How the Republican Tax Cuts Are Helping Pennsylvania

Posted by John Kartch on Wednesday, January 13th, 2021, 8:57 AM PERMALINK Follow @johnkartch

PENNSYLVANIA

24.2% tax cut for Pennsylvanians making between $25k - $50k. Pennsylvania households with adjusted gross income between $25,000 and $50,000 saw their average federal income tax liability drop from $2,425.22 in 2017 to $1,952.19 in 2019, a 24.2% reduction in federal income tax liability.

20.3% tax cut for Pennsylvanians making between $50k - $75k. Pennsylvania households with adjusted gross income between $50,000 and $75,000 saw their average federal income tax liability drop from $5,726.97 in 2017 to $4,758.69 in 2019, a 20.3% reduction in federal income tax liability.

17.4% tax cut for Pennsylvanians making between $75k - $100k. Pennsylvania households with adjusted gross income between $75,000 and $100,000 saw their average federal income tax liability drop from $9,069.15 in 2017 to $67,727.82 in 2019, a 17.4% reduction in federal income tax liability.

Just a 11.8% tax cut for Pennsylvanians making over $1 million. Democrats claim the tax cuts were for “the rich” but as shown by the data, middle income Pennsylvanians saw a significantly greater tax cut than those earning over $1 million. Pennsylvania households earning over $1 million saw their federal income tax liability drop from $848,564.65 in 2017 to $758,977.44 in 2019, a reduction of just 11.8%. Data from the Congressional Budget Office also shows that high-earning Americans pay a greater share of taxes than before the Trump tax cuts. In other words, the tax code actually became more progressive, though you won’t hear Democrats admit it.

The TCJA also contained numerous reforms that benefited Pennsylvania households:

PA households no longer stuck paying the Obamacare mandate tax. The TCJA zeroed out the Obamacare individual mandate tax penalty effective 2019. In 2017, 153,220 Pennsylvania households paid the Obamacare individual mandate tax penalty. 140,780 (91.88%) of taxpayers earned less than $75,000. 124,540 households paid the Obamacare individual mandate tax penalty in 2018. 111,920 (89.87%) of taxpayers earned less than $75,000.

Doubled Standard Deduction. The TCJA doubled the standard deduction from $12,000 to $24,000 for taxpayers filing jointly and $6,000 to $12,000 for single filers. 5,639,150 PA households took the standard deduction in 2018 including 5,468,510 households earning less than $200,000. 5,747,460 taxpayers took the standard deduction in 2019 including 5,557,840 taxpayers earning less than $200,000.

20% tax deduction for ID small businesses. The TCJA created a new, 20% deduction for small businesses organized as passthrough entities (LLCs, sole proprietors, S-corporations, partnerships). 865,280 PA taxpayers claimed the small business deduction in 2019 including 696,340 taxpayers earning less than $200,000. 704,840 taxpayers claimed the small business deduction in 2018 including 576,130 taxpayers earning less than $200,000.

Doubled Child Tax Credit. The TCJA doubled the child tax credit from $1,000 to $2,000. 1,458,700 PA households took the child tax credit in 2019 including 1,331,350 households earning less than $200,000. 1,453,300 households took the child tax credit in 2018 including 1,333,730 households earning less than $200,000.

Pennsylvania is benefiting greatly from the Tax Cuts and Jobs Act enacted by Republicans in 2017:

823,380 Pennsylvania households are benefiting from the TCJA’s doubling of the child tax credit.

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

4,415,920 Pennsylvania 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.

153,140 Pennsylvania 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, Pennsylvania residents are saving money on utility bills. Lower electric, water, and gas bills help households and small businesses operating on tight margins. For example, at least seventeen Pennsylvania utilities reduced their customers' bills (see below).

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

Hudson Facades (Linwood, Pennsylvania) – Pay raises and $3,000 in every factory worker’s 401(k):

"We raised wages, yes,” said Allen Cohen, managing partner of New Hudson Facades, of the approximate 5 percent raise given to employees. “In addition to that, Related Companies [a partner company] has given every factory employee, $3,000 in their 401(k).” – Feb. 20 2018, WHYY article excerpt

Pike County Light & Power Company (Milford, Pennsylvania) - the utility will pass along tax reform savings to customers:

The Pennsylvania Public Utility Commission (PUC) today issued an Order, requiring a “negative surcharge” or monthly credit on customer bills for 17 major electric, natural gas, and water and wastewater utilities, totaling more than $320-million per year. The refunds to consumers are the result of the substantial decrease in federal corporate tax rates and other tax changes under the Tax Cuts and Jobs Act (TCJA) of 2017, which impacted the tax liability of many utilities.

“As economic regulators, it is the Commission’s responsibility to ensure that utility rates are just and reasonable. Further, it is necessary for utility rates to reflect relevant tax expenses,” noted PUC Chairman Gladys M Brown in a statement at today’s public meeting. “I believe this work (by PUC staff) has resulted in an innovative answer by this Commission to effectively flow-through the benefits of the TCJA back to customers.

Public utilities required to begin returning federal tax savings to consumers include Citizens’ Electric Company of Lewisburg, Metropolitan Edison Company, Pennsylvania Electric Company, Pennsylvania Power Company, Pike County Light & Power Company, PPL Electric Utilities Corporation, Wellsboro Electric Company, West Penn Power Company, PECO Energy Company (Gas Division), National Fuel Gas Distribution Corporation, Peoples Gas Company LLC, Peoples Natural Gas Company LLC—Equitable Division, UGI Central Penn Gas Inc., UGI Penn Natural Gas Inc., UGI Utilities, Inc.--Gas Division, Pennsylvania-American Water Company and Pennsylvania-American Water Company—Wastewater. – May 17, 2018, Pennsylvania Public Utilities Commission Press Release

PPL Electric Utilities Corporation (Allentown, Pennsylvania) - the utility will pass along tax reform savings to customers:

Wellsboro Electric Company (Wellsboro, Pennsylvania) - the utility will pass along tax reform savings to customers:

West Penn Power Company (Greensburg, Pennsylvania) - the utility will pass along tax reform savings to customers:

PECO Energy Company (Philadelphia, Pennsylvania) - the utility will pass along tax reform savings to customers:

National Fuel Gas Distribution Corporation (Erie, Pennsylvania) - the utility will pass along tax reform savings to customers:

Peoples Gas Company LLC (Pittsburgh, Pennsylvania) - the utility will pass along tax reform savings to customers:

Peoples Natural Gas Company LLC-Equitable Division (Pittsburgh, Pennsylvania) - the utility will pass along tax reform savings to customers:

UGI Central Penn Gas Inc. (Shippensburg, Pennsylvania) - the utility will pass along tax reform savings to customers:

UGI Penn Natural Gas Inc. (Valley Forge, Pennsylvania) - the utility will pass along tax reform savings to customers:

UGI Utilities Inc. (Valley Forge, Pennsylvania) - the utility will pass along tax reform savings to customers:

Pennsylvania-American Water Company (Hershey, Pennsylvania) - the utility will pass along tax reform savings to customers:

Pennsylvania-American Water Company-Wastewater (Hershey, Pennsylvania) - the utility will pass along tax reform savings to customers:

Citizens’ Electric Company of Lewisburg (Lewisburg, Pennsylvania) – the utility will pass along tax reform savings to customers:

Metropolitan Edison Company (Akron, Ohio) – The utility is passing along tax savings to customers:

The Pennsylvania Public Utility Commission (PUC) today issued an Order, requiring a “negative surcharge” or monthly credit on customer bills for 17 major electric, natural gas, and water and wastewater utilities, totaling more than $320-million per year. The refunds to consumers are the result of the substantial decrease in federal corporate tax rates and other tax changes under the Tax Cuts and Jobs Act (TCJA) of 2017, which impacted the tax liability of many utilities.

Public utilities required to begin returning federal tax savings to consumers include Citizens’ Electric Company of Lewisburg, Metropolitan Edison Company, Pennsylvania Electric Company, Pennsylvania Power Company, Pike County Light & Power Company, PPL Electric Utilities Corporation, Wellsboro Electric Company, West Penn Power Company, PECO Energy Company (Gas Division), National Fuel Gas Distribution Corporation, Peoples Gas Company LLC, Peoples Natural Gas Company LLC—Equitable Division, UGI Central Penn Gas Inc., UGI Penn Natural Gas Inc., UGI Utilities, Inc.--Gas Division, Pennsylvania-American Water Company and Pennsylvania-American Water Company—Wastewater. - May 17, 2018 Pennsylvania Public Utility Commission press release

Pennsylvania Electric Company (Akron, Ohio) – The utility is passing along tax savings to customers:

Public utilities required to begin returning federal tax savings to consumers include Citizens’ Electric Company of Lewisburg, Metropolitan Edison Company, Pennsylvania Electric Company, Pennsylvania Power Company, Pike County Light & Power Company, PPL Electric Utilities Corporation, Wellsboro Electric Company, West Penn Power Company, PECO Energy Company (Gas Division), National Fuel Gas Distribution Corporation, Peoples Gas Company LLC, Peoples Natural Gas Company LLC—Equitable Division, UGI Central Penn Gas Inc., UGI Penn Natural Gas Inc., UGI Utilities, Inc.--Gas Division, Pennsylvania-American Water Company and Pennsylvania-American Water Company—Wastewater. - May 17, 2018 Pennsylvania Public Utility Commission press release

Pennsylvania Power Company (Akron, Ohio) – The utility is passing along tax savings to customers:

Public utilities required to begin returning federal tax savings to consumers include Citizens’ Electric Company of Lewisburg, Metropolitan Edison Company, Pennsylvania Electric Company, Pennsylvania Power Company, Pike County Light & Power Company, PPL Electric Utilities Corporation, Wellsboro Electric Company, West Penn Power Company, PECO Energy Company (Gas Division), National Fuel Gas Distribution Corporation, Peoples Gas Company LLC, Peoples Natural Gas Company LLC—Equitable Division, UGI Central Penn Gas Inc., UGI Penn Natural Gas Inc., UGI Utilities, Inc.--Gas Division, Pennsylvania-American Water Company and Pennsylvania-American Water Company—Wastewater. - May 17, 2018 Pennsylvania Public Utility Commission press release

Frontier Railroad Services (Fallowfield Township, Pennsylvania) -- The company is building an office building in an Opportunity Zone created by the Tax Cuts and Jobs Act:

A rail-related company is now making tracks for Alta Vista Business Park.

Frontier Railroad Services LLC has purchased a 4.6-acre lot, according to a news release issued Thursday by Mon Valley Alliance, the nonprofit owner of the 256-acre park in Fallowfield Township. Frontier is a regional railroad construction and maintenance firm that specializes in new track construction and tie and rail changeout.

The company is currently based in New Stanton, but wants to construct its new headquarters in Alta Vista. Plans call for a building that would house corporate offices, a repair and maintenance facility and about 11,000 square feet of operating space. Work is targeted to begin this year and end in 2020.

Frontier plans to have a workforce of 20-plus, with room to expand. MVA said the company had three primary reasons for selecting Alta Vista: its proximity to Interstates 70, 76 and 376; having a shovel-ready site designated as a Keystone Opportunity Zone; and access to an industrial-based workforce.

Frontier is led by chief executive officer Nicholas Scigliano; president and chief operating officer Gregory Susko; vice president and chief financial officer Dennis Stoner Jr.; and chief estimator Scott Sepesky.

"Our company is growing and we have open positions to fill immediately," Sepesky said. "Specifically, we have positions open for laborers, operators and mechanics experienced in railroad construction."

John Easoz, chairman of the MVA board, said in a statement: "We are pleased to welcome a regional asset such as Frontier to Alta Vista. We look forward to working with the company as they continue to grow in this new headquarters, providing jobs and economic activity for our region." -- Feb. 22, 2019 Observer-Reporter article

Guy Chemical Company Inc. (Somerset, Pennsylvania) – Increased bonuses, increased wages, and investments in new equipment – a new forklift, new laboratory furnishings, updated computer equipment, and new software system:

Guy Chemical is increasing bonuses between 25 – 50%, increasing wages and investing in new equipment. So far in 2018 we bought a new forklift, urnished a new laboratory and updated some of our computer equipment. We have also invested in a new ERP software system to run our company. – April 4, 2018 statement to Americans for Tax Reform from Guy Berkebile, President of Guy Chemical Company Inc.

Ellwood Group (Ellwood, Pennsylvania) - Facility expansion:

The tax reform is incentivizing the Ellwood Group to invest $10 million into the plant, including an expansion that will house a massive robot.

Ellwood Group CEO David Barensfeld says 500 people currently work at the plant; 200 of them making military equipment. "Two-thousand-pound capacity to automatically transfer unfinished bombs, so that they can be finished and sent to the Air Force... And, we expect to expand employment by, perhaps, 10 percent in the next short while, because of the increased demand for bombs." - August 9, 2018, YourErie.com article excerpt

H2O Connected (Coatesville, Pennsylvania) -- The business will be relocating to an Opportunity Zone and expanding:

H2O Connected, the first Qualified Opportunity Zone (QOZ) business to open its doors in Chester County, will be relocating in late 2020 into a highly anticipated Qualified Opportunity Zone Real Estate project at 190 West Lincoln Highway in Coatesville, developed by Proudfoot Capital.

This former Lukens Steel advertising and marketing office building, built in 1902, is being repurposed into The nth Innovation Center, which will offer entrepreneurs an environment to grow their companies from concept to commercialization.

Already slated to join H2O Connected is nth Solutions, a product development, business incubation, and manufacturing company located in Exton, PA; BioForce Analytics, a provider of sophisticated motion measurement devices for industry and education applications; and Priority Green, a leader in traffic signal preemption products for emergency vehicles. -- March 13, 2020 Daily Local article

Threadbare Cider & Mead (Pittsburgh, Pennsylvania) -- The distillery was able to save houndreds of thousands of dollars because of the Tax Cuts and Jobs Act, and was also able to hire three new distillers:

The Craft Beverage Modernization and Tax Reform Act reduced the excise tax rate on distilled spirits from $13.50 to $2.70 for the first 100,000 proof gallons per year, with smaller cuts to taxes on beer and wine.

“The tax relief, it’s well into the six figures for us,” said Meredith Meyer Grelli, co-owner at Wigle Distillery and Threadbare Cider & Mead in Pittsburgh. “Every dollar goes back into the business. And I think every small-business owner in the world can relate to that.”

Pittsburgh’s Wigle Whiskey Distillery produces a variety of small-batch whiskeys at its Strip District distillery. The 2017 tax relief allowed the business to immediately hire three distillers, Grelli said.

“It takes a year to train a new distiller, for them to be fully independent, safely operating a still,” she said. “So for every new distiller we bring on, we’re investing a year into them. If this tax relief went away and our taxes did go up 400%, we couldn’t grow our labor force in the same way. And we’d have to be much more careful about how we hired, because it is such a risk.” -- February 1, 2020 Pittsburgh Tribune-Review article

Dollar Bank (Pittsburgh, Pennsylvania) - $2,000 permanent raises for employees making $60,000 or below:

Four months after most banks moved to give employees some of the anticipated savings from the Tax Cuts and Jobs Act, the $8.3 billion-asset Dollar is giving workers with annual salaries at or below $60,000 a $2,000 raise. About 60% of Dollar’s 1,300-person workforce will get raises, Senior Vice President Joseph B. Smith said Monday.

CEO Jim McQuade announced the raises May 2 in an in-house video message. They went into effect May 1. - May 7, 2018, American Banker article excerpt

BrightFarms (Selinsgrove, Pennsylvania) -- The company is building a greenhouse that will grow food year round in an Opportunity Zone created by the Tax Cuts and Jobs Act:

Ground was broken Monday for a greenhouse that will grow food in water.

Abby Prior, BrightFarms vice president of marketing, said the hydroponic greenhouse will use ponds to grow produce year round. Climate control will be key.

"We control the temperature, the humidity and, to some extent, we can control the light," Prior said. "We do use some artificial light and we use shades when we need shade."

Four acres will be developed for growing space with a single acre used for packing, cooling and shipping. Baby greens, salad greens such as spring mix, and herbs will be grown there.

Though it is an indoor operation, the plants may attract insects. They will be controlled without pesticides.

"We use something called integrated pest management," Prior said. "If we have a bug, we bring in another bug that eats or kills that other bug to control the pests in the greenhouse."

Eric Lallum, vice president of construction, said the area off Route 522, west of Selinsgrove, was ideal.

"We look for areas where we can orient the site so the greenhouse faces south," Lallum said. "That gives us the maximum sun, and it is as flat as we can get it."

The produce will be packed on site and ready to market at all Giant Food Stores. An officer with the Carlisle-based food store was glad to hear of the greenhouse's establishment.

"We are very excited," said John Ruane, Giant Food Stores chief merchandising officer. "We've been doing business with BrightFarms for many years. We have a great partnership. This just makes it even more local for us."

The property was designated as a 10-year Keystone Opportunity Zone, which Lallum called an incentive. Low-interest loans offered by the state also are being pursued. -- May 22, 2019 The News-Item article

Jefferson-Werner LLC (Bethlehem, Pennsylvania) -- The developer is building an apartment complex in an Opportunity Zone created by the Tax Cuts and Jobs Act:

It looks like Bethlehem's crumbling Boyd Theatre has screened its final movie.

Fans of the city's last cinema house hoped the charming theater might be saved when developer Charles C. Jefferson bought the property in January 2016 for $1.35 million. But, alas, it looks like the water-logged building is beyond saving.

Bethlehem Mayor Bob Donchez confirmed the developer plans to tear down the theater and build apartments there.

Jefferson told Lehigh Valley Business on Tuesday that he plans to demolish the theater to make way for a $22 million, 120-unit apartment project with lower-level retail by leveraging a federal opportunity zone, a tax incentive written into the new tax law.

Jefferson did not respond to a phone message seeking information on his plans, and emails to him and his company came back as undeliverable.

The opportunity zone designation gives developers of commercial and residential projects breaks on capital gains taxes for investing in economically disadvantaged areas. It is mean to encourage urban investment outside of city centers.

The stretch of East Broad Street where the Boyd sits has long vexed city officials. The decaying properties created a sharp demarcation between the city's restaurant row and Main Street shopping.

"We've been waiting a long time to see redevelopment at the Boyd," city Director of Community and Economic Development Alicia Miller Karner said. "... It is a

critical block to us. It is the bridge between Main Street and a significant residential area." The Boyd was shuttered in 2011 and as it decayed the adjacent storefronts were condemned in 2015. Shortly after, the city declared the property blighted. Donchez has long said retail and housing should be key elements of the redevelopment of the Boyd property.

On Wednesday, Donchez said while it's unfortunate economics mean the Boyd must be torn down, Jefferson is proposing a good project for the city.

"I think that block has a lot of potential," the mayor said. "I think it is underutilized."

Jefferson has shared conceptual designs with the city and the mayor is quite pleased with the proposed mixed use. New housing units downtown will bring more vitality to the city center and the retail will hopefully better link Broad Street to Main Street, Donchez said.

"It makes that block stronger," he said.

Jefferson told Lehigh Valley Business that the entire project could cover 147,800-square-feet with about eight total floors. Two floors would front onto East Broad Street with about eight to the rear, including lower level parking and retail topped with apartments.

"I think there is a tremendous demand for apartments in the downtown," Donchez said. "That's not just Bethlehem, if you look at Allentown and Easton, too."

The developer estimates that construction could start this fall, but no plans have been filed with the city.

At one time, Moravian College was interested in buying and rehabbing the former movie theater into a performance venue, but it abandoned the plans when faced with a $30 million price tag and no major donor to help.

Water damage has long plagued the 1,100-seat Boyd and the buildings surrounding it. The theater closed following heavy rains in May 2011. When the city condemned the property in 2015, officials found an elaborate tarp system along with 50-gallon drums set up in second-floor office space.

The property consists of the theater, which has an orchestra pit and dressing rooms backstage, five storefronts, 10,000 square feet of office space and a onetime nightclub below street level.

Currently, Jefferson's company Jefferson-Werner LLC is working with Lehigh University to renovate the former Lehigh Valley Cold Storage building, 321 Adams St. in South Bethlehem, into 30 market-rate apartments, a retail space and courtyard. The project dubbed Brinker Lofts also sits in one of Bethlehem's opportunity zones. -- February 14, 2019 The Express-Times article

Eric Blumenfeld (Philadelphia, Pennsylvania) -- The developer is building a mixed-use space that will include offices, apartments, and a fitness club in an Opportunity Zone created by the Tax Cuts and Jobs Act:

Developer Eric Blumenfeld is aiming to break ground in July on a 30-story North Broad Street tower with offices, apartments and a fitness club that he hopes cap with digital screens featuring animated versions of the famous mural next door.

Blumenfeld said Wednesday that he was close to finalizing a deal with investors in the $160 million project who will be taking advantage of the Broad and Spring Garden Street site’s location in an “opportunity zone” under the 2017 tax bill.

Under that law, investors in projects within opportunity zones can claim savings on taxes from the sale of assets that have gained in value. Blumenfeld declined to share details about the opportunity zone backing of what he’s calling Mural West before the deal is signed.

The tower, on the northeast corner, would rise beside Blumenfeld’s Mural Lofts apartments, formerly the Thaddeus Stevens School, which is known for the Common Threads mural painted on its side.

It would be Philadelphia’s tallest building outside the city’s central core, as well as the latest — and largest — project in the city to be funded under the opportunity-zone program, which is meant to encourage development in low-income communities.

The project is slated to include about 205 apartments and 68,000 square feet of office space, according to a brochure prepared by brokerage Precision Realty Group to market the proposal’s ground-floor retail spaces.

Blumenfeld said he’s also nearing a deal with the operator of a planned fitness center in the building that would occupy nearly 48,000 square feet over six floors. The fitness complex may include features such as coworking offices and guest rooms for overnight visitor stays, Blumenfeld said.

Similar combinations of amenities can be found at Life Time Fitness Inc.‘s location in Ardmore’s Suburban Square shopping complex and the planned Fitler Club private membership club being built in Aramark Corp.‘s headquarters building at 2400 Market St.

Blumenfeld’s plans for Mural West also call for the tower to be crowned with digital screens playing animated vignettes based on the Common Threads mural.

The effect will be similar to the animation in the 2017 Vincent Van Gogh biographical film Loving Vincent, in which “they take all the figures in his artwork, and they bring it to life,” he said. “I think it’s going to be the most interesting building ever built in Philadelphia.”

Blumenfeld’s other projects in the area include the recently completed Metropolitan Opera House concert venue and the Divine Lorraine apartments. -- April 12, 2019 Philadelphia Inquirer article

Custom Container Solutions (Milton, Pennsylvania) -- The steel container company moved to central Pennsylvania and is creating 100 new jobs in an Opportunity Zone created by the Tax Cuts and Jobs Act:

MILTON, Pa. -- The state has designated an old industrial site in central Pennsylvania as a Keystone Opportunity Zone and now nearly 100 jobs are coming to an old factory that had been shut down.

The plant in Northumberland County has been vacant and collecting dust for the past decade, but starting next year, it will help create almost 100 jobs in central Pennsylvania.

The old manufacturing plant in Milton Industrial Park will be up and running next year. The building has sat vacant since 2008 but will soon be home to Custom Container Solutions, a company that makes steel containers.

"It checks almost every box in our wish list, and so now our team is excited to have closed on the property, and we are moving forward with fitting out the equipment and starting to hire people," said Todd Vonderheid of Custom Container Solutions. -- October 21, 2019 ABC 16 article

Hazelwood Green Development (Pittsburgh, Pennsylvania) -- This Opportunity Zone led to the creation of a 240,000 square foot workspace which has the potential to become a local tech hub, laying the groundwork for Pittsburgh’s jobs of the future.

“One of those success stories, she said, is the nearby Hazelwood Green development, which is located within one of the 68 designated opportunity zones in Allegheny County. Ms. Kelley and U.S. Assistant Secretary of Commerce for Economic Development John Fleming spent Friday morning at the riverfront property, formerly the LTV Coke Works site, which developers and universities say could become a potential local tech hub.

Ms. Kelley said she’s happy to see the development -—including the Mill 19 building that will become a 240,000-square foot workspace — is within an opportunity zone, and will help lay the groundwork for Pittsburgh’s jobs of the future.

"Not only can Mill 19 provide new jobs and opportunities to Hazelwood, but it will also expose an entire community to advanced manufacturing, which was a community born in traditional manufacturing," Ms. Kelley said.” -- November 1, 2019, Pittsburgh Post-Gazette

Spark Therapeutics (Philadelphia, Pennsylvania) -- The company extended their lease in a newly remodeled building located in an Opportunity Zone created by the Tax Cuts and Jobs Act:

Spark Therapeutics Inc. has signed a 12-year lease at 3000 Market St. to expand its Philadelphia presence.

The 58,587-square-foot building is located across from space Spark is taking in the Bulletin Building at 3025 Market St., a 282,709-square-foot structure being redeveloped in University City.

Brandywine Realty Trust (NYSE: BDN) owns both buildings, which sit across from 30th Street Station. The real estate company expects to have the Bulletin Building completed by the third quarter. As for 3000 Market, Brandywine said in a first-quarter conference call with analysts on Thursday that the redevelopment of it into a life sciences building will begin once Pennsylvania lifts a ban on construction projects.

Brandywine CEO Jerry Sweeney announced on the call the signing of a 12-year lease at 3000 Market but declined to disclose the name of the tenant when pressed by analysts. However, he said it was a well-known company in Philadelphia with major corporate credit, in the cell-gene therapy business and already has a presence in University City. “We were delighted to bring them in,” Sweeney said.

A source familiar with the deal confirmed the tenant was Spark. The lease will commence during the third quarter of 2021.

Spark, which was spun out of Children's Hospital of Philadelphia, was acquired last year by Roche for $4.3 billion.

"Spark Therapeutics was founded in Philadelphia, and we intend to grow here," Kevin Giordano, a company spokesman, told the Business Journal. "Spark numbers more than 450 employees, and we have ambitious growth plans to achieve our vision of creating a world where no life is limited by genetic disease. In order to further our investment in Philadelphia and accommodate our expected growth, Spark is working with Roche to assess opportunities to expand our footprint within the city. At this time, we are not commenting further on what space or locations are being considered."

The company is currently headquartered nearby in University City. Spark has said it plans on adding hundreds of new jobs in West Philadelphia.

The idea of converting 3000 Market into a life sciences building was a bit of an experiment for Brandywine but the company was able to move fast, have the real estate company’s development team evaluate it and move ahead with it, Sweeney said. The quick lease up and ability to move ahead with creating the space has prompted Brandywine to consider converting floors in other buildings into life-science space to capture demand.

“There has been no slowdown of activity with life science tenants,” Sweeney said.

The Bulletin Building and 3000 Market are part of Brandywine’s $3.5 billion Schuylkill Yards mixed-use development in University City, which is expected to eventually see 6.9 million square feet of new construction.

The company has queued up what it refers to as its West Tower that will have housing and office space and is working with a Qualified Opportunity Zone equity partner on that project. The building will have 419,000 square feet split between office and apartment space. It will also have 9,000 square feet of retail space and covered parking.

Brandywine also has in design for the development for another life science building and anticipates, conditions permitting, that will start during the first half of next year.

In 2018, Spark received a $2 million grant from the Pennsylvania Department of Community and Economic Development and a $7.5 million grant from the Redevelopment Assistance Capital Program to add 500 new jobs over the next five years.

Spark holds the distinction of being the first company to receive FDA approval for a gene therapy — Luxturna — developed to treat an inherited disorder. The genetic retinal disorder leads to blindness if untreated. -- April 23, 2020 Philadelphia Business Journal article

Iovance (Philadelphia, Pennsylvania) -- The cancer therapy firm is building an office and laboratory complex in an Opportunity Zone created by the Tax Cuts and Jobs Act:

Cancer-therapy firm Iovance Biotherapeutics Inc. plans to open a sprawling office and laboratory complex in South Philadelphia’s Navy Yard complex, adding to the city’s growing clout as a biotechnology research-and-development hub.

Iovance, which specializes in the development and commercialization of cancer immunotherapies using cells known as tumor-infiltrating lymphocytes, will occupy a three-story, 136,000-square-foot building that will span about a block of the Navy Yard’s core business and research park.

The Navy Yard was also chosen because of the tax advantages that come from being within a Keystone Opportunity Zone, which can qualify companies for city and state tax breaks, as well as other financial incentives. -- May 30, 2019 Philadelphia Inquirer article

WinnDevelopment (Jersey City, New Jersey) -- The company announced they are building affordable housing units in an Opportunity Zone created by the Tax Cuts and Jobs Act:

One building was the old Liberty Hotel, built on Baltic Avenue in 1924 and listed in a 1950s “Green Book” of places welcoming to black travelers, one of 27 in Atlantic City.

Another was the old Illinois Avenue School, built in 1906.

The third was once the celebrated Northside YMCA on Arctic Avenue, built in 1927, a community gathering place that knit together the city’s historically thriving black neighborhood.

All three buildings later became affordable housing, and more recently, severely rundown properties described Wednesday by Mayor Frank Gilliam as “dismal, deplorable, subpar.”

“Living in squalor is not something any municipality should have to deal with,” Gilliam said.

But local and state officials announced Wednesday that WinnDevelopment would be acquiring all three properties as part of an opportunity zone investment, substantially rehabilitating the properties, and keeping them affordable housing for the required 30 years and, vice president Brett Meringoff said, beyond. -- May 30, 2019 Philadelphia Inquirer article

Brandywine Realty Trust (Philadelphia, Pennsylvania) -- The company is building a mixed-use space in an Opportunity Zone created by the Tax Cuts and Jobs Act:

Brandywine Realty Trust opened Drexel Square, a $14.3 million park that will serve as the cornerstone of Schuylkill Yards, an ambitious 6.9-million-square-foot mixed-use community under development at the front door of University City.

The 1.3-acre park is the first phase of Schuylkill Yards, which Brandywine is developing in partnership with Drexel University. Its completion sets the tone for what the developer is hoping to accomplish with the project.

“Schuylkill Yards is a large-scale development, but it’s really about changing the existing perception of University City and Philadelphia,” said Jerry Sweeney, CEO of Brandywine Realty Trust, in an interview with the Philadelphia Business Journal.

Drexel Square was built on a dingy surface parking lot that was the first impression of University City for the millions of people who use 30th Street Station each year; in that way, Drexel Square is an initial step to alter perceptions.

The 12,064-square-foot elevated space has 23 redwood trees, raised planter beds and pathways that represent the meridians of the globe, symbolizing the connections Schuylkill Yards aims to create while also serving as ways to navigate the park. The space, which can accommodate 500 people, was designed by West8 and Shop Architects.

“We wanted to create a durable wow effect,” Sweeney said. “We want people to walk out of the train station and say, ‘Wow!’ ”

John Fry, president of Drexel University, said few developers would take what amounts to an extremely valuable piece of property, one that could easily accommodate a 50-story building, and instead create a public space. “It says a lot about our collective vision,” he said.

With the park finished, next up for Schuylkill Yards is the $43.3 million completion of the redevelopment of the former Bulletin building. Spark Therapeutics will occupy office and lab space in that structure and will be fully moved in by the end of the year. The first floor will house 35,000 square feet of retail space and several tenants are under consideration, including a food hall.

The next two projects Brandywine will focus on involve securing anchor tenants to fill one-third of a proposed 800,000-square-foot office tower and constructing a building that will have 325 apartments and creative office space. That second tower could start as early as next year since demand for apartments remains strong, Sweeney said. Longer-range, Brandywine plans to build a 300,000- to 400,000-square-foot life science building. It has partnered with Longfellow Real Estate Partners of Boston on that project.

Schuylkill Yards sits in a Keystone Opportunity Zone as well as a Federal Opportunity Zone, giving tenants tax breaks and another enticement to move into one of its office buildings. While those benefits are attractive, Sweeney said one of the biggest lures is its proximity to 30th Street Station. -- June 11, 2019 Philadelphia Business Journal article

Erie Insurance (Erie, Pennsylvania) – $1,000 bonuses; $1,000 contribution to employees’ 401(k) accounts:

Erie Insurance CEO Tim NeCastro called an all-employee meeting Wednesday to deliver a bit of good news — a few million dollars worth of good news, in fact.

Like many corporations, the company was expected to benefit from the new tax code that President Donald Trump signed into law in December.

NeCastro has announced that the company will share those benefits with its employees by giving a $1,000 cash bonus to permanent full-and part-time employees.

In addition, the company will contribute $1,000 to the account of any employee who has a 401 (k) retirement savings plan. – March 23 2018, Go Erie article excerpt

Comcast (Philadelphia, Pennsylvania) -- $1,000 bonuses to 100,000 employees; at least $50 billion investment in infrastructure in next five years

“Based on the passage of tax reform and the FCC's action on broadband, Brian L. Roberts, Chairman and CEO of Comcast NBCUniversal, announced that the Company would award special $1,000 bonuses to more than one hundred thousand eligible frontline and non-executive employees.” – Comcast press release

1st Summit Bank (Johnstown, Pennsylvania) -- $1,000 bonuses to full-time employees; salary raises; increased charitable donations.

Seokoh Inc. (Scott Township, Pennsylvania) -- A cosmetics company is building a facility in the Pennsylvania town that will create at least 280 jobs, in an Opportunity Zone created by the Tax Cuts and Jobs Act:

A Scott Twp. cosmetics company is expected to soon break ground on a $27.9 million expansion that's estimated to create at least 280 new jobs in the next three years, a township official said Friday.

Carl Ferraro,township administrator, said officials with Seokoh Inc. advised him they want to begin excavation work before winter.

"The excavation end of it is going to be massive," he said. "I expect them to start any day now."

The company, a subsidiary of the integrated cosmetic and pharmaceutical company Kolmar Korea, plans to construct two roughly 200,000-square-foot buildings on property adjacent to its existing factory located on Life Science Drive in the Scott Technology Park.

Gov. Tom Wolf touted the project Friday as an example of the competitive advantage Pennsylvania offers manufacturing companies.

"Our diverse workforce and central location make Pennsylvania a prime place to do business," Wolf said in a press release. "We are pleased to see Seokoh further grow its operations."

The company is a leading contract manufacturer and filler of premium cosmetics and personal care products. It employs about 290 people. In addition to the new facilities, Seokoh will renovate its existing plant and purchase new equipment.

State and local business officials helped entice the firm with several tax breaks, including an extension of Keystone Opportunity Zone benefits that provide temporary relief from certain state and local taxes through 2028. The Lakeland School District and Lackawanna County commissioners approved that extension last year. -- September 21, 2019 The Times-Tribune article

AccuWeather (State College, Pennsylvania) – Tax reform bonuses for all employees. (Approx. 450 – 500 employees):

“The bonuses are possible due to the company's robust financial performance in 2017 and strong confidence in the growing U.S. and global economy now that the Tax Bill has passed.” – Dec. 26, 2017 AccuWeather press release

Erie Downtown Development Corporation (EDDC) (Erie, Pennsylvania) – The EDDC used benefits made possible by the Tax Cuts and Jobs Act to reinvest in their downtown area and attract new businesses:

"The EDDC is actively pursuing additional Downtown real estate for revitalization. It’s working with national investment funds, philanthropic organizations, and urban planning leaders to leverage investment through Opportunity Funds in the Downtown. It’s leveraging existing community-developed plans, including Erie Refocused, Emerge 2040, and the Erie Downtown Master Plan. The EDDC has a four part development strategy for downtown: Acquire and redevelop commercial and residential real estate; attract new businesses, residents & investment; support and enhance the public spaces; and create programming." – November, 2019, Governance Project

Cranston Material Handling Equipment Corp. (McKees Rocks, Pennsylvania) – Because of the Tax Cuts and Jobs Act, the company was able to purchase new equipment, build a new website, and invest in training:

As president of the western Pennsylvania company, Cranston was there to discuss the benefits of the Tax Cuts and Jobs Act for small business. Founded in 1957 and an NFIB member since 1994, Cranston Material Handling Equipment Corporation sells material handling products.

“Like many business owners, I pay quarterly estimated taxes,” Cranston testified. “In order to pay those taxes, I take cash from my company each quarter. Those payments suck my working capital right out of my business quarter after quarter. Under the Tax Cuts and Jobs Act’s new Section 199A, I now qualify for a 20 percent deduction on my pass-through income. In real terms, this means I will be able to keep between $1,200 and $2,500 a quarter in my business that I would otherwise have paid in taxes. The ability to keep $5,000 to $10,000 a year in my company is a big deal to a small business owner like me.”

As of January, Cranston has focused on expanding into a new product line. Cranston will purchase new equipment, invest in training, and build a new website, according to his testimony. He credited the tax act for his better financial position to self-fund this new product.

“I can tell you that my optimism that the economy has a real opportunity to continue improving has dramatically increased,” Cranston testified.

Cranston testified in front of Senate Finance Committee Chairman Orrin Hatch, alongside Douglas Holtz-Eakin, president of the American Action Forum, David Kamin, professor of law at the New York University School of Law, and Rebecca Kysar, professor of law at the Brooklyn Law School.

“The Tax Cuts and Job Act has not only reduced taxes for businesses like mine; it has created an environment where more business owners feel confident to take the cash from the tax savings and invest it back into their businesses,” Cranston told lawmakers. “For these reasons, I believe the Tax Cuts and Job Act is spurring business investment and therefore has set the stage for increased economic growth for years to come.” – April 25, 2018, NFIB article.

Centric Financial Corporation, Inc. (Harrisburg, Pennsylvania) - Increasing employee wages, hiring new staff, investing in new technology, expanding services offered to customers:

With the support of the Bank's board of directors and the corporate tax savings from the Tax Cuts and Jobs Act signed into law on December 22, 2017, Centric Bank President and CEO Patricia (Patti) A. Husic unveiled a suite of bank-wide initiatives to announce post-tax reform benefits to share and reinvest savings with customers, employees, and the community.

Effective July 1, 2018, Centric Bank is committed to:

Increasing salaries of entry-level personnel to $15 per hour, resulting in raises for more than 50 Centric Bank employees in the operations, credit, and branch areas of the Bank and who are on the frontlines of serving customers.
Providing raises to employees who are near entry-level wages, resulting in a 6% increase.
Hiring additional team members in business development and commercial lending to expand upon the positive, pro-growth relationships with small businesses in the Bank's market areas, and meet the increased lending demand from economic optimism and business growth.
4. Investing between $3 and $4 million in technology initiatives over the course of five years, beginning with strategic goals set forth by Centric Bank's Chief Information Officer & Director of Operations. Innovations, expanded customer initiatives, multichannel distribution, digitization, service development, and customer experience personalization will be areas of focus.
5. Expanding the physical footprint of Centric Bank to include additional full-service technologies in our financial centers for these markets over the next 3 to 4 years.

- August 17, 2018, Centric Financial Corporation, Inc. press release

American Bank (Allentown, Pennsylvania) – $1,000 bonuses for 60 employees:

“President and CEO Mark W. Jaindl stated, “Beginning in 2018, we expect to see benefits from the recent tax reform due to lower corporate tax rates. As we celebrate the holiday season and prepare to close out another year of growth at American Bank, the Board of Directors and senior management want to give back to our team members who are directly responsible for our success.”

Mr. Jaindl continued, “We expect the actions taken by Congress and the President will have a material positive impact on growth throughout the country. As a result, we anticipate our hiring efforts will increase in 2018.” – Dec. 22, 2017 American Bank press release

Blair Strip Steel Company (New Castle, Pennsylvania) -- The Tax Cuts and Jobs Act allowed the company to raise wages, hire new people, and buy new equipment.

“I want to thank Mike Kelly for his role in the successful effort to reduce taxes on behalf of the company and it’s employees, said Bruce Kinney, president and CEO of Blair Strip Steel Company. His efforts are a key part of rebuilding and sustaining a healthier manufacturing climate in Pennsylvania and across the United States.” -- August 6, 2018 NAM Shopfloor Blog

Erie Insurance (Erie, Pennsylvania)– The insurance company is investing $50 million in the Opportunity Zone investment fund to support a variety of projects in Erie:

“Erie Insurance CEO Tim Necastro announced the establishment of 50 million dollars to the Opportunity Zone Investment Fund.

The fund is designated to help financially support different projects within a portfolio. One of those projects is the Erie Downtown Development Corporation’s plan for North Park Row.

Erie Insurance is investing 2.6 million dollars into the project to create a Culinary Arts District, Foot hall, Market, and Apartments.

Necastro said money in the Opportunity Fund is considered an investment, not a donation.” – August 19th, 2019, Your Erie

Fairfield Inn & Suites (Slippery Rock, Pennsylvania) (Neema Hospitality Franchise) - New location acquired, renovations

$700,000 investment in renovation and upgrades due to tax reform. - August 3 2018, call with Americans for Tax Reform

Comfort Inn (Mechanicsburg , Pennsylvania) (Neema Hospitality Franchise) - Acquired hotel, renovations:

$400,000 investment in renovation and upgrades due to tax reform - August 3, 2018, phone call with Americans for Tax Reform

Beneficial Bancorp, Inc. (Philadelphia, Pennsylvania) -- base wage raised to $14 per hour; $1,000 bonuses for all AVP Level employees and below; 4.5% employer contribution to 401(k) plans:

Following the passage of H.R. 1 and the anticipated savings from lower future taxes, we announced a special $1,000 bonus paid to over 600 employees and enhanced our medical coverage to our entire employee base. We also evaluated the compensation of our hourly employees and raised our minimum hourly rate to $14.00. -- Feb. 1, 2018 Beneficial Bancorp Inc. press release

Customers Bank (Wyomissing, Pennsylvania) – increased charitable contributions of $1 million:

Customers Bank will also increase its charitable giving by $1 million in 2018, and will continue to invest in its talent, who all already earn at least $15 per hour – a rarity in banking. “By increasing our charitable giving and investing in our talent, we’re investing in the growth of the communities we serve,” said Sidhu. “These tax savings will ensure that we can put more money in the hands of communities, families, and small business owners. We expect that this bill will be positive for growth.” – Jan. 5, 2018 Customers Bank press release

Fidelity Bank (Dunmore, Pennsylvania; not to be confused with Fidelity Investments) – $1,000 bonuses for all full-time employees making less than $100,000; $500,000 in charitable donations:

Fidelity Bank is pleased to announce additional investments in its Bankers and communities made possible by the passing of the recent tax reform bill. Fidelity Bank’s Board of Directors and Executive Management Team have decided to share in the benefits of the lower corporate tax burden by:

Providing a one-time cash payment of $1,000 to all full-time Fidelity Bankers. This bonus was paid to all Fidelity Bankers below $100,000 in annual compensation.
Taking a $500,000 contribution to the newly created Fidelity D & D Charitable Foundation that will support the local philanthropic and community needs. The newly formed and funded foundation creates a sustainable way to give back to the communities Fidelity Bank serves.

“The tax reform law creates an opportunity to reward our most valuable asset, our Bankers, who are working hard each day to serve our clients, building strong relationships in our communities, and creating long term shareholder value. The Fidelity Bankers put forth perfect effort to position Fidelity Bank as the best bank,” said Daniel J. Santaniello, President & Chief Executive Officer. -- Jan. 2 2018, Fidelity Bank press release

Kraft Heinz Company (Pittsburgh, Pennsylvania and Chicago, Illinois) – $1.3 billion pre-funding of post-retirement benefit plans; $800 million in capital expenditures; $300 million in strategic investments:

“Since the HR-1 Tax Cuts and Jobs Act was signed into law, we have already taken actions and are accelerating key business initiatives. This includes approximately $300 million in strategic investments to build our capabilities, our people skills and our brands; more than $800 million in capital expenditures to improve quality, safety and capacity; as well as $1.3 billion to pre-fund our post-retirement benefit plans.” – Feb. 16 Kraft Heinz statement by David Knopf, CFO

F.N.B. Corporation (Pittsburgh, Pennsylvania) – extra 401(k) contributions to employees totaling $1 million; base wage raised to $15 per hour; increased charitable donations:

F.N.B. Corporation (NYSE:FNB) today announced a significant financial commitment to both its employees and the communities it serves relating to the signing of the Tax Cuts and Jobs Act of 2017.

As an investment in its workforce, FNB plans to raise the minimum hourly wage for its employees to $15 by the end of 2019, accelerating an ongoing initiative to elevate hourly wages. Paying competitive wages will continue to be a focus for the Company in attracting and retaining the highest caliber employees to serve customers, which translates into strong financial performance and benefit to its shareholders. FNB will also provide a discretionary, one-time 401(k) contribution, totaling $1 million, to the vast majority of employees based upon analysis of compensation levels and eligibility.

During the first half of 2017, FNB also made a $5 million contribution to its Foundation, which was established to provide grants for a variety of non-profit entities throughout its multi-state footprint. Moving forward, these funds will be utilized to support causes within its service area. This contribution was also part of a broader community benefit plan focusing on charitable giving, community development investments and lending efforts serving financially-vulnerable and historically underserved populations.

“We are pleased that the current tax law changes present the opportunity for substantial benefits for our clients, employees, communities and shareholders,” said Vincent J. Delie, Jr., Chairman, President and Chief Executive Officer of F.N.B. Corporation. “Increased investment in our employees and in improving the quality of life within our communities creates an enhanced experience for our clients and superior long-term shareholder returns.” – Jan. 18, 2018 F.N.B. Corporation press release

Almo Corporation (Philadelphia, Pennsylvania) – $1,000 incremental bonus, capital improvement, and purchasing a new operating system:

Almo, the Philadelphia-based appliance, CE, housewares and pro A/V distributor, is investing its savings from the Trump administration’s new tax legislation in its employees and infrastructure.

President/CEO Warren Chaiken said Almo’s newly lowered tax structure will allow it to reward its employees with an incremental bonus of $1,000, as “they are the greatest asset we have to offer as a business.”

The capital improvements include:

a new 300,000-square-foot distribution center in Philadelphia to cover the Mid-Atlantic region, plus warehouse relocations in Nevada and Ohio to larger facilities;

an ongoing headquarters renovation that includes a reconfigured first floor and a new 7,000-square-foot second floor that can accommodate 65 additional employees;

a new central office in Ft. Lauderdale for the company’s global operations and hospitality and new business groups; and

a new, larger headquarters office in Baltimore for the Almo Professional A/V division that will allow for expansion and growth. -- March 9 2018, Twice article excerpt

Sewickley Spa (Sewickley, Pennsylvania ) -- Pay raises; increased capital expenditures:

For the past decade, Sewickley Spa’s 13 employees didn’t receive annual raises.

With economic pressures forcing cuts at the business since the Great Recession of 2007-09, owner Dorothy Andreas said she couldn’t afford pay hikes — though she still managed to provide a bonus every Christmas.

But on Dec. 20 — the day Congress gave final approval to the Tax Cuts and Jobs Act — Ms. Andreas decided to “pull the trigger” on raises of 2 percent to 5 percent and bonuses that averaged 2.5 percent.

“My staff needed a morale booster,” said Ms. Andreas. She welcomes the federal tax changes because she expects them to translate to savings she can pump back into spending for new equipment and at least two more employees.

In recent years, her luxury spa — which offers massages, facials, and other salon treatments for men and women — has delayed investments in things like updated computer systems and pedicure chairs.

“I just want to put it all back into my company,” she said. “It feels like the government wants to see small business succeed and it’s like a breath of fresh air into a very stale climate.” -- Feb. 5 2018, Pittsburgh Post-Gazette article excerpt

Fulton Financial Corporation (Lancaster, Pennsylvania) – base wage raised to $12 per hour; bonuses in the form of an additional week of pay for 75% of the 3,700 employees; $2 million in increased charitable donations:

Fulton Financial Corporation (NASDAQ: FULT) (“Fulton”) announced today that during 2018, it will invest an additional $2 million in the communities it serves as part of its Fulton Forward initiative; and the company will raise the minimum wage paid to employees in addition to providing an additional week of pay at year-end to employees who do not participate in an incentive plan.

“At Fulton, we understand that our future is connected to the communities where we operate and the employees who serve them,” said E. Philip Wenger, Chairman and CEO of Fulton Financial. “It makes sense for us to share the benefits of tax reform, and we’re very pleased to be able to give back to our communities and employees.”

As a result of the recently enacted Tax Cuts and Jobs Act of 2017, Fulton will commit an additional $2 million as part of its Fulton Forward Initiative, which broadly supports communities across the company’s footprint. The initiative was designed to support underserved communities to create affordable housing, provide financial literacy and education programs, and to accelerate economic development.

In addition to expanding its community support, Fulton also will raise its minimum wage to $12 per hour. The company also plans to provide an additional week of pay in 2018 to employees, who are not participants in other variable-award plans. It is expected that 75% of Fulton’s approximately 3,700 employees will receive this additional week of pay.

“Giving is a cornerstone of our culture, and we already provide thousands of volunteer hours and millions of dollars of existing support to community organizations,” said Wenger. “I am thrilled that our communities and employees will benefit from the savings we will realize from the changes in our corporate tax rate.” – Jan. 18, 2018 Fulton Financial Corporation press release

ISI Financial Group (Lancaster, Pennsylvania) -- $2,000 bonuses for all employees:

At year ahead staff planning meeting in January I proudly announced to all of our staff that because of the new tax law, that ISI is happy to share the tax savings and will providing to all staff members a $2000 bonus.

When announced, the staff were all taken back, very surprised and EXTREMELY grateful.This welcome tax cut for ISI Financial Group and most other companies and individuals is a welcome and prudent step toward freeing up capital for all of us to invest into our economy and great country. I, Tim Decker, personally challenge other companies to share this gift with their employees as well. – Tim Decker, President and CEO

Sundance Vacations (Wilkes-Barre, Pennsylvania) -- $125,000 in employee tax reform bonuses:

"Sundance Vacations announced a decision to award bonuses to its employees based on the GOP tax reform bill that was recently signed into law by President Trump. Sundance Vacations president John Dowd cited two tax reform factors that he believes will positively impact company profits. “Additional take home pay for many Americans will likely lead to robust vacation sales for the company this year,” projects Dowd. “And the ability to deduct some business expenses upfront rather than depreciate them over multiple years will be a major factor for company profitability.” Sundance Vacations decided to award individual bonuses to staff members similar to corporate giants like Apple and AT&T. The immediate bonuses are in addition to the reduction in tax withholding that Americans will benefit from beginning in February. The Sundance bonuses will total over $125,000. Hundreds of other companies are also issuing bonuses nationwide which Dowd believes will inject more spending into the US economy.

Congressman Barletta commented, “The results have been clear that our tax plan will provide more opportunity for all Americans. Businesses will invest in workers and equipment, generating the historic growth that has been dormant in our nation for far too long. Americans will keep more of their paychecks, allowing them to pay bills, save for their children’s education or pay off lingering bills. I am very excited for companies in Pennsylvania like Sundance Vacations as they award bonuses because of our tax plan. The future is very bright for Pennsylvania.” – Jan. 30 2018, Sundance Vacations press release

Glass & Sons Collision Center (Reading, Pennsylvania) – $1,000 tax reform bonuses to employees.

NexTier Bank (Butler, Pennsylvania) – $1,000 bonuses for all employees; tuition reimbursement on job training; wage raises for hourly employees:

NexTier Bank, N.A. (“NexTier”), today announced an investment in its workforce with a one-time bonus of $1,000 for all employees as a result of the tax reform bill passed by the U.S. Congress and signed by President Trump. This is in addition to annual bonuses paid in late 2017.

“Our employees are the key to our success and we are pleased to share this tax savings with our team. NexTier’s employees work hard to meet the needs of our customers, build relationships, and give back to the communities we serve. It’s an honor to reward them for their efforts,” stated CEO, Clem Rosenberger.

In addition to this one-time payout, NexTier is committed to providing educational and career advancement opportunities to employees on an ongoing basis with educational benefits such as tuition reimbursement, internal training, and a variety of industry training opportunities. NexTier will also make adjustments to the wages of hourly employees throughout the year.

“The tax reform bill not only allows us to invest in our employees, but to accelerate lending to small businesses, increase hiring, and enhance our charitable giving. It’s a win-win,” continued Rosenberger. “We fully expect to see significant growth, not only as a company, but throughout the local and national economy as a result of this historic legislation.” – Jan. 12, 2018 NexTier Bank press release

Noah Bank (Elkins Park, Pennsylvania) – $1,500 cash bonus to employees:

Noah Bank, a Pennsylvania-chartered community bank, has announced today that its Board of Directors has elected to provide all employees with a one-time $1,500 cash bonus thanks to the passage of new tax legislation.

CEO Edward E. Shin stated, "We are pleased to have the opportunity to reward employees with salary increases and bonuses thanks to these tax cuts. We are proud of our dedicated and enthusiastic employees who have made Noah Bank a success." Mr. Shin added that, "The new legislation will continue to benefit Noah Bank, our employees, our shareholders, and our customers as we progress and grow."

Congress approved tax reform legislation that reduced the corporate tax rate from 35% to 21%. Noah Bank intends to pay out the bonuses on February 8.” – Feb. 2 2018, Noah Bank press release

PNC Financial Services Group, Inc. (Pittsburgh, Pennsylvania) -- $1,000 bonuses to 47,500 employees; an additional $1,500 in employee pension accounts; base wage hike to $15; $200 million charitable contribution:

"The tax reform law creates an opportunity to reward our employees who are working hard each day to serve our customers, build strong relationships in our communities and create long-term value for our shareholders," said William S. Demchak, PNC's chairman, president and chief executive officer. "The Board's decision to recognize our employees and support our communities is reflective of our commitment to PNC's success." – Dec. 22, 2017 PNC press release

Apple (There are nine Apple store locations in PA: Ardmore, King of Prussia, Lancaster, Philadelphia, Whitehall, Willow Grove, and three locations in Pittsburgh) -- $2,500 employee bonuses in the form of restricted stock units; nationally, $30 billion in additional capital expenditures.

AT&T -- $1,000 bonuses to 2,141 Pennsylvania employees; Nationwide, $1 billion increase in capital expenditures.

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

Cintas Corporation (Multiple locations in Pennsylvania) -- $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 Pennsylvania) – Bonuses ranging from $250 to $1,000; increased employee benefits; Nationwide, $50 million investment in existing restaurants.

Home Depot -- 70 locations in Pennsylvania, bonuses for all hourly employees, up to $1,000

Lowe's --13,000 employees at 84 stores and two distribution centers in Pennsylvania. 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 (Twenty-eight locations in Pennsylvania) – Tax reform bonuses for employees.

Starbucks Coffee Company (357 locations in Pennsylvania) – $500 stock grants for all 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 Pennsylvania) – $1,200 bonuses for full-time employees, $500 for part-time employees.

Walmart – 63 locations in Pennsylvania, 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.

McDonald’s (575+ locations in Pennsylvania) – Increased tuition investments which will provide educational program access for 400,000 U.S. employees. $2,500 per year (up from $700) for crew working 15 hours a week, $3,000 (up from $1,050) for managers, and more:

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

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

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

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

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

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

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

Wells Fargo – 260 locations in Pennsylvania; raised base wage from $13.50 to $15.00 per hour; Nationlly, $400 million in charitable donations for 2018; $100 million increased capital investment over the next three years.

Note: If you know of other Pennsylvania 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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Chaotic Markup Shows Klobuchar Antitrust Bill Is Nowhere Near Ready for Senate Floor

Posted by Tom Hebert on Thursday, January 20th, 2022, 5:15 PM PERMALINK Follow @tomhebertdc

In a 16-6 vote Thursday, the Senate Judiciary Committee advanced S. 2992, the “American Choice and Innovation Online Act.”

While Democrats and the media are painting this as a major step forward for the legislation, in reality the markup showed that S. 2992 is nowhere close to being ready for a floor vote. Lawmakers proposed a staggering 117 amendments to the legislation - clear evidence that a lot of work on the bill remains to be done.

Just like its House companion, S. 2992 was rushed to a full committee markup without a legislative hearing. Members had no public opportunity to debate or discuss the ramifications of the legislation before today’s markup.

Even supporters acknowledged that the bill was a work in progress. Sen. Alex Padilla (D-Calif.) raised doubts that self-preferencing was even a problem that Congress needed to solve, saying that he was “...not yet convinced that this bill as currently drafted will actually provide the net benefit to consumers that we’re seeking.” Sen. John Kennedy (R-La.) said that he anticipates sweeping changes to the bill before a full Senate vote, and if he’s not involved in making those changes, told lawmakers that “[he’ll] be off the bill faster than you can say Big Tech.”

Lawmakers across the spectrum expressed confusion over which companies the bill will actually cover. The original version targeted companies with a market capitalization of $550 billion and 50 million monthly users. Sen. Amy Klobuchar’s (D-Minn.) manager’s amendment expanded this definition to include privately-held companies with $30 billion in annual revenue and companies with over a billion monthly users. This new covered platform designation goes far beyond Big Tech and includes companies in the grocery, professional services, and agriculture sectors.

In defense of the consumer welfare standard and a consumer-based approach to antitrust regulation, six Senators voted against moving S. 2992 out of committee: Sens. Thom Tillis (R-N.C.), Marsha Blackburn (R-Tenn.), Tom Cotton (R-Ark.) John Cornyn (R-Texas), Ben Sasse (R-Neb.), and Sen. Mike Lee (R-Utah).

While antitrust crusaders may tout today’s markup as a victory, any fair observer would conclude that S. 2992 is an incredibly flawed piece of legislation that is nowhere near ready for the Senate floor.

Photo Credit: Fortune Live Media

Posted by Isabelle Morales on Thursday, January 20th, 2022, 5:05 PM PERMALINK Follow @IsabelleAliciaa

The IRS fails miserably at providing adequate taxpayer services, according to the National Taxpayer Advocate's 2022's Annual Report to Congress. NTA's report details numerous problems with the IRS's taxpayer services including that taxpayers face significant challenges reaching the IRS and that the IRS’s digital communications tools are too limited.

Importantly, these problems pre-dated the coronavirus pandemic.

As the report notes, taxpayers face significant challenges reaching IRS employees. The NTA notes that only 11 percent of calls were answered by a real person. In March of 2020, only 4 percent of calls were answered:

“During fiscal year (FY) 2021, the IRS received a record 282 million calls. Of those calls, 32 million, or 11 percent, were answered by CSRs…

The Level of Service (LOS) for the Accounts Management (AM) phone lines fell as low as four percent in March when Congress enacted sweeping legislation favorably impacting taxpayers’ 2020 taxes. Calls were not answered, leaving taxpayers wondering how the new legislation impacted their tax returns. In 2021, taxpayers experienced significant challenges while LOS fell to an all-time low.”

The IRS has been incapable of keeping up with phone calls for decades.

In 2013, NTA’s Nina Olson said that IRS customer service had not improved since 1998. "No, we don't have improved customer service," she said. Olsen was a community tax law project organizer during the IRS reform efforts, and was even invited to testify before the House Ways and Means Oversight Subcommittee in 1997 and before the Finance Committee in 1998.

In 2015, the IRS "courtesy disconnected" 8.8 million taxpayers, according to the National Taxpayer Advocate. “Courtesy disconnects,” is a term used by the IRS itself, a practice in which the agency hangs up on taxpayers when wait times are long.

The report also notes that IRS digital tools are limited, making communication with the agency unnecessarily difficult. As report notes:

“Despite its progress, the IRS has yet to develop and adopt a one-stop solution for online and digital offerings that combines communications and interactions with individual and business taxpayers as well as with tax professionals who represent these taxpayers... Imagine what the IRS can accomplish and how much time and effort it could save if taxpayers could easily access their tax information online. The National Taxpayer Advocate wants to stop imagining this; the IRS needs to have robust online accounts available for all taxpayers and their representatives.”

Advancement in digital tools, the report suggests, could be done with the IRS’s existing resources:

“The IRS needs to balance budget restrictions, use of existing resources, and taxpayer needs for each implementation.”

Again, these are not new issues. In past years, the IRS failed to improve communication issues. Congress passed the IRS Restructuring and Reform Act of 1998 (RRA 98), which sought to solve these issues. As the 2021 NTA report notes, “However, more than 20 years later, the IRS still has not meaningfully implemented this provision regarding its correspondence audit programs.”

Unfortunately, the agency has little regard for improving taxpayers’ experience working with the IRS. In fact, many IRS employees prefer to be hard to reach. One 2012 NTA blog outlines how Tax Examiners can simply disregard taxpayer cases because they know taxpayers may not be able to follow up on promised actions:

“No one employee must follow up on his or her actions or decisions with respect to a case or speak with the taxpayer about those decisions. Thus, it becomes easier for Tax Examiners to reduce taxpayers to mere paper to be processed or calls to be answered. In turn, it is easier to be careless or to succumb to the pressure to move on to the next case because Tax Examiners know the taxpayers will not be able to reach them again to follow up on promised actions.”

While the IRS insists all these problems are a result of a lack of funding, it is evident that each problem existed well-before any IRS budget cuts or COVID complications. The problem is not funding, but the way the agency is organized and run.

In the Democrats socialist spending bill, $44.9 billion would have gone directly towards enforcement. The agency would have received a comparatively meager $1.93 billion in funding for taxpayer services, which would be spread thin between pre-filing assistance and education, filing and account services, and taxpayer advocacy services.

The NTA’s Annual Report to Congress reiterates what most Americans already know: the IRS is woefully inadequate at doing its job, even when it has all the resources it needs.

Photo Credit: "A frustrated man sitting at a desk." by LaurMG is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license.

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Posted by Jack Baum on Thursday, January 20th, 2022, 2:47 PM PERMALINK Follow @Jack__Baum

In 2022, freelancers, small businesses, and independent contractors will experience a more burdensome and complex tax season due to new reporting requirements that came into effect through legislation passed by Democrats last year.

These changes were snuck into President Biden’s $1.9 trillion stimulus bill passed on a party-line basis and signed into law last March. The legislation expanded 1099-K reporting requirements by lowering the reporting threshold from $20,000 to $600 and eliminating the threshold requirement that taxpayers must have more than 200 transactions in one year to file.

These new requirements will significantly increase tax complexity for millions of independent contractors, small businesses, and freelancers by increasing what they have to report to the federal government. In essence, this creates new paperwork burdens that will disproportionately harm low and middle-class taxpayers that have been decimated by the coronavirus pandemic over the last two years.

The legislation also extends the 1099-K reporting to "specified electronic payment processors" and will harm gig economy workers who are compensated via online services such as Venmo, PayPal, Etsy sellers, Uber and Lyft drivers, and even food delivery workers. These workers typically work in these job fields due to the flexibility that they can provide.

This is not the first time Democrats have enacted burdensome new reporting requirements. In 2010, lawmakers included new 1099 reporting requirements in Obamacare. This law required small businesses to send 1099 forms for all purchases of goods and services over $600 annually. Soon after this provision was signed into law, the National Taxpayer Advocate raised concerns that these reporting requirements would cause “disproportionate” harm to small businesses and do little to improve tax compliance.

This provision was so unpopular with the American public that it was quickly repealed in 2011 with a bipartisan vote of 87 to 12 in the Senate and 314 to 112 in the House. The Obama administration even hailed repeal of the provision a “big win” for small businesses in a press release.

These new reporting requirements should be swiftly repealed as proposed by Congresswoman Carol Miller (R-W.Va.) who has introduced H.R.3425, the Saving Gig Economy Taxpayers Act. Senator Rick Scott (R-Fla.), has introduced similar legislation in the Senate.

After two years of economic unpredictability, we should be looking to support gig economy workers and small businesses who have struggled and persevered throughout the pandemic. The new 1099-K reporting requirements do the exact opposite, and will create unneeded complexity for millions of taxpayers this year.

Photo Credit: "Home of the Internal Revenue Service" by Joshua Doubek is licensed under CC-BY-SA-3.0

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Posted by Isabelle Morales on Thursday, January 20th, 2022, 11:50 AM PERMALINK Follow @IsabelleAliciaa

President Biden’s first year in office has been disastrous.

He has been responsible for severe inflation and the demise of American energy independence, but has also pushed harmful policies such as supersizing of the IRS, the largest tax hike since 1968, and socialized healthcare.

Below are five things you should know about Biden’s first year in office:

1) Inflation Surged to Its Highest Levels in 40 Years

Inflation has surged across the country due to out-of-control government spending, the administration’s policy of paying Americans not to work, and supply chain issues. In December, the consumer price index increased by 7 percent on an annualized basis, a 40-year high. This marked a steep increase from January 2021 when annual inflation was at a stable 1.4 percent.

Rampant inflation is harming Americans across the country. The average U.S. household spent $3,500 more in 2021 due to inflation, according to a Penn Wharton University of Pennsylvania Budget Model analysis.

Low-income households were disproportionately harmed. In the past year, the bottom 20 percent spent $309 more on food, $761 more on energy, $476 more on shelter, $390 on other commodities, and $224 on other services.

Not only is inflation increasing household costs for consumers, but it could also have long lasting economic damage by eroding purchasing power. This is especially alarming given that wages are decreasing - real average hourly earnings dropped by 2.4 percent on an annualized basis in December.

According to a Gallup poll, 71 percent of low-income households have reported experiencing financial hardship due to rising prices. Of the 71 percent, 28 percent of low-income households say they have experienced “severe hardship” due to rising prices, and 42 percent say they have experienced “moderate hardship.”

Since July, the Biden administration has been insisting this problem would go away. Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen described this inflation as "transitory." Clearly, those claims have not held up.

2) $3.5 Trillion Tax Hike, The Largest Tax Increase Since 1968

President Biden called for $3.5 trillion in tax increases in his 2022 budget proposal, the largest tax increase since 1968.

In nominal dollars, Biden’s $3.5 trillion tax increase would have been the largest in history. But even when comparing this tax as a percentage of the economy, this tax hike would be the largest in more than 50 years. While Democrats claimed this tax increase would fall on “the rich," the proposal would have raised taxes on small businesses and working families at a time when they were most vulnerable.

Biden’s proposal included the following harmful tax increases:

Raising the Federal Corporate Income Tax to 28 Percent. After accounting for state corporate taxes, Biden would give the U.S. a 32 percent corporate rate, a tax rate significantly higher than communist China’s 25 percent tax rate. This tax increase would harm working families, as a significant portion of this tax, about 70 percent, is borne by workers in the form of lower wages and lost jobs. Additionally, the tax would be felt by consumers, as 31 percent of the corporate tax falls on consumers through higher prices.
Retroactive Tax Increases on Capital Gains and Dividends. President Biden proposed doubling the capital gains tax rate. Under Biden, the average top capital gains rate will be 48.8 percent after state taxes. The retroactive nature of this proposed tax would cause anxiety and uncertainty, ultimately leading to substantial economic damage. This tax hike would result in severe double taxation, would reduce retirement savings, would suppress investment, and could even reduce federal tax revenue.
Creating a Second Death Tax by Repealing Step-Up in Basis. Biden proposed the creation of a second Death Tax by repealing step-up in basis. This would impose the capital gains tax (which Biden has proposed raising to 43.4 percent) on the unrealized gains of every asset owned by a taxpayer when they die and will be imposed in addition to the existing 40 percent Death Tax. This would create new complexity for many taxpayers, forcing predominantly family-owned businesses to downsize and liquidate assets, leading to fewer jobs, lower wages, and reduced GDP.
Increasing the Top Income Tax Rate to 39.6 Percent. This tax increase would have hit small business that are organized as sole proprietorships, LLCs, partnerships, and S-corporations. These “pass-through” entities pay taxes through the individual side of the tax code. Of the 26 million businesses in 2014, 95 percent were pass-throughs. Pass-through businesses also account for 55.2 percent, or 65.7 million of all private sector workers. More than half of all pass-through income would have been taxed at this new, higher rate.
Imposing a 15 Percent Minimum Tax on “Book Income.” This tax increase would create a new minimum tax on American businesses and disallow important, bipartisan credits and deductions that help promote job creation and economic growth.
Imposing Global Tax Hikes That Will Make American Business Uncompetitive. Biden proposed modifying the Global Intangible Low-Taxed Income (GILTI) regime and imposing a global minimum tax on American businesses of up to 26.25 percent. This proposal was significantly higher than the 15 percent global minimum tax rate that Biden Treasury Secretary Janet Yellen is pushing to get adopted by the G-20 and the OECD. This would impose double taxation on American businesses and make it difficult for them to compete against foreign companies.

3) Proposed Doubling the Size of the IRS, Enabling IRS to Snoop on Americans’ Bank Accounts

Biden proposed $80 billion in additional funding to the IRS, adding a whopping 87,000 new IRS agents – enough to fill Nationals Park twice. Biden’s proposal also included a provision enabling the IRS to track any bank account, credit union account, or third-party payment account (like Venmo, PayPal, and CashApp) exceeding gross inflows and outflows of $600.

In the Democrats’ latest, house-passed version of the reconciliation bill, funding for audits, investigations, and other tax enforcement was 23 times greater than funding for taxpayer education and assistance. Out of nearly $80 billion in new IRS funding, $44.9 billion, more than half, would go directly towards enforcement. The agency would receive a comparatively meager $1.93 billion in funding for taxpayer services, which include things like pre-filing assistance and education, filing and account services, and taxpayer advocacy services.

The bill would result in 1.2 million more annual IRS audits; about half will hit households making less than $75k. This is because, despite the Left’s claims that heightened enforcement would be directed solely towards “the rich,” the wealthy and large corporations already have armies of lawyers and accountants that ensure they are compliant with the tax code.

Instead, the IRS will go after easier targets to find additional tax revenue: small businesses and low- and middle-income individuals.

The agency has a long history of harassing taxpayers, discriminating against political adversaries, violating taxpayer privacy, and incompetence.

The administration’s proposed reporting regime would be a radical violation of privacy, would unleash the IRS’s harassment on virtually every American, and would disproportionately hurt low- and middle-income Americans.

4) Assault on American Energy Development

In the past year, President Biden president signed an executive order banning new drilling leases on federal lands, pursued more than $20 billion in new energy taxes on oil and natural gas production, and vetoed permitting for the Keystone XL pipeline here at home. At the same time, his administration lobbied Congress to oppose sanctions on the Russian Nord Stream 2 pipeline.

After one year of President Biden's failed presidency, Americans now face the highest gas prices since 2014, surging home-electricity prices, and increased reliance on oil from adversarial nations.

President Biden’s decision to cancel the Keystone XL pipeline had several negative impacts on jobs, energy, and geopolitics. For starters, stopping the project killed about 11,000 jobs in 2021, including the thousands of construction jobs for rural and Indigenous communities the pipeline was on track to create. Additionally, canceling the pipeline ultimately damaged a more efficient, environmentally friendly way to transporting oil. In fact, Keystone XL had committed to the pipeline being fully powered by renewable energy. Importantly, Biden's policy also cheated Americans out of cheaper, more accessible energy. If completed, the Keystone XL Pipeline would carry 830,000 barrels of oil from Canada through multiple states, where it would eventually reach Texas oil refineries, delivering savings to American families. Finally, killing the pipeline wasted billions of dollars in investments. TC Energy Corporation estimated an investment of more than $1.7 billion into communities, including $100 million in new property tax revenue and thousands of new middle-class jobs for both low and high-skilled workers.

In addition to killing the pipeline, the Biden administration also attempted to issue a ban on new leases to drill for oil and gas on public lands – an effective fracking ban on federal lands. Thankfully, a federal judge blocked this order from going into effect. If it had, it would have empowered foreign adversaries, like Russia, dwindled Americans’ access to energy, and increased energy costs at a time when gasoline prices have already skyrocketed by 49.6 percent.

The Democrats’ multi-trillion-dollar tax and spend bill, which Biden spent the year championing, included an $8 billion energy tax on methane from natural gas production and a $13 billion tax on crude oil, taxes that would be paid by American households in the form of higher energy bills.

Under the Biden Administration, Russia is now supplying more oil to the U.S. than any other foreign producer besides Canada. The Biden Administration went as far as lobbying Congress to vote against sanctions on Russia's Nord Stream 2 pipeline, sanctions that were supported by 55 Senators including 6 Democrats.

President Biden’s blows to the American energy sector hurts our energy independence and empowers foreign adversaries like Russia. These policies threaten Americans’ access to affordable energy, the U.S. economy, and national security.

5) Pushed for Socialized Healthcare

Biden’s proposal would have imposed drastic price controls on American medical innovation. Specifically, his proposal would have created a 95 percent excise tax on manufacturers who did not agree to socialist price controls. This means that a manufacturer selling a medicine for $100 would owe $95 in tax for every product sold with no allowance for the costs incurred. No deductions would be allowed, and it would be imposed on manufacturers in addition to federal and state income taxes they must pay.

This proposal would have led to 167 to 324 fewer new drugs, according to an issue brief by Tomas J. Philipson and Troy Durie at the University of Chicago. These results are severe, but not surprising. After all, this proposal would arbitrarily set the price of medicines similar to the way other countries with socialized health systems have.

Countries that utilize socialist price controls have lower access to care. For instance, Canadian patients wait an average of 19.8 weeks from referral to treatment. In the UK, at any one time, 4.5 million patients were waiting to see a doctor or receive care. By comparison, 77 percent of Americans are treated within four weeks of referral, while just 6 percent wait more than two months.

Further, Americans have access to far more medicines than other countries. According to research by the Galen Institute, 290 new medical substances were launched worldwide between 2011 and 2018. The U.S. had access to 90 percent of these cures. By comparison, the United Kingdom had access to 60 percent of medicines, Japan had 50 percent, and Canada had just 44 percent.

Additionally, this proposal would have threatened high-paying manufacturing jobs across the country at a time when we were just emerging from the economic wreckage from the pandemic. According to a 2017 study by TEConomy Partners, pharmaceutical manufacturers invest $100 billion in the U.S. economy every year, directly supporting 800,000 jobs including jobs in every state. These jobs are high-paying – the average compensation is $126,000 – more than double the average wage in the U.S. When accounting for indirect and induced jobs, medical innovation supports more than four million jobs.

In trying to be more like foreign countries with socialist policies, Biden was willing to restrict Americans’ access to life-improving and life-saving medicines and threaten much-needed, high-paying American jobs.

Photo Credit: Screen Capture, "Biden Remarks on Kabul," C-SPAN

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Posted by Tom Hebert on Wednesday, January 19th, 2022, 3:00 PM PERMALINK Follow @tomhebertdc

On Thursday, the Senate Judiciary Committee will markup S. 2992, the "American Innovation and Choice Online Act," legislation sponsored by Sen. Amy Klobuchar (D-Minn.) that upends decades of antitrust precedent and gives unelected bureaucrats new authority to pick winners and losers.

ATR President Grover Norquist released a letter to the Senate Judiciary Committee outlining several concerns with the bill, pointing out that it will increase the burden of inflation on American families and do nothing to stop conservatives from being censored by Big Tech.

Click here or below to read the letter in full:

Dear Members of the Senate Judiciary Committee:

I write to express concerns with S. 2992, the “American Innovation and Choice Online Act,” legislation sponsored by Sen. Amy Klobuchar (D-Minn.) that upends decades of antitrust precedent and gives unelected bureaucrats new power to pick economic winners and losers. If implemented, S.2992 will raise prices on families already struggling with inflation and break services Americans use every day.

The original bill targeted companies with a market capitalization over $550 billion and 50 million monthly users. Sen. Klobuchar’s manager’s amendment broadens the criteria for a “covered platform” even further to include privately held companies with annual revenue of more than $30 billion, ensnaring companies in the grocery, agriculture, and professional services sectors.

Using market capitalization or annual revenue to dictate how a company should operate is a radical departure from how U.S. law is typically written. In a search of all current federal statutes, the phrase “market capitalization” comes up in only five, none of which is about determining how a business is run based on this paper valuation.

S. 2992 shifts antitrust law away from the long-held consumer welfare standard, which protects consumers from harm, toward a European-style approach that protects individual competitors in a given market. This legislation bans companies over a government-determined size from selling or providing private-label products on their own platforms, a practice beneficial to consumers but negatively branded as “self-preferencing.”

While antitrust crusaders may paint self-preferencing in a bad light, it is not a business practice endemic to the companies this legislation targets. Brick-and-mortar retailers often promote their own generic products next to brand-name goods via preferable shelf space or promotional devices like coupons, end-caps, and window displays. This common business practice benefits shoppers through lower prices and more choices.

Banning self-preferencing would take away choice and access to generic products for American consumers, the vast majority of which are at a lower price point than name-brand goods. Families are already struggling with 7 percent inflation thanks to the reckless tax-and-spend policies of the Biden Administration. The last thing they need is reduced access to generic goods they are reaching for just to make ends meet.

This legislation would also interfere with goods and services Americans use every day, a classic case of needless government intervention in the private sector. Amazon would no longer be able to sell AmazonBasics products or provide free two-day Prime shipping. Google would no longer be able to display YouTube links, restaurant reviews, or Maps directions when searched. Apple could no longer preinstall apps on their devices, making your new iPhone virtually useless out of the box.

Conservatives should be wary of giving the Biden Administration any new antitrust authority, as this legislation does. If a company has been found to violate S.2992, it may be subject to a penalty of up to 15 percent of total revenues for a year. Depending on profit margins, this fine could easily be more than double the profit a given company makes in a year.

The left has not been shy about their plan to use antitrust law to push a progressive social agenda, and Sen. Klobuchar’s manager’s amendment shows that this legislation goes far beyond Big Tech. Sen. Klobuchar has repeatedly said that she wants to go after every industry “from cat food to caskets.”

Ultimately, this bill does nothing to stop conservative censorship, will increase inflation concerns for American families, and gives the Biden Administration sweeping new power to reshape the economy in service of a progressive social agenda.

Onward,

Grover G. Norquist
President, Americans for Tax Reform

Photo Credit: Gage Skidmore

Posted by Americans for Tax Reform on Wednesday, January 19th, 2022, 1:53 PM PERMALINK

In an op-ed published in American Banker today, ATR Federal Affairs Manager Bryan Bashur highlights the importance of providing regulatory relief and flexibility for financial institutions as they transition away from using the London Interbank Offered Rate (LIBOR) as a gauge for how much interest to charge on certain financial products. Trillions of dollars in contracts for mortgages, credit cards, bonds, student loans, futures, swaps, and options, will all feel the effects of this transition. As Bashur explains:

It is imperative that the United States government implement regulatory relief, emphasize flexibility and develop concrete guidelines for financial institutions so they can easily adapt to the changing interest rate landscape. As banks and other financial institutions rewrite contracts for mortgages, credit cards, bonds, student loans and financial derivatives to adjust to fluctuating interest rates, the federal government needs to ensure that the tax burden is limited and litigation is mitigated.

According to the Congressional Research Service, as of the end of 2020 Libor was referenced in over $220 trillion financial instruments denominated in U.S. dollars, including mortgages, student loans, bonds, derivatives and more. PwC estimates that Libor is tied to as much as $350 trillion “in bonds, loans, derivatives and securitizations worldwide.” The aggregate gross domestic product for all the economies in the world pales in comparison ($84.68 trillion in 2020) to the amount of financial products connected to Libor.

As LIBOR is phased out and new benchmark interest rates will be widely adopted, it is imperative that banks and other financial institutions are able to use reference rates that best suit their products and the customers they serve. As Bashur points out:

However, regulators should emphasize flexibility and allow financial institutions to use benchmark rates that best suit their customers. Benchmarks such as the American interbank offered rate (Ameribor) and the Bloomberg Short Term Bank Yield Index (BSBY) are credit-sensitive and “provide a more accurate reflection of lenders’ funding costs.”

Enabling lenders to choose among a host of different rates will lead to more innovative financial products and could increase capital disbursement to borrowers.

Some long-term financial contracts that use LIBOR do not include plans for how to adjust the terms when LIBOR is fully discontinued. However, Congress is working on legislation to provide a more concrete framework to ease the transition. Bashur states that:

Federal regulators also need to ensure that bonds or other contracts that extend beyond 2021 and do not include contingency plans for the Libor transition are able to avoid costly litigation, which would harm both lenders and borrowers.

Fortunately, Congress is working on a bill to provide a federal framework to allow these longer-term contracts to easily transition to new reference rates. Rep. Brad Sherman, D-Calif., introduced HR 4616, the Adjustable Interest Rate (Libor) Act of 2021, to provide a framework to ease financial institutions away from Libor for contracts that lack explicit language explaining how borrowers and lenders can transition their contract from Libor to a new reference rate. The federal framework would preempt any cumbersome patchwork of state laws that could inhibit a streamlined transition for financial contracts that cross state lines.

HR 4616 garnered strong bipartisan support and passed the House by a vote of 415-9. It is highly likely that the Senate will introduce a bipartisan bill identical or nearly identical to Rep. Sherman’s bill and pass it with little consternation.

One example of regulatory relief during the LIBOR transition is a rulemaking the IRS published that exempts financial contracts from capital gains tax if the terms of the contract are amended to reflect the change in benchmark interest rates. Bashur elaborates that:

The IRS concludes in the draft rule that the exemption from capital gains tax applies “to both the issuer and holder of a debt instrument and to each party to a nondebt contract.”

Accordingly, the final rulemaking would preserve the tax exemption and avoid the negative implications of imposing the burdensome capital gains tax on borrowers and lenders during the Libor transition. Application of a capital gains tax to mortgages and student loans in this scenario is unnecessary and erroneous.

Bashur urges Congress and federal regulators to continue the stream of regulatory relief “so that both lenders and borrowers can avoid costly litigation, burdensome taxation and illiquidity.”

Click here to read the full op-ed.

Photo Credit: "interest rate" by Mike Cohen is licensed under CC BY 2.0

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Posted by Katie McAuliffe on Wednesday, January 19th, 2022, 9:13 AM PERMALINK Follow @DigitalLibrary

Senator Roger Wicker is correct to call for further hearings on Gigi Sohn’s nomination to the Federal Communications Commission. There is still more information that needs to be discussed, such as the details of the Locast settlement and the conditions of recusal in FCC matters.

Sohn spearheaded an FCC proceeding that would have enabled tech platforms to effectively steal and monetize television content without paying for usage rights. Just as a-la-cart television didn’t need direction from lawmakers. The set-top box regulations were clearly trounced by the market, as a myriad of streaming options for viewing content are currently available. However, this is just one instance where Sohn engaged in attempts to weaken intellectual property rights.

Perhaps even more egregious, Sohn served on the board of Locast, a “non-profit” that was determined to be illegally retransmitting broadcasters’ content without their consent in violation of the Copyright Act. The case resulted in a permanent injunction that required Locast to pay $32 million in statutory damages. Sohn cannot be an impartial regulator of the broadcast industry after joining the Board of an organization that openly violated that industry’s copyrights.

It is also interesting to note that her nomination was received in the Senate from the President that on the same day that the Locast settlement was announced, October 28, 2021.

It has been reported that she is negotiating a recusal deal, but none of these details have been made public or shared with other senators on the committee. Further, we simply have to take Sohn’s word that she will recuse herself. These agreements have no force of law. It’s very problematic that someone who signed a $32 million settlement agreement with broadcasters now wants to regulate them.

Further a recusal from ruling on broadcast licenses, retransmission or copyright relating to the parent companies of ABC, CBS, NBC and Fox, who filed suit against Locast, would severely limit her ability to do any of the primary work of the Commission.

Americans for Tax Reform joined a coalition letter opposing her nomination over legitimate concerns regarding her ability to be impartial, which include hyper-partisan attacks on Republicans, interest in revoking broadcast licenses over viewpoints, doomsday predictions for the internet without Title II regulations.

Photo Credit: "Gigi Sohn" by Joel Sage is licensed under CC BY-SA 2.0

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Posted on Tuesday, January 18th, 2022, 4:45 PM PERMALINK

The Indiana House Committee on Commerce, Small Business and Economic Development will be considering legislation that would impose a first in the nation price control on nonalcoholic beverages. House Bill 1109, if implemented, would prevent distributers of packaged nonalcoholic beverages with a weight volume of 8 ounces or more from offering seasonal promotions and other discounts to Indiana retailers unless they are extended to every store in the state.

Despite the good intentions behind this bill, it would inflict a great deal of harm on the state economy. “Allowing the government to meddle into negotiations between private businesses in order to impose price controls would actually result in fewer discounts being available, driving prices up and leaving families across Indiana to face higher costs at a time when they can least afford it,” warned Grover Norquist, president of Americans for Tax Reform, in a letter to committee members. “Many of these households along state lines could decide to instead visit stores in Illinois, Kentucky, Michigan, or Ohio, hurting Indiana’s small businesses and their employees.”

To read the full letter, click here.

January 18, 2022

To: Members of the Indiana House Committee on Commerce, Small Business and Economic Development

From: Americans for Tax Reform

Re: Oppose House Bill 1109

Dear Representative,

On behalf of Americans for Tax Reform (ATR) and our supporters across Indiana, I urge you to oppose House Bill 1109, legislation that would jeopardize the right to private contract in order to impose price controls on certain nonalcoholic beverages. If implemented, this bill would inflict a great deal of harm on small businesses and consumers across the Hoosier State.

Under the status quo, all Indiana retailers, from small convenience stores to large chain grocery stores, can negotiate their preferred contract terms with the nonalcoholic beverage industry. This flexibility allows retailers to benefit from seasonal promotions and other price discounts that can be passed onto consumers, ultimately making their stores more competitive than those in surrounding states.

This free-market approach is not unique to Indiana, but is the standard practice used by all retailers and the nonalcoholic beverage industry nationwide. Unfortunately, HB 1109 seeks to disadvantage Indiana retailers by making it illegal for distributers of packaged nonalcoholic beverages with a weight volume of 8 ounces or more to offer special pricing deals in Indiana unless they are extended to every store in the state.

Despite the good intentions behind this bill, it would actually result in a number of negative consequences for the local economy. Allowing the government to meddle into negotiations between private businesses in order to impose price controls would actually result in fewer discounts being available, driving prices up and leaving families across Indiana to face higher costs at a time when they can least afford it. Many of these households along state lines could decide to instead visit stores in Illinois, Kentucky, Michigan, or Ohio, hurting Indiana’s small businesses and their employees.

Adding insult to injury, HB 1109 would also drive new investment, jobs, and opportunities away from Indiana. Why would a CEO in any industry want to do business in a state that is known for undermining the right to private contract and has the unwelcome distinction of being the only state in the country to impose price controls on nonalcoholic beverages? There are plenty of other states with lower tax rates that are much less hostile to businesses.

ATR opposes HB 1109 and urges lawmakers to vote NO.

Sincerely,

Grover Norquist

President

Americans for Tax Reform

Photo Credit: "Capitol del Estado de Indiana, Indianápolis, Estados Unidos" by Diego Delso licensed under CC BY-SA 3.0

Posted by Adam L. Radman, Patrick Gleason on Tuesday, January 18th, 2022, 2:14 PM PERMALINK

Americans for Tax Reform (ATR) commends Rep. Ted Budd and Gov. Pat McCrory for signing the Taxpayer Protection Pledge in their race for North Carolina’s U.S. Senate seat. The Pledge is a written commitment to North Carolina taxpayers that they will oppose and vote against all income tax hikes.

Candidates running for public office like to say they will not raise taxes, but often turn their backs on the taxpayer once elected. The idea of the Taxpayer Protection Pledge is simple enough: Make them put their no-new-taxes rhetoric in writing, so the promise is much harder to break.

“North Carolina voters are looking for solutions that get Americans back to work and grow the economy. I commend Budd and McCrory for signing the Taxpayer Protection Pledge and promising to hold the line on taxes,” said Grover Norquist, President of Americans for Tax Reform. “It’s the first step in jump-starting the economy.”

There are currently 179 Pledge signers in the U.S. House and 44 Pledge signers in the U.S. Senate. 85% percent of all congressional Republicans have made the written commitment to oppose higher taxes. In contrast, ZERO congressional Democrats have made that promise.

“During his time as governor, Pat McCrory signed the Taxpayer Protection Pledge and kept his commitment to North Carolinians. Not only that, but Gov. McCrory also enacted a multi-billion-dollar income tax cut that remains a national model for pro-growth tax reform,” Norquist said. “Congressman Budd, meanwhile, has maintained the Taxpayer Protection Pledge that he signed as a member of the U.S. House. In addition to keeping that commitment, he voted for the Tax, Cuts, and Jobs Act, the federal tax reform enacted in 2017 that provided a net tax cut to the vast majority of American households.”

In President Biden’s first year, he championed a multi-trillion tax and spend bill, which includes the largest tax increase since 1968. These tax hikes would disproportionately hurt workers, retirees, consumers, and small businesses. Taxpayers should expect more of the same for the remainder of his presidency.

“Voters have a right to know where candidates stand on taxes before heading to the voting booth,” added Norquist. “The Taxpayer Protection Pledge is a simple litmus test that tells voters I’ll work to protect your wallet. I encourage all candidates for elected office to make this commitment today.”

New candidates sign the Taxpayer Protection Pledge regularly. For the most up-to-date information on this race or any other, please visit the ATR Pledge Database.

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Posted by Drew Carlson on Tuesday, January 18th, 2022, 12:38 PM PERMALINK

Californian progressives are looking to implement the nation's first single-payer health care system. To pay for it, they want to double their state's tax burden, which is the third worst in the nation (beaten only by New York and New Jersey).

California Assemblyman Ash Kalra has proposed an amendment to California's state constitution introducing several taxes to pay for this new system. According to the California Globe, "If enacted, it would impose an excise tax, payroll taxes, and a personal income tax to fund comprehensive, universal single-payer health care coverage, as well as a health care cost control system." According to the Tax Foundation, the amendment would "increase taxes by $12,250 per household, roughly doubling the state's already high tax collections."

Among the taxes is a payroll tax on employers with over 50 employees. These tax hikes would stunt the growth of small businesses by providing a hard taxing wall that most would avoid. The law also imposes several surtaxes for personal income with a top rate of 2.5%. When combined with the current 13.3% top income tax rate and the 2.25 payroll tax, you are left with a combined maximum marginal rate of 18.05%, more than seven percentage points higher than the state with the next-highest rates (Hawaii, 11 percent) according to the Tax Foundation.

Finally, the amendment enacts a 2.3% Gross Receipt Tax on businesses. Gross Receipt taxes charge on a company's gross sales, without deductions for a firm's business expenses. These tend to harm businesses with low-profit margins and are generally seen as inefficient and damaging to the economy. Only a few states use them instead of a corporate income tax. California takes this flawed taxing model and makes it even worse.

Instead of imposing a GRT to replace the income tax, this new amendment imposes it on top of the income tax. As a result, California is burning the candle at both ends, leaving the businesses trapped in the middle. Not only that but California's 2.3% Gross Receipts Tax is "a rate more than three times that of the country's highest current pure GRT," according to the Tax Foundation.

California progressives need a 2/3 supermajority in both houses to approve to pass this amendment. However, once the taxes have been approved, a simple majority can, and most likely will, raise them. However, before they can do that, they need to clear one last hurdle. For a constitutional amendment to become law, California requires the public to vote on it as a ballot measure. And the people of California are getting tired of high taxes.

According to a report by the non-partisan California Policy Lab, "Entrances to California from other states have dropped 38% since March of last year, while the number of residents leaving to other states has increased 12%." Californians are tired of the state's overregulation and sky-high taxes and are leaving in higher and higher numbers. Do lawmakers think they will agree to raise taxes even more?

If Californians approve this amendment, life for Californian taxpayers will become even more untenable. Californians taxes will be doubled while their healthcare is placed in the hands of the same ineffective bureaucrats who can barely run the state. But it doesn't have to be this way. The people have a choice. We hope they choose rightly.

Photo Credit: “California Capitol in Downtown Sacramento, California” by Tszeiler1 is licensed under CC BY-SA 4.0.

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