A coalition of 26 conservative groups and grassroots activists at both the state and federal level released a letter today urging Congress to reject the Democrat antitrust power-grab spearheaded by Rep. David Cicilline (D-R.I.) and organized by far-left Members like Rep. Pramila Jayapal (D-Wash.). 

The coalition's message is clear – Democrat lawmakers are attempting to harness legitimate conservative anger at Big Tech to give unelected Biden bureaucrats sweeping new power to regulate the economy. Democrats are dealing in bad faith, and this Trojan horse package does absolutely nothing to address conservative concerns with Big Tech. If implemented, these bills increase the likelihood of political abuse. 

Republicans need to hold firm against this clear attempt by Democrats to weaponize antitrust law for their own political gain. 

You can view the full letter here or below. 

Dear Member of Congress: 

We urge you to reject the package of European-style over-regulation in the antitrust bills spearheaded by Rep. David Cicilline (D-R.I.) and co-sponsored by Members from the far left like Rep. Pramila Jayapal (D-Wash.). 

These bills are a deceitful attempt by Democrat lawmakers to exploit legitimate conservative anger over Big Tech in order to give the Biden administration sweeping new power to regulate the economy. But make no mistake about it – Democrats are dealing in bad faith, and this Trojan horse package does absolutely nothing to address conservative concerns with Big Tech censorship – and could increase those concerns. 

If implemented, bureaucrats in the Biden administration would wield vast new powers at the expense of American business and households. This heavy-handed approach should offer no comfort for those worried that the platforms are biased against them, as it actually increases the likelihood of political abuse. 

Republicans and free-market Democrats should hold firm and vote No. 

One bill would give bureaucrats power to determine if “covered” platforms with over fifty million users and a market cap of $600 billion might operate businesses that present a “conflict of interest.” If so, “any person” who fails to sell off these alleged conflicts of interest within two years of the bill’s enactment faces steep civil penalties of up to 30 percent of revenue in a given year.

At the same time, another bill effectively bans covered platforms from selling or providing private-label goods that consumers value in their marketplaces, which makes about as much sense as banning grocery stores from selling generic cereal. 

Another bill outlaws new acquisitions for covered platforms, a key driver of economic growth and innovation. The legislation inverts the burden of proof in certain antitrust cases that would presume that American companies are guilty of anticompetitive conduct until proven innocent. This would massively stack the deck in favor of government enforcers and litigious trial lawyers looking to score a quick buck by gaming the legal system. U.S. economic growth would be dealt a crippling blow just as we emerge from the pandemic.

Another bill would force covered platforms to share their data with competitors via a government-mandated “interface” – giving government agents and malicious hackers the ability to access sensitive consumer information all in one place. The final bill will give more resources to the Federal Trade Commission at a time when the agency, controlled by liberal activists like Commissioner Rebecca Slaughter and newly-installed Chair Lina Khan, seems likely to use rulemaking authority to effectively create new antitrust law. Once this power is claimed, they plan to deploy it in service of their social agenda

As a whole, this European antitrust approach would deliver Europe’s low levels of innovation and deprive Americans of choice and access to convenient services and products that we use each and every day. Apple would no longer be able to operate the App Store or Apple Music. Google would not be able to display YouTube links or Google Maps directions when searched. Amazon would lose the ability to offer free Prime shipping or AmazonBasics products. 

And that’s just the beginning. 

Meanwhile, these bills do absolutely nothing to address conservative concerns with Big Tech. This package is just a test run for Democrats to regulate entire sectors of the economy, and there is no reason to believe they will stop with technology companies. Sen. Amy Klobuchar has been crystal clear that she believes antitrust law is a tool for unelected bureaucrats to “rejuvenate capitalism.” 

A vote for this package is a vote to give bureaucrats even more power to pick economic winners and losers. This is neither a conservative nor free-market approach, and would stifle the robust competition that guarantees the best products and lowest prices for every American. 

Republicans need to hold the line and vote no against weaponizing antitrust law for Democrat political gains.  

Sincerely,

Grover Norquist
President, Americans for Tax Reform

James L. Martin
Founder/Chairman, 60 Plus Association

Saulius “Saul” Anuzis
President, 60 Plus Association

Marty Connors
Alabama Center Right Coalition

Brent Wm. Gardner
Chief Government Affairs Officer, Americans for Prosperity

Kevin Waterman
Chair, Annapolis Center Right Coalition Meeting (Maryland)

Iain Murray
Vice President for Strategy, Competitive Enterprise Institute

Ashley Baker
Director of Public Policy, Committee for Justice

Chuck Muth
President, Citizen Outreach (Nevada)

Katie McAuliffe
Executive Director, Digital Liberty

Heather R. Higgins
CEO, Independent Women’s Voice

Dave Trabert
Chief Executive Officer, Kansas Policy Institute

Rodolfo Milani
Chairman, Miami Freedom Forum (Florida)

Brian McClung
Chair, Minnesota Center Right Coalition

Pete Sepp
President, National Taxpayers Union

William O’Brien
Former Speaker, NH House of Representatives
Co-chair, New Hampshire Center Right Coalition

Doug Kellogg
Executive Director, Ohioans for Tax Reform

Tom Hebert
Executive Director, Open Competition Center

Lorenzo Montanari
Executive Director, Property Rights Alliance

Wayne Brough
Director of Technology & Innovation, R Street Institute

Mike Stenhouse
CEO, Rhode Island Center for Freedom & Prosperity

Karen Kerrigan
President & CEO, Small Business & Entrepreneurship Council

Kerri (Houston) Toloczko
Meeting Chair, SWFL Center-Right Coalition
Senior Policy Fellow, Institute for Liberty 

Patrick Hedger
Vice President of Policy, Taxpayers Protection Alliance

Ralph Benko
Chairman, The Capitalist League

Rusty Cannon
President, Utah Taxpayers Association

Cigarette sales in Japan have decreased by 43% over the past five years, the greatest decrease in recorded history. This drastic reduction in cigarette use is a direct result of heat-not-burn products, a recent innovation that is already saving lives. 

Switching to a heat-not-burn (HNB) product reduces a cigarette smokers' exposure to harmful chemicals. HNBs produce a vapor by heating the tobacco rather than burning it, like in cigarettes, to create smoke. As there is no combustion, and therefore no smoke, thousands of toxic chemicals found in traditional cigarettes are eliminated, and HNBs are proven to contain significantly less chemicals than combustible tobacco, a claim supported by the U.S. Food and Drug Administration. 

In July 2020, the FDA authorized the marketing of the IQOS Tobacco Heating System with “reduced exposure” information, meaning the product contains a reduced level of a substance. In their authorization, they noted that the heating process “significantly reduces the production of harmful and potentially harmful chemicals compared to cigarette smoke”. Further, the FDA stated that the product “significantly reduces the body’s exposure to 15 specific harmful and potentially harmful chemicals” as well as “potential carcinogens and toxic chemicals”. 

A study from January 2021 tested the chemical composition of cigarettes, e-cigarettes, and heat-not-burn products, referred to in the study as heated tobacco products, in addition to their toxicological impacts on respiratory cells. Published in the Journal of Hazardous Materials, the researchers made sure to test each product at the levels a consumer would. As they noted in their article, studies that have claimed to show high levels of chemicals in e-cigarettes and other reduced harm products are often the result of “unrealistic or extreme conditions”, such as extreme levels of consumption, unnaturally high e-cigarette power and temperature, and even the use of broken vapes. 

The key findings from the study can be read below. The full study can be accessed here. 

Key Findings: 

• Heated Tobacco Products (HTP) emitted 87.4% less carbonyl compounds than a conventional cigarette. Carbonyl compounds include formaldehyde, acetaldehyde and acrolein which are incredibly harmful. 

• Amazingly, the levels of carbonyl compounds found in e-cigarette vapor were “at least 98.5% weaker than in HTP aerosols”.  

• PAH (Polycyclic aromatic hydrocarbons) levels were also significantly lower in HTPs and e-cigarettes. A puff of a HTP produced 96.2% less PAHs than a conventional cigarette puff. 

• E-cigarettes emitted between 64.9-78.2% less PAHs than HTPs depending on the e-cigarette.

• While PAHs “generally have a low degree of toxicity”, continued exposure to them, like long-term cigarette smoking, can cause lung, skin, and bladder cancer. 

This study is clear evidence that HNB products are significantly less harmful than traditional cigarettes. Further, it adds to the ever-growing body of evidence in support of electronic nicotine delivery systems as a reduced harm alternative to tobacco.  

While e-cigarettes are growing in popularity in the United States, the UK, and other countries, they are still prohibited in Japan. Therefore, HNBs provide Japanese smokers with an opportunity to continue to use nicotine, which does not cause cancer and is simply addictive, while decreasing the harm they are subject to. Incredibly, the 43% decrease in cigarette sales in Japan has come without any sort of educational campaign from the government. Rather, Japan’s government has largely avoided interfering in the HNB market, allowing the industry to flourish, improving public health. 

South Korea is following Japan’s lead and is seeing similar results. Increases in HNB sales in South Korea has coincided with decreases in cigarette smoking, demonstrating that Japan's success can be replicated in other nations.

This should serve as an example for the United States, where lawmakers and government agencies are constantly waging war on e-cigarettes. This has resulted in an increase in cigarette sales after decades of steady decrease. If Japan and South Korea are any indication, serious improvements in public health are possible when government stays out of the way and allows reduced harm alternatives to be marketed as safer than cigarettes. 

If Feinstein and Padilla enact a corporate income tax rate increase, they will have to explain why they just increased your utility bills

If President Biden and Sens. Dianne Feinstein and Alex Padilla hike the corporate income tax rate, California households and businesses will get stuck with higher utility bills as the country tries to recover from the pandemic.

Democrats plan to impose a corporate income tax rate increase to 28%, even higher than communist China's 25%. This does not even include state corporate income taxes, which average 4 - 5% nationwide.

Customers bear the cost of corporate income taxes imposed on utility companies. Corporate income tax cuts drive utility rates down, corporate income tax hikes drive utility rates up. 

Electric, gas, and water companies must get their billing rates approved by the respective state utility commissions. When the 2017 Tax Cuts and Jobs Act cut the corporate income tax rate from 35% to 21%, utility companies worked with state officials to pass along the tax savings to customers, including at least twelve California utilities.

The savings typically come in the form of a rate reduction, a bill credit, or a reduction to an existing or planned rate increase. 

According to a report published in the trade publication Utility Dive, customers nationwide were to receive a $90 billion utility benefit from the Tax Cuts and Jobs Act:

Estimates derived from 2017 annual SEC 10-K filings indicate that the 14-percentage-point reduction in the corporate tax rate enacted under the 2017 Tax Cuts and Jobs Act (TCJA) resulted in investor-owned utilities establishing significant regulatory liability balances, totaling approximately $90 billion to be refunded back to customers.

Americans for Tax Reform has compiled a 90-second nationwide utility savings video from local news reports which may be viewed here.

If Democrats now impose a corporate income tax rate increase, they will have to reckon with local news coverage noting utility bills are going up. A vote for a corporate income tax hike is a vote for higher utility bills as households try to recover from the pandemic.

Tax Cuts and Jobs Act Impact: Working with the California Public Utilities Commission, California Water Service, Pacific Gas and Electric Company, Golden State Water Company, Suburban Water Systems, San Jose Water Company, California American Water Company, California-Oregon Telephone Company, Southern California Gas Company, Southern California Edison, San Diego Gas & Electric, Calaveras Telephone Company and Sierra Telephone Company passed along tax savings to their customers. 

Southern California Gas Company: As noted in this January 2020 Energy Division document:

SoCalGas tax savings from the TCJA to be refunded to ratepayers is $75 million.

California Water Service: As noted in this May 30, 2018 California Water Service press release:

California Water Service (Cal Water) submitted a filing with the California Public Utilities Commission (CPUC) yesterday to decrease revenue needed in its service areas by almost $18 million, due to changes in federal tax laws and CPUC-authorized capital equity and debt financing costs. If approved as submitted, new rates reflecting the lower tax rates and financing costs will be effective July 1, 2018.

Pacific Gas and Electric Company: As noted in this March 30, 2018, PG&E press release:

PG&E is taking action to pass along approximately $450 million in annual tax savings to its customers. As a first step, today PG&E made three separate filings requesting to pass along approximately $325 million per year in federal tax savings from the  federal Tax Cuts and Jobs Act for 2018 and 2019. PG&E has proposed to the CPUC that the benefits of the federal tax savings be used to offset expected rate increases.

Golden State Water Company: As noted in this June 13, 2018 CBS Sacramento news excerpt:

Golden State Water Company, which services Rancho Cordova, Gold River, and Arden Manor, wants to lower water rates for customers.

The water agency filed paperwork with the California Public Utilities Commission to decrease the rate by 2.88% for metered customers and 2.86% for flat-rate customers. The change, if approved, would take effect July 1, 2018.

Golden State Water made the decision to cut rates after the Tax Cuts and Jobs Act lowered its income tax rate from 35% to 21% on January 1, 2018. Golden State Water may retroactively credit customers if it determines there was a revenue surplus from January 1, 2018-June 30, 2018. It is also adjusting its rate proposal for 2019-2021, which it submitted in July 2017- before the Tax Cuts and Jobs Act was signed into law.

Suburban Water Systems: As noted in this September 24, 2020 California Public Service Commission document:

This Resolution grants Suburban Water Systems’ (Suburban) request in Advice Letter No. 348 the authority to amortize the 2019 amount of $289,879 or 0.34% of authorized revenues, recorded in the Tax Cuts and Jobs Act Memorandum Account (TCJAMA) related to the 2019 excess accumulated deferred federal income tax (ADFIT) not reflected in rates for the period January 1, 2019 through December 31, 2019. The 2019 balance of the TCJAMA will be amortized as a single monthly bill credit based on the customer’s meter size. The credit amount includes interest and is to refund the excess ADFIT related to 2019 revenue requirement not currently reflected in rates. 

San Jose Water Company: As noted in this January 16, 2020 California Public Service Commission document:

This Resolution grants San Jose Water Company’ (SJWC) request in Advice Letter No. 537 & 537A, the authority to refund the over collected amount of $6,624,690 for the period January 1, 2018 through December 31, 2018, or 1.75% of authorized revenues,recorded in the 2018 Tax Accounting Memorandum Account (TAMA). The balance is associated with changes in tax expenses resulting fromTax Cut and Jobs Act signed into law December 22, 2017 that among other matters reduced the federal corporate tax rate from 35% to 21% effective January 1, 2018. The TAMA should be closed and the balance transferred to a 2018 Tax Accounting Balancing Account to amortize the refund. The 2018 balance in the TAMA will be refunded as a one-time bill credit based on the customer’s meter size. The bill credit is effective beginning on January 21, 2020 as shown below. Any over or under refunded balance in the 2018 Tax Accounting Balancing Account once the amortization period concludes should be addressed in the context of SJWC’s 2022 Test Year general rate case.

California American Water Company: As noted in this December 13, 2018 American Water press release:

The California Public Utilities Commission (CPUC) today approved a decision in the company’s general rate case for new water and wastewater rates for customers statewide.

The company’s rate request, which was filed in July 2016, will set rates through 2020. The decision approves approximately $103 million in capital investment in infrastructure replacements and improvements in 2018 and 2019.

“We are extremely proud of our significant level of system investment, combined with operational efficiency measures and innovative technologies, to ensure continued water quality, service reliability and fire protection for the more than 600,000 Californians who depend on us every day,” said Rich Svindland, President of California American Water. “This decision enables us to continue this important work on behalf of our customers, while balancing the cost impact for them.”

The decision approves a $10.3-million annual increase in authorized water and wastewater revenues for California American Water compared to previously authorized rates in the fall of 2016. The increase reflects savings generated by changes in federal tax law from the 2017 Tax Cuts and Jobs Act and the 2018 Cost of Capital decision.

California-Oregon Telephone Company: As noted in this August 9, 2018 California Public Service Commission document:

Staff has recalculated the tax impact of the TCJA to include the excess deferred tax impact. Prior to the enactment of the TCJA, Cal-Ore’s deferred income tax liability balance was $1,182,356.  On January 1, 2018, the new tax rate of 21% resulted in deferred income tax of $730,279 causing an excess deferred tax reserve of $452,077.  This $452,077 should be returned to ratepayers ratably over the remaining life of the assets that gave rise to the excess tax reserve balance.  The TCJA provides guidance for the return of the excess deferred tax reserve under normalization rules.   In summary, the TCJA rules say that if the excess deferred taxes are to be reduced, they should be reduced no faster than using the average rate assumption method (ARAM).  But if the utility does not have the appropriate vintage data to use ARAM, an alternative method based on a composite rate is allowed.   

As a result, Staff recommends the $452,077 excess deferred income tax reserve should be returned to ratepayers over the weighted average of the remaining useful life of Cal-Ore’s depreciable assets as of December 31, 2017.  Appropriately, as the excess deferred tax reserve is returned to Cal-Ore’s ratepayers, rate base will be incrementally increased by $33,737 per year (as the $452,077 excess remaining in the deferred tax account will be incrementally decreased as it is returned to ratepayers).

Southern California Edison: As noted in this August 16, 2018 San Diego Union-Tribune article:

Representatives from Southern California Edison told the Union-Tribune the utility is reducing the total revenue it is requesting before the CPUC in its general rate case by about $139 million this year, about $185 million in 2019 and $235 million in 2020, largely due to the tax cut.

Without the legislation, Edison expected residential customers would see an average monthly increase of $1.51 a month this year, $5.01 in 2019 and $6.83 in 2020.

With the tax cut, the figures would drop to a 6-cents decrease per month in 2018, a $3.98 increase in 2019 and a $5.56 increase in 2020, based on average monthly usage of 550 kilowatt-hours.

San Diego Gas & Electric: As noted in this January 2020 Energy Division document:

Sempra GRC Gas Highlights:

• Disallowed SDG&E’s request to use 2018 tax savings from Tax Cuts & Job Act (TCJA) to offset expense for helicopter for fires and liability insurance, and to refund the $12 million tax savings to ratepayers over 2 years

Calaveras Telephone Company: As noted in this August 23, 2018 California Public Service document: 

Staff recalculated the tax impact of the TCJA to include the excess deferred tax impact. Prior to the enactment of the TCJA, Calaveras’ deferred income tax liability balance was $145,643. On January 1, 2018, the new tax rate of 21% resulted in deferred income tax of $89,956 causing an excess deferred tax reserve of $55,687. This $55,687 should be returned to ratepayers ratably over the remaining life of the assets that gave rise to the excess tax reserve balance, The TCJA provides guidance for the return of the excess deferred tax reserve under normalization rules. In summary, the TCJA rules say that if the excess deferred taxes are to be reduced, they should be reduced no faster than using the average rate assumption method (ARAM).   

Accordingly, Staff has adjusted the $55,687 excess deferred income tax reserve and returned it to ratepayers over the weighted average of the remaining useful life of Calaveras’ depreciable assets as of December 31, 2017.  Appropriately, as the excess deferred tax reserve is returned to Calaveras’ ratepayers, rate base will be incrementally increased by $10,507 per year (as the $55,687 excess remaining in the deferred tax account will be incrementally decreased as it is returned to ratepayers).

Sierra Telephone Company: As noted in this August 9, 2018 California Public Service Commission document: 

Staff has recalculated the tax impact of the TCJA to include the excess deferred tax impact. Prior to the enactment of the TCJA, Sierra’s deferred income tax liability balance was $5,131,347.  On January 1, 2018, the new tax rate of 21% resulted in deferred income tax of $3,169,361 causing an excess deferred tax reserve of $1,961,986.  This $1,961,986 should be returned to ratepayers ratably over the remaining life of the assets that gave rise to the excess tax reserve balance.  The TCJA provides guidance for the return of the excess deferred tax reserve under normalization rules. In summary, the TCJA rules say that if the excess deferred taxes are to be reduced, they should be reduced no faster than using the average rate assumption method (ARAM). But if the utility does not have the appropriate vintage data to use ARAM, an alternative method based on a composite rate is allowed.    

As a result, Staff recommends the $1,961,986 excess deferred income tax reserve should be returned to ratepayers over the weighted average of the remaining useful life of Sierra’s depreciable assets as of December 31, 2017. Appropriately, as the excess deferred tax reserve is returned to Sierra’s ratepayers, rate base will be incrementally increased by $316,449 per year (as the $316,449 excess remaining in the deferred tax account will be incrementally decreased as it is returned to ratepayers).

Conversely, if Biden and Democrats raise the corporate tax rate, they will add to the burden faced by working families. And any small businesses operate on tight margins and can't afford higher heating, cooling, gas, and refrigeration costs.

President Biden should withdraw his tax increases.

The Senate will vote this week to confirm Lina Khan to a seat on the Federal Trade Commission. 

Khan is a radical left-wing academic that will remake the FTC as a super-regulator of the entire economy and turn the clock back decades on antitrust law. 

Senate Republicans should vote NO on Khan’s nomination. 

Khan is a leading scholar in the progressive “hipster antitrust” movement to abandon the long-held consumer welfare standard, under which business conduct is evaluated on whether or not it harms consumers. If consumers are not being harmed through tangible economic effects like higher prices or reduced quality products, antitrust enforcement action is not taken.  

Instead of protecting consumers, Khan’s approach would turn antitrust law into a weapon wielded equally by inefficient companies and unelected Biden bureaucrats.

According to liberals leading the hipster antitrust movement, big companies are responsible for every social ill under the sun, including racism, poverty, and income inequality, among others. Liberals believe these companies abuse their bigness to stifle competition, cheat rivals, and harm workers. For these reasons and others, antitrust hipsters believe that government enforcers should step in and break these companies up, regardless of how it would impact consumers. 

This “big-is-bad” approach is how antitrust law was enforced before the consumer welfare standard was adopted, and it was an abject disaster. Antitrust law’s vague and unfocused nature made all manner of routine business conduct presumptively unlawful. Philosopher-king judges handed down inconsistent rulings designed to punish political enemies or reward political allies. In Supreme Court Justice Potter Stewart’s dissent to United States v. Von’s Grocery, he remarks: “The sole consistency that I can find is that in litigation under [Section 7 of the Clayton Act], the government always wins.” 

If confirmed, Khan would be instrumental in moving antitrust law back to this broken tradition. European-style antitrust legislation introduced last week by House Democrats would give the FTC sweeping new power and increased resources to regulate American companies. 

If Khan makes it on the FTC, the liberal activist-controlled agency would likely use its rulemaking authority to create substantive new antitrust law, circumventing Congress in the process. In such a hostile regulatory environment, companies afraid of aggressive and predatory antitrust litigation would be less likely to engage in robust competition that delivers low prices and quality products for American shoppers. In this new regime, instead of focusing on what is good for consumers, Biden bureaucrats would focus on what is good for Democrat political gain. 

For these reasons, Americans for Tax Reform urges all Senate Republicans to vote against Lina Khan’s confirmation.