New Jersey Examples of Tax Reform Good News
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.
New Jersey Families See Increased Tax Simplification and Tax Reduction. Americans at every income level have seen significant tax reduction. 90 percent of families and individuals are seeing increased take-home pay across the country. There are numerous reforms in the bill that benefit taxpayers in New Jersey and across the country:
- The Tax Cuts and Jobs Act doubled the child tax credit from $1,000 to $2,000 per child. 563,170 New Jersey families took the Child Tax Credit in 2015.
- The Tax Cuts and Jobs Act doubled the standard deduction for an individual from $6,000 to $12,000 and for a family from $12,000 to $24,000. 2,574,770 New Jersey families and individuals took the standard deduction in 2015.
- The Tax Cuts and Jobs Act raised the threshold of the Alternative Minimum Tax so fewer taxpayers are forced to comply with the provision. 279,740 New Jersey families paid the Alternative Minimum Tax in 2015.
New Jersey Middle Class Families See Increased Take-Home Pay. In 2018, New Jersey taxpayers will see average tax reduction of $1,490 and around 6 in 10 New Jersey taxpayers see an average federal tax cut of $2,740.
- 90 percent of New Jersey taxpayers with annual income of between $48,300 and $77,300 will see an average federal tax cut of $930 in 2018.
- 84 percent of New Jersey taxpayers with annual income between $77,300 and $135,800 will see an average federal tax cut of $1,390 in 2018.
- 80 percent of New Jersey taxpayers with annual income between $135,800 and $314,500 will see an average federal tax cut of $3,070 in 2018.
New Jersey Families See Relief From the Individual Mandate Tax Penalty. Obamacare imposed a tax penalty of $695 for an individual and $2,085 for a family of four for failing to buy “qualifying” health insurance as defined by the federal government. The Tax Cuts and Jobs Act repeals this unfair tax.
The individual mandate tax penalty is one of the most regressive taxes in the code as it disproportionately impacts low and middle-income families:
- 188,570 New Jersey individuals and families paid a total of $93,342,000 in individual mandate tax penalties in 2015.
- 37.56 percent of New Jersey taxpayers (70,830 households) that paid the individual mandate made less than $25,000 in annual income.
- 77.91 percent of New Jersey taxpayers (146,910 households) that paid the individual mandate made less than $50,000 in annual income.
Tax Reform Benefits Businesses and Workers in New Jersey. The Tax Cuts and Jobs Act reduced the federal corporate tax rate to 21 percent and established a 20 percent small business deduction. Businesses across the state have responded by announcing pay raises, bonuses, 401(k) match increases, and expansions. For example:
- Tingley Rubber Corporation – based in Piscataway, New Jersey - announced one-time bonuses of $1,000 because of the recent tax reform passed by Congress.
- Quest Diagnostics Incorporated – based in Secaucus, New Jersey – has announced bonuses of up to $500 for 40,000 employees.
- Amicus Therapeutics – based in Cranbury, New Jersey – will build a $200 million facility in the U.S. instead of Europe because of tax reform. The factory will produce a new drug designed to treat Pompe, a rare, fatal disease. The facility will employ at least 200 people with an average salary of $100,000.
- Lowe’s – (5,000 employees at 39 stores and two distribution centers in New Jersey). Employees will receive bonuses of up to $1,000 based on length of service, expanded benefits and maternity/parental leave, and $5,000 of adoption assistance.
- Amboy Bank – based in Old Bridge, New Jersey – is increasing its employee base wage to $15 per hour and giving $1,000 bonuses for non-executive employees.
New Jersey companies of all sizes give powerful testimonials to the power of tax reform:
Metallix (Shrewsbury, New Jersey) - Employee bonuses, investing in business growth:
First order of business? Giving each of Metallix’s 98 workers a $1,000 bonus, an unexpected surprise that came just days after tax reform took effect.
“From the outset, the company wanted to share the benefits of tax reform with our employees,” said Maria Piastre, president of Metallix. “On February 14, every employee received a net $1,000 after-tax bonus in response to tax reform. Coming so soon after our usual end-of-year bonuses, it was completely unexpected by Metallix employees, and we were all very happy to receive it.”
Metallix wasn’t shy about tying these bonuses directly to tax reform. Each employee also received a letter from Metallix owner Eric Leiner, who explained that tax reform was going to mean a big boost to the company—and that he wanted to make sure employees were receiving their share of the good fortune. Metallix employees clearly took this sentiment to heart.
Piastre said that, months after the bonuses were given out, many employees still had Leiner’s letter hung proudly at their desks.
Piastre also explained that Metallix was using some of the benefits of tax reform to grow their business—and that significant investments were now more feasible because the company’s taxes had been so substantially lowered. - August 2, 2018, National Association of Manufacturers article excerpt
Atlantic City Electric (Atlantic City, New Jersey) - The utility will pass along tax cut savings to customers:
Atlantic City Electric will provide $23 million in annual tax savings to its customers. The company made a filing this month with the New Jersey Board of Public Utilities, which was approved on March 26, 2018. Customers will begin to see reductions on their bills around April 1, 2018. - April 3, 2018, Exelon Utilities press release excerpt
Honeywell (Morris Plains, New Jersey) – increased 401(k) match:
“I am confident in Honeywell’s future, and our ability to continue to deliver for our shareowners and our employees. Our strong performance in 2017, together with the enactment of new U.S. tax legislation, has enabled us to increase our 401(k) match in the U.S. This is a sustained, annual benefit that will provide a more secure retirement for our employees. We believe that enhancing this benefit is extremely valuable and important to our employees over the long term,” Adamczyk concluded.—Jan. 26 2018, Honeywell press release
Flemington Car & Truck Family of Brands (Flemington, New Jersey) -- $500 employee bonuses:
The new tax reform law is giving some benefits to New Jerseyans. The Flemington Car and Truck Country Family of Brands, a new and used car dealership in Flemington, is awarding each of its full-time employees a $500 bonus because of the recently passed federal Tax Cuts and Jobs Act.
As a result of the corporate tax rate cut under the new law to 21 percent from 35 percent, the company will also look to upgrade its facility and hire additional workers. The dealership is 41 years old and has 17 brands in eight different locations.
“We believe this is the right thing to do,” said company chairman Steve Kalafer, in a written statement. “Reinvesting tax savings in our employees and our businesses will make our communities and America stronger. We call on all of the auto manufacturers we work with to help drive economic growth by giving back to the communities where they employ and invest with appropriate employee bonuses and by creating new jobs with their new capacity for additional capital expenditures.” – Jan. 8, 2018 NJ Biz article excerpt
Quest Diagnostics Incorporated (Secaucus, New Jersey) -- Bonuses of up to $500 for 40,000 employees:
Tax Reform Benefit
In 2018 the company expects to realize approximately $180 million in tax savings on an adjusted basis. Of this amount, the company plans to reinvest roughly $75 million before tax back into the business and its employees, resulting in a benefit of approximately $120 million to net earnings. Investment initiatives include:
-Advanced diagnostics innovation through new tests and high-touch concierge services;
-Investments to deliver a consistently excellent consumer experience both online through the MyQuest mobile patient application and patient service centers; and
-A bonus of up to $500 for nearly 40,000 employees to be paid based on the company's performance in 2018. -- Feb. 1 2018, Quest Diagnostics Incorporated press release
New Jersey American Water (Swedesboro, New Jersey) – The utility will pass along tax cut savings to customers:
New Jersey American Water customers also recently had a rate decrease as a result of the Tax Cuts and Jobs Act. On April 1, 2018, most customer water rates were reduced by 5.9 percent (and 2.3 percent for former Shorelands Water Company customers). The water bill for the average residential customer using 6,000 gallons a month decreased approximately $3.36 per month ($1.00 per month for former Shorelands customers), and the average residential wastewater bill decreased between $1.49 and $5.81 per month, depending on service area.
The BPU is continuing their review of the overall impact of the new tax act, and further rate adjustments are anticipated in the coming months. – May 11, 2018, BusinessWire article excerpt
Merck (Kenilworth, New Jersey) -- Bonuses (details to be announced); increased charitable donations; increased capital expenditures:
“The recently enacted U.S. tax legislation improves Merck’s financial flexibility to invest in sustainable long-term value creating opportunities. In addition to the company’s ongoing investment in R&D, business development and continued support of the dividend, as well as share repurchases, the company also:
- Plans to invest approximately $12 billion over 5 years in capital projects including approximately $8 billion in the United States
- Made a contribution to the Merck Foundation in the fourth quarter of 2017
- Plans to provide a one-time, long-term incentive award for its eligible non-executive employees in the second quarter of 2018” – Feb. 2 2018, Merck press release
Tingley Rubber Company (Piscataway, New Jersey) -- $1,000 bonuses:
New Jersey based Tingley Rubber Corporation will be issuing all U.S. based employees one-time bonuses of $1,000 because of the recent tax reform passed by Congress.
Tingley’s ownership announced Thursday its plans to share some of the tax benefit directly with their employees to express the company's gratitude. The 122-year-old, fifth generation family owned business joins many businesses across the country in giving employee bonuses after Congress passed a sweeping tax cut for businesses and individuals.
President Donald Trump signed a bill on December 22nd overhauling the nation's tax code. One of the biggest changes included in the bill cuts the corporate tax rate from 35 percent to 21 percent for qualifying corporations. The bill also restructures and lowers the seven personal income tax brackets.
Based in Piscataway, NJ the privately held Tingley Rubber Corporation announced the bonuses during an employee luncheon held on March 22nd. The $1,000 bonuses will also be eligible for the company’s 401(k) plan deferral with the standard corporate match.
"The economic development that should come as a direct result of the new tax reform legislation and deregulations will positively affect Tingley’s ability to grow its business. The tax reform package will allow Tingley to invest more into our strategic initiatives, and better serve our customers, as well as our employees and shareholders," said Owner and Chairman of the Board, Bruce McCollum. Bruce’s son and owner JB McCollum said "We are excited for the opportunity to reward our dedicated and hard-working employees with this special bonus as a token of our gratitude."
President & COO, Mike Zedalis, expressed his gratitude to the McCollum family and sees the new tax plan as a major boost to Tingley: “Our company continues to grow, and enhanced investment into our operations will always bring benefits to our customers, employees and shareholders.”
Tingley Rubber Corporation is a leading supplier of protective footwear and clothing and has been protecting generations of workers since 1896. -- March 26, 2018 Tingley Rubber Corporation press release
Public Service Enterprise Group (Newark, New Jersey) – the utility will pass along tax reform savings to customers:
Public Service Electric and Gas Co. (PSE&G) today proposed to lower customer bills by approximately 2 percent on April 1 to pass on the benefits of the federal tax reform legislation enacted earlier this year.
In its filing with the NJ Board of Public Utilities, PSE&G will reduce rates by approximately $114 million on an annual basis effective April 1 to reflect lower federal taxes the utility will pay. The typical residential combined electric and gas customer will save nearly $41 per year. – March 2, 2018, PSE&G Press Release
Amicus Therapeutics (Cranbury, New Jersey) – In order to find a cure for a rare disease, the company is building a $200 million facility in the United States instead of overseas. The facility will employ at least 200 people who will earn an average of over $100,000 per year:
Specialty drugmaker Amicus Therapeutics, Inc. has decided to spend as much as $200 million on a new production facility in the U.S. instead of Europe.
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At Amicus Therapeutics, the new tax law solved a geographic dilemma. The Cranbury, N.J., company is developing an experimental drug to treat Pompe disease, a rare inherited disorder that causes muscle weakness and can be fatal.
After early results for a new drug proved promising, Amicus wanted to increase production for further clinical testing and potential commercial sales.
Amicus, which has been using Chinese contract manufacturer WuXi Biologics to supply the drug, decided in August to build its own facility. The U.S. was at a disadvantage to Europe, due to its 35% statutory federal income-tax rate for companies. Ireland’s corporate tax rate, by contrast, is 12.5%.
Those financial considerations threatened to overshadow other advantages that a U.S. plant would offer, including the ease with which company officials could visit it, and the availability of talented workers in some regions.
“Our strong assumption was that it would be very challenging to establish a new bio-manufacturing facility in the U.S.,” Chief Executive John Crowley said in an interview.
As the tax legislation advanced in Congress last fall, however, building in the U.S. began to look more attractive. On Dec. 21, a day after Congress passed the final measure, which lowered the statutory corporate rate to 21%, Mr. Crowley recommended to his board the company focus on finding a U.S. site. The company has narrowed its choice to three East Coast cities Mr. Crowley declined to identify, and expects to decide in the next month or two. It expects the plant to cost $150 million to $200 million, and to employ at least 200 people at an average pay of $100,000 a year.
“With the changes in the tax law, it now makes the U.S. competitive with these geographies we’re looking at,” he said. – Jan. 26, 2018 Wall Street Journal article excerpt
Somerset Savings Bank (Bound Brook, New Jersey) -- $750 bonuses for employees excluding senior management:
Somerset Savings Bank announced today that, following the enactment of the new federal tax reform legislation, it will distribute a special cash bonus to its employees. Every employee, excluding senior management, will receive a one-time $750 bonus. – Jan. 23, 2018 Somerset Savings Bank press release
OceanFirst Financial Corp. (Toms River, New Jersey) – base wage increase to $15 per hour:
OceanFirst Financial Corp. (NASDAQ:OCFC) the holding company for OceanFirst Bank, today announced a commitment to increase the Bank's minimum hourly pay rate to $15.00 within 30 days of the enactment of the Tax Cuts and Jobs Act which has been approved by Congress and is expected to be signed into law in the near future." -- Dec. 22, 2017 OceanFirst Financial Corp. press release
Advanced Sciences and Technologies, LLC (Berlin, New Jersey) – increased 401(k) match for employees.
Unity Bank (Clinton, New Jersey) – all 200 non-executive employees will receive a $750 bonus:
In response to Congressional approval of tax reform legislation, Unity Bancorp, Inc. (NASDAQ:UNTY), parent company of Unity Bank, announced today that its Board of Directors has elected to provide all employees excluding executive management with a one-time $750 bonus.
“The bank’s Board and executive management felt strongly that the anticipated benefit of the corporate tax rate reduction should be shared with our employees,” said Unity Bank President & CEO James A. Hughes. “Unity’s employees constantly demonstrate their commitment to our customers and the community, not only in their work responsibilities, but by donating their personal time and resources to benefit those in need. We foster an entrepreneurial culture at Unity where the employees and bank can grow together and this decision fits perfectly with that philosophy.”
The corporate tax rate in the recently passed legislation will drop from 35% to 21%. Unity Bank intends to pay the bonuses to its approximately 200 employees in January. – Dec. 26, 2017 Unity Bancorp Inc. press release
Amboy Bank (Old Bridge, New Jersey) – Base wage raised to $15 per hour; $1,000 bonuses for non-executive employees:
The New Jersey Bankers Association said Amboy Bank was "sharing the benefits of the recent tax reform."
"They are joining the growing group of banks across New Jersey and the country that are rewarding employees with increased wages, special bonuses and enhanced benefits programs as well as increased funding for charitable giving," president and CEO John E. McWeeney, Jr. said in a statement. – Feb. 8, 2018 NJ Advance Media article excerpt
Apple (There are 12 Apple stores in New Jersey: Atlantic City, Bridgewater, Cherry Hill, Edison, Freehold, Lawrence Township, Marlton, Paramus, Rockaway, Short Hills, Wayne, Woodcliff Lake) -- $2,500 employee bonuses in the form of restricted stock units; nationally, $30 billion in additional capital expenditures.
Johnson & Johnson (New Brunswick, New Jersey) – New investments due to tax reform – details will be released in April.
“Now regarding tax reform, what we said from the very beginning is that one of the major reasons, in addition to lowering the rate, is just frankly the flexibility that it provides us, and we think it actually helps make us more competitive, particularly on an international level if we happen to be in a competitive situation with other companies because now we have greater flexibility on how we can access that cash. So we think net-net, it's a positive for us. As you heard Dominic [J&J CFO] mention earlier, regarding the more immediate tax reform impact, we think that the -- the wise thing to do is to invest a good portion of that back into R&D. If you look over the past several years, the output, the productivity, particularly in our pharmaceutical pipeline, but also in others of our investments in R&D, we think, have been at the high end. And we think ultimately doing that, we'll have the greatest impact on our business, will help us get out to better serve underserved needs around the globe, and that's where we're heading in that direction.” – CEO Alex Gorsky
"We are pleased by the final passage of the U.S. tax cuts and jobs act.” – CFO Dominic Caruso
Bank of America (Multiple locations in New Jersey) -- New Jersey-based employees of Bank of America will receive $1,000 bonuses.
Cintas Corporation (Multiple locations in New Jersey) -- $1,000 bonuses for employees of at least a year, $500 bonuses for employees of less than a year.
Chipotle Mexican Grill (Multiple locations in New Jersey) – Bonuses ranging from $250 to $1,000; increased employee benefits; nationally, $50 million investment in existing restaurants.
Comcast (Multiple locations in New Jersey) -- $1,000 bonuses; nationally, at least $50 billion investment in infrastructure in next five years.
Home Depot -- 72 locations in New Jersey, bonuses for all hourly employees, up to $1,000
Lowe's -- 5,000 employees at 39 stores and two distribution centers in New Jersey. 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.
Ryder (13 locations in New Jersey) – Tax reform bonuses for employees.
Starbucks Coffee Company (Multiple locations in New Jersey) – $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.
T.J. Maxx – 39 stores in New Jersey – 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
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A one-time, discretionary bonus to eligible, non-bonus-plan Associates, globally
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An incremental contribution to the Company’s defined contribution retirement plans for eligible Associates in the U.S. and internationally
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Instituting paid parental leave for eligible Associates in the U.S.
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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
U-Haul (Multiple locations in New Jersey) – $1,200 bonuses for full-time employees, $500 for part-time employees.
Wal-Mart – 63 locations in New Jersey -- 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 – 279 locations in New Jersey; raised base wage from $13.50 to $15.00 per hour; nationally, $400 million in charitable donations for 2018; $100 million increased capital investment over the next three years.
Note: If you know of other New Jersey 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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New Study Confirms the Obvious: PFC Hike Would Raise Airline Ticket Prices.
Last week, Congress released a new study on airport infrastructure funding. The study in part focuses on the impact of the Passenger Facility Charge (PFC) – a government-imposed fee 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.
The study comes as Congress is expected to consider raising the PFC in the coming weeks. As taxes and fees already account for over 20% of the cost of a domestic airline ticket, Congress should be focused on reducing this burden placed upon consumers rather than adding to it. Americans for Tax Reform has continuously opposed efforts to raise the PFC and urges lawmakers to reject any effort to raise the cap on the PFC.
Key findings from the study:
- Raising the PFC cap will increase ticket prices for airline travelers - The study concludes that “an increase in the PFC cap would likely result in higher ticket prices for passengers traveling through airports that raised their PFC collections.” This finding is in line with a past study conducted by the Government Accountability Office which also concluded raising the PFC cap would increases ticket prices, causing “reduced passenger demand” that “could also marginally slow passenger growth and therefore the growth in revenues to the Airport and Airway Trust Fund (AATF).”
- Inflation is an invalid argument to raise the PFC – The authors of the study note that although inflation has caused the purchasing power of a dollar of PFC revenues to erode, aggregate PFC revenues have grown to outpace inflation. Here is the finding straight from the report:
“It is important to note that increases in the number of airports that charge a PFC, the number of airports that charge the maximum allowable PFC of $4.50, and the number of passengers at these airports have resulted in the inflation-adjusted value of total PFC collections increasing over time despite declines in the value of a single passenger’s PFC.”
Translation: airports collectively have greater purchasing power from their total PFC collections in 2018 than they did in 2000, the last time the PFC cap was raised.
- No evidence the PFC promotes competition between airlines – Proponents of raising the PFC cap often claim a higher PFC would promote competition between airlines as projects funded from PFC revenues don’t require the same sign-off from airlines that alternative funding sources necessitate, thus handing more control over airport expansion decisions back to airports. Airports, the argument goes, would then be less beholden to large airlines benefiting from restrictive leases of gates and other essential facilities.
However, it remains unclear that there is any data backing up this pro-competition assertion from those advocating for a PFC hike. The authors of the study point out that they are “not aware of any analysis that estimates the effect of PFCs on competition or prices at airports or city markets.”
In fact, reality has proven the PFC to have the opposite effect, adding an additional barrier for smaller airline companies who operate under an ultra-low-cost business model. These smaller airlines have the most price-sensitive customers with a high demand-elasticity in reaction to price-increases. Higher ticket fees hit them hardest. This explains why ultra-low-cost carriers such as Spirit Airlines have testified in Congress against raising the PFC.
This argument against raising the PFC is only bolstered by the fact that the study’s authors concluded their analysis “cannot determine whether an individual PFC project affects competition and prices.” However, the study did find that “any effects of individual PFC projects are, on average, small relative to other factors, such as local economic conditions and airline hubbing decisions,” and that “no single PFC project is likely to significantly alter the competitive landscape in an individual market.” While PFC funded projects are unlikely to alter competition, the higher ticket prices caused by fee hikes will disproportionately impact smaller airlines, thus damaging competition between airline companies.
Despite these findings, the authors of study recommend raising the PFC and do so with no compelling reason offered.
While recommending that the PFC cap be raised from $4.50 per enplanement to $7.44 for passengers – a staggering 65% fee hike – the authors state, “We are not aware of compelling evidence or data justifying a particular level for a new cap. Any number could be chosen, but we note that if the $4.50 cap had been indexed to inflation in 2000 using the Producer Price Index for construction materials, it would now be set at $7.44.”
Despite completely debunking the inflation argument in their own study (as outlined above in key findings) the authors almost comically conclude that the PFC should be raised anyway. Rather than laying out a case justifying such a drastic fee hike for American travels, the authors just throw their hands in the air and highlight that this is what the cap would be had Congress initially pegged the PFC to inflation, which lawmakers at the time deliberately chose not to do.
Americans for Tax Reform urges lawmakers to reject this recommendation from the authors of the study and to protect American travelers and consumers from inflated ticket prices resulting from even more government taxes and fees. After all, as the authors themselves states, there is no “compelling evidence or data” justifying a hike to the PFC.
Photo Credit: Eric Salard
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Podcast: How Big City Transit Messes Get Passed to All Taxpayers
Heritage Foundation's David Ditch joins the podcast to discuss the boondoggles & union giveaways driving up mass transit project costs - and why all American taxpayers need to pay attention.
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MI Task Force Recommendations Offer Promise for Overcrowded, Costly Jails
The Michigan Joint Task Force on Jail and Pretrial Incarceration released long-awaited recommendations last week to reform the state’s overcrowded jails. Michigan’s jail populations have rapidly gone up, a sign of a system that is not delivering the public safety, justice, and efficiency that people deserve.
In 2017, taxpayers spent an estimated $478 million on county jails. It’s not just that high costs are unaffordable for taxpayers, but they are a warning sign that too many people are being jailed, often for bad reasons, and reform is needed.
The data-driven recommendations from the Joint Task Force on Jail and Pretrial Incarceration offer an extensive set of reforms needed to create the more efficient, effective, and affordable jails that Michigan communities deserve.
The reforms include:
Ending the practice of suspending driver’s licenses for offenses that aren’t related to safe driving, like owed court debt. Driving without a valid license was the third most common reason for admissions to a correctional facility. Reform in this area would mean people can get to work to pay their fines, and don’t rack up criminal charges and lose the ability to hold a job because of a lack of means.
Decriminalizing low-level traffic misdemeanors. Low level offenses that currently entangle people in the criminal system that pose no risk to the community can be better handled by traffic courts.
Taking into account one’s ability to pay when imposing fines. Fines are meant to be a punishment first, not a revenue raising tool. It makes sense to limit the amount of fines to something an offender can reasonably be expected to pay. Imposing an exorbitant fine that an offender can never reasonably pay ties them to the criminal justice system in perpetuity as they deal with
Diversion for behavioral, mental health issues. With addiction driving so many people into jails, diversion that gets people with mental health and addiction issues into programs that can help is a needed reform.
More alternatives to arrest for police officers. Allowing officers to use appearance tickets when arrest and jail are not warranted for the suspected crime is a smart step that empowers police, and avoids pulling people into the jail system unnecessarily.
Caps on jail time for technical parole violations. The possibility of being jailed is important to incentivize people who are on parole to keep up with their obligations. However, that should be weighed against the unintended consequences (losing a job for instance) for otherwise well-behaved parolees.
Defendants must be tried within 18 months of arrest. Ensuring the justice system delivers speedy trials and people are not left in jail for extended periods of time is a win for liberty and safety. Extended jail time can make people more likely to commit future crimes.
Improved data collection. It is vital taxpayers know what is happening in the criminal justice system. Better data collection accomplishes this, and it is also critical to tracking the impact of reforms. If something is not working as anticipated, citizens and legislators should know quickly, and be able to act with confidence.
There are a couple areas that are left to counties that will be important for the counties to implement in the right way. The task force recommends bail reform, with release unless the court determines that a defendant poses a risk to the community, themselves, a flight risk, or has committed certain crimes (violent or against children). Counties will have to ensure effective risk assessment fills in where reliance on cash bail is reduced to ensure public safety is not put at risk.
Michigan residents have every reason to be excited about the task force recommendations. Now, the road to reform turns toward hammering out legislation. ATR looks forward to working with the legislature to ensure the best version of these proposals becomes law.
Photo Credit: Livingston County, MI
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PA Legislators Look to Protect Taxpayers from Reckless Spending
It’s not rocket science, spending drives demand for tax hikes, and the ability to raise taxes fuels spending.
Focusing on the spending side of the ledger, legislators in Pennsylvania have proposed the Taxpayer Protection Act (Senate Bill 116/ House Bill 1316). The bill, sponsored by Senator Camera Bartolotta and Representative Ryan Warner, would limit overall spending increases to the rate of inflation, plus population growth. A supermajority vote could override the limit.
Revenues that come in above the spending cap would first go into the state’s shallow rainy day fund. The state will also need to thoroughly review state programs to ensure spending growth is kept within the TPA index.
This is a great, pro-taxpayer measure for any state, but is especially necessary for Pennsylvania.
The Keystone State has seen its population stagnate, and even shrink in some recent years – losing 260,000 residents in 2016. The state and local tax burden costs residents $4,589 per year. While that is more competitive than some of its eastern neighbors, taxes are still driving people away.
This trend of leaving the state is especially prevalent amongst people aged 20-35. The Pennsylvania Independent Fiscal Office reported that 47,000 people in this age bracket with at least an associate’s degree left the state in 2015.
The good news is that from 2012 to 2017 Pennsylvania’s spending declined relative to state GDP, dropping nearly 20% by that metric, fifth most in the nation. Republican legislators having control of the state purse strings is largely why. Democrat Governor Tom Wolf has certainly pushed for his fair share of bad tax and fiscal policy since taking office in 2015.
Passing the Taxpayer Protection Act now would go a long way to preserving this progress on spending restraint, limiting the ability of future legislatures to waste the public’s money.
Spending restraint is also broadly popular, Republicans, Democrats and independents each reported at least 67% support for the measure, according to Susquehanna Polling & Research.
Now is the perfect time to get the Taxpayer Protection Act done.
Photo Credit: Wikimedia Commons
Buttigieg Lies About Trump Tax Cuts on MSNBC
Pete Buttigieg lied about the Tax Cuts and Jobs Act during an interview on MSNBC's Morning Joe on Wednesday, claiming that its benefits only go to the wealthy and corporations.
"As far as I can tell, the only promise that [Trump] has kept when it comes to economic policy was a giant tax cut for corporations and the wealthy," Buttigieg said.
Buttigieg is wrong, and if he and the Democrats repeal the Tax Cuts and Jobs Act, the following would happen:
- A family of four earning the median income of $73,000 would see a $2,000 tax increase.
- A single parent (with one child) making $41,000 would see a $1,300 tax increase.
- Millions of low and middle-income households would be stuck paying the Obamacare individual mandate tax.
- Utility bills would go up in all 50 states as a direct result of the corporate income tax increase.
- Small employers will face a tax increase due to the repeal of the 20% deduction for small business income.
- The USA would have the highest corporate income tax rate in the developed world, higher than the United Kingdom (19 percent), China (25 percent), Canada (26.8 percent), and Ireland (12.5 percent).
- Taxes would rise in every state and every congressional district.
- The Death Tax would ensnare more families and businesses.
- The AMT would snap back to hit millions of households.
- Millions of households would see their child tax credit cut in half.
- Millions of households would see their standard deduction cut in half, adding to their tax complexity as they are forced to itemize their deductions and deal with the shoebox full of receipts on top of the refrigerator.
In Indiana, where Buttigieg is the mayor of South Bend, households who made the state average income of $55,476, received a tax cut of around $1,438.51, according to a recent Tax Foundation report.
Even left-leaning and establishment media outlets confirm the good news arising from the Tax Cuts and Jobs Act:
- The New York Times flatly stated: "Most people got a tax cut."
- The Washington Post stated: “Most Americans received a tax cut.”
- CNN's Jake Tapper did his own fact check and concluded: "The facts are, most Americans got a tax cut."
- CNN's Jake Tapper also stated: "In fact, estimates from both sides of the political spectrum show that the majority of people in the United States of America did receive a tax cut."
- FactCheck.org stated: "Most people got some kind of tax cut in 2018 as a result of the law."
- FactCheck.org also stated: "The vast majority (82 percent) of middle-income earners — those with income between about $49,000 and $86,000 — received a tax cut that averaged about $1,050.
Buttigieg has also called for a full repeal of the TCJA as part of his "infrastructure" proposal.
If you want to stay up-to-date on threats to raise your taxes, visit www.atr.org/HighTaxDems.
Buttigieg Calls for “Wholesale” Rollback of Trump Tax Cuts
Pete Buttigieg called for a “wholesale” rollback of the Tax Cuts and Jobs Act with a “special focus” on the corporate tax during an interview with the New York Times editorial board.
Here’s the key exchange:
NYT editorial board member: On raising taxes, what are your proposals?
Pete Buttigieg: “So a financial transactions tax, rollback wholesale of the Trump tax cuts with a special focus on what’s going on in the corporate-rate tax cut. Close the 199A loophole, deal with some of the enforcement deficiencies that are driving the big part of the revenue gap right now I think. I’m also open to a wealth tax. I just would not put my signature proposal in a position of being completely dependent on a tax that is constitutionally untested.”
Pete Buttigieg first called on repealing the TCJA as part of his “infrastructure” plan, which according to CNBC, would repeal the entire tax cut.
“His campaign said the plan will be paid for by reforming the capital gains tax and repealing the 2017 GOP tax overhaul, reforms that had been previously disclosed. The campaign will also raise the estate tax, with a top rate of 65% for billionaires,” CNBC reported.
Buttigieg’s promise to repeal the tax cuts is a promise to raise taxes. If the tax cuts were repealed:
-
A family of four earning the median income of $73,000 would see a $2,000 tax increase.
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A single parent (with one child) making $41,000 would see a $1,300 tax increase.
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Millions of low and middle-income households would be stuck paying the Obamacare individual mandate tax.
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Utility bills would go up in all 50 states as a direct result of the corporate income tax increase.
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Small employers will face a tax increase due to the repeal of the 20% deduction for small business income.
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The USA would have the highest corporate income tax rate in the developed world, higher than the United Kingdom (19 percent), China (25 percent), Canada (26.8 percent), and Ireland (12.5 percent).
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Taxes would rise in every state and every congressional district.
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The Death Tax would ensnare more families and businesses.
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The AMT would snap back to hit millions of households.
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Millions of households would see their child tax credit cut in half.
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Millions of households would see their standard deduction cut in half, adding to their tax complexity as they are forced to itemize their deductions and deal with the shoebox full of receipts on top of the refrigerator.
In Indiana, where Buttigieg is the mayor of South Bend, households who made the state average income of $55,476, received a tax cut of around $1,438.51, according to a recent Tax Foundation report.
Even left-leaning and establishment media outlets confirm the good news arising from the Tax Cuts and Jobs Act:
-
The New York Times flatly stated: "Most people got a tax cut."
-
The Washington Post stated: “Most Americans received a tax cut.”
-
CNN's Jake Tapper did his own fact check and concluded: "The facts are, most Americans got a tax cut."
-
CNN's Jake Tapper also stated: "In fact, estimates from both sides of the political spectrum show that the majority of people in the United States of America did receive a tax cut."
-
FactCheck.org stated: "Most people got some kind of tax cut in 2018 as a result of the law."
-
FactCheck.org also stated: "The vast majority (82 percent) of middle-income earners — those with income between about $49,000 and $86,000 — received a tax cut that averaged about $1,050.
If you want to stay up-to-date on their threats to raise taxes, visit www.atr.org/HighTaxDems.
See more:
Buttigieg Would Repeal the Entire Trump Tax Cut
Warren Dodges Private Healthcare Question Three Times During Morning Joe Interview
Biden: “Get Rid of the Trump Tax Cut”
Pete Buttigieg: “We Gotta Roll Back the Trump Tax Cuts for Corporations”
Biden: “Anybody Who Can Throw Coal Into a Furnace Can Learn How To Program”
Warren Contradicts Herself on Medicare for All, Again
Mayor Pete’s “Carbon Tax and Dividend” Will Raise Taxes on Social Security Recipients
Booker Praises Opportunity Zones While Planning to Repeal TCJA Which Created Them
Sanders: “Of Course” Medicare for All Will Cost You Something
Despite Steep Tax Hikes, Biden’s Numbers Don’t Add Up
Biden: Capital Gains Tax Rate “Could Go Higher” Than 40%
Biden on Medicare for All: “You’re Going to Have to Raise Taxes on the Middle Class”
Sanders Senior Adviser: “Yes, We Will Repeal the Trump Tax Scam”
Bloomberg Endorsed a Carbon Tax
Biden to Sanders and Warren: “Let’s Get Realistic” on Trillion Dollar Spending Plans
Booker: I Would Raise the Capital Gains Tax Rate
List of Buttigieg Tax Hike Proposals
2020 Dems: Warren's Medicare for All Will Raise Middle Class Taxes
Warren: Medicare for All Covers Illegal Immigrants
Elizabeth Warren Contradicts Herself on Taxes, Again
Biden: Imagine if I Told Elizabeth Warren ‘You Should Be In a Socialist Primary’
CNN Catches Warren in a Tax Lie
Bernie Sanders: Warren’s Medicare for All Plan Would Have “Very Negative Impact” on Jobs and Wages
Warren’s “Medicare for All” Repeals Trump Tax Cuts
Biden: Warren is "Making it Up" on How She'll Pay for Medicare For All
Biden: “It’s Impossible to pay for Medicare for All without middle class tax increases”
Biden Slams Medicare for All: “It’s Totally Unrealistic and Can’t be Done”
Warren: Two Million Lost Jobs from Medicare for All “Part of the Cost Issue”
Video Showing Every Time Elizabeth Warren Has Dodged the Middle Class Tax Question
Out of touch Biden calls Trump’s $2,000 middle class tax cut “negligible”
Biden Calls for 28% Corporate Tax Rate
Biden: “Every Single Solitary Person” Will Pay 40% Capital Gains Tax
Warren Dodges the Middle Class Tax Question Again
Buttigieg Says He Will Raise Corporate Tax Rate to 35%
Watch: CNN Analyst Gets Visibly Irritated as Warren Dodges Tax Hike Question
Andrew Yang to Elizabeth Warren: Wealth Tax Would Have “Massive Implementation Problems”
Biden on Warren Dodging Middle Class Tax Question: “This is Ridiculous. Absolutely Ridiculous.”
Buttigieg Grills Warren for Dodging the Middle Class Tax Question
Biden: I Will Raise the Capital Gains Tax to 39.5%
Elizabeth Warren Can’t Stop Dodging the Middle Class Tax Question
VIDEO: 17 Times Elizabeth Warren Has Dodged the Middle Class Tax Question
VIDEO: Warren Keeps Dodging the Middle Class Tax Question
Biden: “I’m Gonna Double the Capital Gains Rate to 40%”
Tax Hike Bernie Says He’ll Tax All Income Over $29K
Video: Warren Dodges Middle Class Tax Question Again
Biden Calls for Full Repeal of Trump Tax Cuts
Biden Attacks Warren: "She's Going to Raise People's Taxes”
Video: Media Fed Up with Elizabeth Warren Tax Dodge
Biden: End "Trump's Tax Cut for The Top Tenth of One Percent"
Booker: “My plan would reverse those toxic Trump tax cuts”
Stephen Colbert Calls Out Warren for Dodging Middle Class Tax Question
Video: Warren Dodges MSNBC’s Middle Class Tax Questions
Elizabeth Warren is Still Dodging the Middle Class Tax Question
Video: 2020 Democrats Promise Higher Taxes
Biden Caught Lying about GOP Tax Cuts
Bill De Blasio: “As President, I Would Issue a Robot Tax”
Kamala Harris Calls for Ban on Plastic Straws
Elizabeth Warren's Climate Plan Calls For "Reversing" GOP Tax Cuts
Sanders: We’re Going to “Absolutely” Raise the Corporate Tax Rate
Elizabeth Warren on Corporate Tax Cuts: “I really want to see them rolled back.”
Bill de Blasio Calls for Corporate Tax Rate Hike
Amy Klobuchar: Raise the Corporate Tax Rate to 25%
Biden on capital gains tax: “We should raise the tax back to 39.6 percent”
Kamala Harris Threatens to Repeal GOP Tax Cuts 3 Times in August
Joe Biden: “I’m going to eliminate most all” of GOP Tax Cuts
Cory Booker Calls for Repeal of "Toxic" GOP Tax Cuts
Marianne Williamson Joins Dems Calling for TCJA Repeal
Kamala Admits Her Plan Would End Employer Insurance
“Medicare for All” is a Middle Class Tax Increase, Say Dems
Elizabeth Warren Can’t Dodge the Middle Class Tax Question Forever
Dem Socialized Healthcare Plan Will Lead to Middle Class Tax Hikes
Supposed “Moderate” Democrat John Delaney Wants to Impose Carbon Tax on the American People
Klobuchar Suggests Capital Gains Tax Hike and “Doing Something” About TCJA
VIDEO: 2020 Democrats Will Raise Your Taxes
Kamala Harris Campaign Headquarters Located in Opportunity Zone Created by GOP Tax Cuts
Julian Castro: “We’re going to have to raise taxes.”
Biden and Harris: Raise the Corporate Tax Rate
Biden tweet: Ignore the fact I’ve already called for middle class tax hikes
Kamala Harris: “I Will Reverse” Trump’s Tax Cuts
Kamala Harris Calls for Repeal of Tax Cuts Four Times in Three Minutes
Julian Castro Caught Lying about GOP Tax Cuts
NYT: Bidencare Will be Funded by “rolling back” GOP tax cuts
Kamala Harris: I Will Repeal “That Tax Bill”
Cory Booker: “I do support” Imposing Carbon Tax on Americans
Harris: “We are Going to Repeal That Tax Bill”
Biden: I Will Raise Corporate Tax Rate to 28%
Kamala Harris Continues to Lie about Tax Cuts
Jay Inslee: “Repeal the Trump Tax Cuts”
Biden Running Ads to “Repeal Trump’s Tax Cuts.”
VIDEO: Ten Times Biden Threatened to Repeal Tax Cuts
Here’s what happens if Dems repeal tax cuts
VIDEO: 10 Times 2020 Democrats Have Threatened to Repeal TCJA
Kamala Harris: When I Enter Office "I Will Repeal" the TCJA
Biden: “First thing I would do as President is Eliminate the President’s Tax Cut.”
Bernie Sanders claims people would be “delighted to pay more in taxes”
Biden: Tax Cuts Will be “Gone” If I’m Elected
Kamala Harris: I Will Repeal Tax Cuts “on day one”
Biden again says capital gains tax is “Much too Low”
Biden: Capital gains tax “much too low”
VIDEO: Five Times Biden has Threatened to Repeal Tax Cuts
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: Gage Skidmore/Flickr
Arizona Supreme Court Could Find New Phoenix Uber/Lyft Airport Tax Unconstitutional
Phoenix’s onerous airport ride-sharing fee increase could soon be overturned by the Arizona Supreme Court.
State Representative Nancy Barto (R-Phoenix) asked Attorney General Mark Brnovich (R) to see if it violates a provision of the state Constitution – which was put in place by voters in 2018 – that prohibits both new and increased taxes on service. "It [the new airport ride-sharing fee increase] is such a blatant disregard of the will of Arizona voters who passed Prop. 126 in 2018," said Barto.
General Brnovich wants the court to issue a decision on the constitutionality of this Uber and Lyft fee increase. “Our office will promptly file a special action with the Arizona Supreme Court to strike down Phoenix’s unconstitutional rideshare fee and prevent the ordinance from taking effect,” tweeted General Brnovich.
“This is going to be a long-running fight with greedy politicians who want to tax transportation and take advantage of a monopoly – in this case access to an airport – to raise taxes. The attorney general did the right thing in noting this was unconstitutional. Every state should have constitutional protections against these abuses, but until then we are going to have to be vigilant and fight these tax hikes one after the other. They are coming to an airport near you,” said Grover Norquist, president of Americans for Tax Reform.
The airport ride-sharing fee increase to $4 – a rate that is among the highest in the country – for both pickups and drop-offs at Sky Harbor International Airport is set to take place on February 1 of this year. Adding insult to injury, the fee will increase by 25 cents per year until it reaches $5 in 2024. Under previous law, the airport ride-sharing fee was $2.66 and charged only on pick-ups.
The fee increase was imposed last month by a 7-2 vote of the Phoenix City Council, despite Uber and Lyft saying it would cause them to end their airport services. Councilman Jim Warring and Councilman Sal DiCiccio were the two no votes.
Grover Norquist On California's Latest Attempt to Raise Taxes
ATR president Grover Norquist joined Connell McShane on Fox Business Network's After the Bell to discuss California latest tax hike attempt, which could lead to the nation's highest state corporate income tax rate.
The bill would increase taxes on companies that post at least $10 million of taxable income. The size of the tax increase would be proportional to the pay gap between the CEO and employees. The larger the gap, the larger the tax increase.
Norquist responded:
"It's a massive tax increase. California has an 8.8 percent corporate income tax on top of the 21 percent national, federal tax. They want to take that up to 11 to 15 percent. So it's a massive tax increase to start with. But then they go, "Oh, but we'll hit you even more if you don't pay people the way we want you to."
Boards of Directors are responsible and shareholders are responsible for firing any CEO who overpays himself or herself. It shouldn't be the government's decision to tell you. Sometimes, somebody who's a CEO can be worth a lot of money, sometimes not... If you want to be in the business of setting pay, vote as a shareholder, work in the business of owning part of the company. The people who should care are the people who own it. They don't want to waste money. They don't want to waste millions of dollars on a CEO that's not any good."
California's brutal tax and regulatory environment continues to drive people and companies out of the state. State politicians don't seem to know or care.
ATR Signs Coalition Letter Urging the SEC to Pause the CAT
Americans for Tax Reform signed a coalition letter led by Heritage Action for America encouraging the Securities and Exchange Commission to refrain from implementing the Consolidated Audit Trail.
The CAT National Market System is a database established after the 2010 “Flash Crash”, when the SEC began requiring broker-dealers, trading venues and stock exchanges to report all securities transactions and customer information to a single database this year. The CAT is a Delaware company jointly owned by broker-dealers on a co-equal basis, with the SEC, the Financial Industry Regulatory Authority, and 23 additional self-regulatory agencies having authority to access the database. The Heritage Foundation’s David Burton notes that as many as 3,000 regulatory users may be able to access the database.
ATR joined the coalition letter as we share the concerns of members of Congress, current SEC Commissioner Hester Peirce, and organizations representing private businesses and everyday investors who fear the collection of personal identifiable information leaves the CAT a ripe target for cyber theft, and does little to stamp out fraud within the financial markets.
Additionally, if the CAT is breached by nefarious actors there is little recourse for consumers in terms of who or what entity bears the financial burden of making consumers and companies whole. Without additional consideration of electronic breaches, it could be the consumer or taxpayers who are left picking up the tab.
Photo Credit: Scott S
Pete Buttigieg Confuses Marijuana With Nicotine and Signals He'd Impose Harsher Regulations on Vaping
In Iowa this week, Democrat Pete Buttigieg signaled that if elected, he would place tighter regulations on the nicotine vapor industry, stating that “the burden has to be” on the vapor industry to prove that e-cigarettes and nicotine vapor products are safe, during a town hall in Winterset, Iowa on Monday. He went on to mischaracterize the value and intended purpose of products that are specifically flavored in nature and to blame nicotine products for recent vaping-related illnesses.
Here’s the key exchange:
Voter: “So, in 2019, more than 27% of high school students used an e-cigarette. How would you address this epidemic as it pertains to youth and young people?”
Buttigieg: “So, what we are seeing is e-cigarettes being marketed and sold to young people despite companies telling us otherwise. The way this was marketed and sold to the country is that it can be used for harm reduction. It can get people off smoking combustion cigarettes and into something that might be less dangerous than cigarettes. But that doesn't make them safe in their own right, and that doesn't answer why you would target them for people who aren't smokers at all. And I believe the burden has to be on these companies to demonstrate that they are not causing harm rather than on regulators to demonstrate that they are.
This means taking action on these flavored e-cigarette products that are clearly targeted towards children and making sure that we have a much higher bar for them demonstrating that they're not causing harm because we're seeing all these horrifying cases of people coming to harm because they use this product.
And it is why, whether its specific to e-cigarettes or whether its more generally when it comes to the way that we regulate food and drug and other products in this country that we have regulators who actually believe in protecting consumers rather than being beholden to those whose profits are at stake."
Not only does Buttigieg signal that he would impose rules more onerous than those recently implemented by the Trump administration, but he refused to acknowledge the harm reduction potential of a vast majority of vapor products that adults use to quit smoking which are in fact flavored.
Without evidence or context he asserted that e-cigarettes have caused harm to consumers. In fact, Mayor Pete seemed to purposely confuse the harm being inflicted on consumers by black market and illicit THC marijuana products, which have been identified by the Centers for Disease Control and Prevention as the culprit behind the recent vaping illnesses. Those THC products are generally already illegal in all instances, as opposed to legal nicotine vaping products available in convenience stores, vape shops, and other retail outlets.
Buttigieg’s comments come less than a week after Elizabeth Warren signaled that she would crack down on legal nicotine vaping if elected and on the heels of Joe Biden also suggesting that he would “eliminate” vaping if elected.
“I don't care what it does to a small business person who's selling this stuff. If it is damaging lungs, if it's causing the kind of damage that is said and that studies not been fully done yet. If it turns out that it is that I would eliminate it,” Biden said.
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