion in new spending despite the state being broke. Odds are any tax relief for middle and lower-income families would be short-lived.

According to research conducted by Americans for Tax Reform, government spending has ballooned over the last decade. In fact, Illinois had the nation’s second highest increase in spending per capita, rising 29.30%, between 2010 and 2018. During this time, Illinois raised the state income tax twice to fund this out-of-control spending. Further, just last year state lawmakers hit taxpayers with 20 new tax increases including the doubling of the gas tax, vehicle registration fee hikes, and the increase of online sales taxes. Even with all these tax increases the state still had an $8 billion budget deficit and an unfunded pension liability over $137 billion prior to the Covid-19 pandemic.

As the Illinois Policy Institute points out, for Democratic lawmakers to fully finance all of the Governor’s campaign promises and plug budget holes, a typical middle-class family could end up paying $3,500 more in income taxes. Even Gov. Pritzker admits that “there’s certainly no guarantees” that the amendment would protect middle and lower-income Illinoisans from future tax hikes.

The governor’s claim that there’s certainly no guarantees is correct. Take, for instance, Connecticut—the one state that has swapped out its flat income tax for a progressive income tax in the last 30 years. Nutmeg State lawmakers touted the progressive income tax as a way to fix state finances, address inequality, and promised spending restraint. However, that’s not what happened. It instead, cost the state’s economy over $10 billion, 360,000 jobs, and middle class families have seen their income tax rates climb over 13% and their property tax burden increase by more than 35% since 1999—the year that the personal income tax was first collected. As a result of these failed policies, Connecticut dons the 6th highest outmigration rate in the nation.

If voters need another reason to reject a progressive income tax structure with the higher rates set by SB 687, it’s worth remembering that it would kill jobs and small businesses by imposing the second-highest business tax rate in the nation. Under the Governor’s Fair Tax Plan, the corporate tax rate would rise from 7% to 7.99%, and when you take into account the 2.5% replacement tax already imposed on Illinois corporations, the total taxable rate is 10.49%. In 2018, the U.S. Bureau of Labor Statistics reported that Illinois’ private sector job growth ranked 46th out of 50 states. With the coronavirus pandemic looming over the heads of local businesses, many of which are on the brink of bankruptcy, the proposed Illinois income tax hike would exacerbate the financial hardships of a dilapidated economy.

A study conducted by the University of Illinois indicated that the state of can expect more than half a million full-time job losses and tens of billions of dollars in lost income over the next year as a result of the novel coronavirus. Illinois had already lost a record 850,000 residents over the last decade. By instituting another financial requirement on employers, this would be the last straw for thousands of small businesses and large employers, driving them to leave the state.

Giving Illinois lawmakers a blank check to spend billions of taxpayer dollars however they please will not provide a different outcome this time. The only way to address the state’s financial crisis is by reining in/reforming government spending in a way that taxpayers can afford. If taxpayers in Illinois truly wish to take a stand for fiscal responsibility and accountability, they should vote ‘NO’ on the graduated income tax amendment this November.

Photo Credit: Alan Cleaver

Posted by Alex Hendrie on Wednesday, October 21st, 2020, 11:57 AM PERMALINK

ATR has released a new video highlighting free market opposition to efforts to impose price controls on medical innovation and seniors in Medicare.

The video, narrated by ATR President Grover Norquist, highlights the coalition of 80 conservative, free market, libertarian groups, and activists that oppose the “most favored nation (MFN)" executive order to tie the prices we pay for medicines to foreign, socialist healthcare systems.

Foreign countries have been free riding off American medical innovation for decades through crushing price controls and other market-distorting government rules and regulations.

If we adopt these same price controls, we will do significant harm to the healthcare system. Studies have shown that countries with price controls have access to fewer innovative cures leading to healthcare shortages.

For instance, 290 new medical substances were launched worldwide between 2011 and 2018. While Americans had access to over 90 percent of these medicines, countries with price controls had limited access – the United Kingdom had access to only 60 percent of these medicines, Japan had 50 percent, and Canada had just 44 percent.

Implementing price controls through an MFN will also threaten the ability of our country to continue recovering from COVID-19. The U.S. is the best in the world when it comes to developing innovative, lifesaving, and life preserving medicines. Because of this, the U.S. is leading the way when it comes to developing COVID-19 vaccines, with several promising candidates entering the final stages of testing and clinical trials.

In addition, price controls could harm the U.S. economy. Medical innovation directly or indirectly supports 4 million jobs and $1.1 trillion in total economic impact, including jobs in every state. These jobs will be threatened by price control schemes like the MFN.

Rather than imposing price controls, lawmakers and President Trump should adopt a deregulatory, market-based approach that allows free market innovation to flourish. Moving forward, we should look to policy proposals that promote medical innovation and the development of new cures and reject efforts to impose price controls on the American healthcare system.

The full video can be found here:

Photo Credit: Wellness GM

Posted by Matt Owens on Tuesday, October 20th, 2020, 1:08 PM PERMALINK

Misguided tax hikes on vaping threaten public health in Oregon and Colorado. Both states have upcoming ballot measures which would increase taxes on cigarettes and vaping, even though Public Health England and the Royal College of Physicians have concluded that e-cigarettes are at least 95% less harmful than cigarettes.

Oregon Measure 108 places the option on the ballot for voters to decide on a tax hike which would raise rates from 1.33$ per 20 pack of cigarettes to 3.33$. As it applies to E-Cigarettes, the ballot measure, if passed, would impose a tax at a rate of 65 percent of the wholesale sales price for the product. Cigars would also be effected by this ballot measure by increasing taxes from $0.50 to 1.00$ per cigar, this would raise the tax rate to 65 percent, which is its wholesale sales price cap.

The revenue generated from this ballot measure would go to funding multiple health programs for the state. From 2008 to 2018 nine other ballot measures had been offered by states for a tobacco tax increase. The ballot measures in the past had all been defeated by voters; except Proposition 6 in California during 2016.

Colorado Proposition EE is another ballot measure tax hike. In Colorado cigarettes are currently taxed at a rate of 84 cents per pack. The ballot measure would set up an incremental schedule to increase the tax rate for cigarettes to 1.80$ per pack by July 2027. This would result in a 2.64$ tax rate per pack overall. For cigars, the ballot measure would incrementally raise the tax rate from 20 percent to 22 percent by July 2027. E-Cigarettes are currently not taxed in Colorado. This ballot measure would create a new tax for E-Cigarettes starting at 30 of percent manufactures list price in 2021, and incrementally increase to 62 percent of manufactures list price by July 2027. Most of the revenue from these new taxes will be geared towards education funding but, a sizable portion will also be directed towards the general fund.

These taxes make life-saving vape products more expensive and less accessible, and risk jobs and businesses as small vape shops will suffer. Meanwhile cigarette tax revenue is notoriously unreliable. Colorado and Oregon voters will have to consider the many downsides of these tax hikes as they head to the polls.

Photo Credit: Bonnie Moreland

Posted by Isabelle Morales on Tuesday, October 20th, 2020, 1:00 PM PERMALINK Follow @isabellealiciaa

Under Joe Biden's tax hikes, many households and small businesses will end up paying a top marginal tax rate above 60 percent.

Biden has vowed to steeply raise personal income taxes and impose an additional 12.4 percent payroll tax (along with a doubling of the capital gains rate to 40 percent). New York state has an 8.82 percent income tax and New York City takes another 3.876 percent

Referring to the combined Biden-NY-NYC tax burden on Monday, the rapper 50 Cent tweeted, "62% are you out of ya [expletive] mind."

50 Cent, or Curtis James Jackson III, was born in Queens, New York City and raised in its South Jamaica neighborhood. His mom Sabrina dealt drugs to get by, and raised Curtis until he was eight years old. She tragically died in a fire, leaving Curtis to be raised by his grandmother.

At the time, the area was one of the toughest neighborhoods in New York. 50 Cent described how, in this environment, people had two options: welfare or hustling. From the time he was 12 years old, 50 Cent internalized these options and became a hustler. His love for rapping began in a friend's basement and, in 2002, his music career took off.

Despite having believed that he was bound to a lifestyle of welfare dependency or hustling, 50 Cent found his own way out, and broke the cycle of poverty and crime that he thought were his only options. It's no surprise that he doesn't take kindly to Joe Biden and New York politicians who want to take 62 cents of any dollar of earnings.

"50 Cent speaks the truth when he says no one should have 62% of any dollar they earned taken by government. 50 Cent speaks not just for rappers but for millions of small businessmen and women who would be hit by the high tax rates threatened by Biden and New York," said Grover Norquist, president of Americans for Tax Reform.

Check out ATR's compilation of Biden tax hike statements at www.atr.org/HighTaxJoe

Photo Credit: TigerDirect.com

Posted by John Kartch, Isabelle Morales on Tuesday, October 20th, 2020, 11:20 AM PERMALINK Follow @johnkartch, isabellealiciaa

Iowa has been a Right to Work state since 1947. But that will come to an end under Joe Biden, Kamala Harris, and Theresa Greenfield (D).

As seen on video and in writing, Biden and Harris vow to ban Right to Work laws which protect 166 million Americans in 27 states, more than half the U.S. population. Right to Work laws allow workers the freedom of employment without forced membership in a labor union or forced payment to a union boss.

Joe Biden said: "We should change the federal law [so] that there is no Right to Work allowed anywhere in the country. For real. Not a joke. Not a joke."

Kamala Harris said: "Banning Right to Work laws. That needs to happen."

Click here or below to watch Kamala Harris and Joe Biden vow to abolish Right to Work:

Harris and Biden also documented their anti-Right to Work position in writing here and here. And both have endorsed active legislation called the PRO Act which bans Right to Work. The PRO Act legislation is live ammunition, having already passed the Democrat-run U.S. House of Representatives. In the Senate, it has 40 Democrat co-sponsors and one self-described socialist co-sponsor, Bernie Sanders.

As stated in her op-ed in the Globe Gazette, Theresa Greenfield, the Iowa Democratic Senate candidate, endorses the PRO Act as well, meaning Iowa would lose its Right to Work status.

Right to Work states outperform non-Right to Work states:

Right to Work states experience stronger growth in the number of people employed, growth in manufacturing employment, and growth in the private sector. According to the National Institute for Labor Relations Research, the percentage growth in the number of people employed between 2007-2017 in Right to Work states was 8.8%, and 4.2% in forced-unionism states. Growth in manufacturing employment between 2012-2017 in Right to Work states was 5.5%, and 1.7% in forced-unionism states. The percentage growth in the private sector from 2007-2017 in Right to Work states was 13.0%, and 10.1% in forced-unionism states.

Right to Work laws increase individual life satisfaction and economic sentiment. A study by Christos Makridis of the Massachusetts Institute of Technology (MIT) found that Right to Work laws are associated with an increase in self-reported current life satisfaction, expected future life satisfaction, and sentiments about current and future economic activity among workers, as Forbes describes. The study explains that "these improvements in well-being are consistent with an increase in competition among unions, which prompts them to provide higher quality services that are valued by their members." As the Heritage Foundation explains, "It was no accident that foreign automobile brands located their U.S. plants primarily in right-to-work states like Alabama, Mississippi, and Tennessee."

Forced-unionism states experience severe out-migration. An analysis by Stan Greer of the National Institute for Labor Relations Research found that forced unionism states, between 2007-2017, experience net migration of -7.4%, whereas Right to Work states experience a 1.6% growth in number of residents.

Right to Work laws protect workers from union corruption. The Detroit Free Press reported that U.S. Department of Labor documents showed embezzlement from hundreds of union offices across the country over the past decade. In the past two years, "more than 300 union locations have discovered theft, often resulting in more than one person charged in each instance." Workers should not be forced to fund entities that have high instances of theft and corruption, especially when there are no similar demands that citizens must directly fund a private organization.

Consider yourself warned: If Democrats win full control of the federal government, Iowa's Right to Work will be gone overnight.

"No one should have to pay someone for the right to have a job. Forced union dues were recognized as wrong when congress passed the Taft-Hartley Act of 1947," said Grover Norquist, president of Americans for Tax Reform. "Everyone in a free country has the right to work without being asked to pay off union bosses."

The 27 Right to Work states are: Florida, Wisconsin, Michigan, Iowa, Arizona, Georgia, North Carolina, South Carolina, Virginia, Texas, Tennessee, Indiana, Kentucky, Nevada, Oklahoma, Nebraska, South Dakota, North Dakota, Wyoming, West Virginia, Mississippi, Alabama, Louisiana, Arkansas, Idaho, Utah, Kansas.