ATR Leads Coalition of 80 Groups Opposing “Most Favored Nation” Executive Order
Americans for Tax Reform today released a coalition letter signed by 80 free market, conservative, and libertarian groups and activists in opposition to President Donald Trump’s recent “Most Favored Nation” executive order.
If implemented, the order would impose an “International Pricing Index” on Medicare Part B drugs, tying American drug prices to the prices in foreign countries with government-run healthcare systems.
President Trump has repeatedly stood strong against the left’s calls for socialized medicine, even promising in the 2020 State of the Union Address that “we will never let socialism destroy American healthcare.”
Unfortunately, an MFN policy would adopt these same socialist healthcare policies and threaten American medical innovation. As the letter notes:
Adopting these price controls will slow medical innovation, threaten American jobs, and undermine criticism of single-payer systems. In addition, a United States embrace of price controls will make it immeasurably more difficult to get foreign countries to pay their own way in the development of new medicines.
An MFN policy would also threaten our COVID-19 response and exacerbate foreign freeloading off of American innovation. As the letter notes:
The U.S. is the best in the world when it comes to developing innovative, lifesaving and life preserving medicines. Because of this, the U.S. is leading the way when it comes to developing COVID-19 vaccines, with several promising candidates entering the final stages of testing and clinical trials.
In contrast, foreign countries have been free riding off this American medical innovation for decades through crushing price controls and other market-distorting government rules and regulations.
The MFN order would also harm our economy through a decrease in research and development. Medical innovation directly or indirectly supports 4 million jobs and $1.1 trillion in total economic impact, which will be threatened by importing price controls from foreign countries.
Finally, the letter urges President Trump to apply the same successful, deregulatory, market-based approach that he has championed in other policy areas to health care:
As President, you have championed vital changes in tax and regulatory policies that have allowed free market innovation to flourish. We believe a market-based approach like those that your administration has consistently supported in other policy areas will lead to economic growth and promising new treatments, but adopting price controls through the MFN plan would undermine rather than build on those successes.
Click here to read the full letter.
Photo Credit: Tom Lohdan
Arkansas Residents Will Get Stuck with Even Higher Utility Bills Due to Biden Corporate Tax Rate Hike
If Biden and the Democrats enact a corporate income tax rate increase, they will have to explain why they just increased your utility bills
If President Biden and congressional Democrats hike the corporate income tax rate, Arkansas 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 six Arkansas 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 Arkansas Public Service Commission, Entergy Arkansas, Center Point Energy, Black Hills Energy, Oklahoma Gas & Electric, Arkansas Oklahoma Gas and Southwestern Power Electric Company passed along tax savings to their customers.
Entergy Arkansas: As noted in this February 28, 2018 Entergy Arkansas press release excerpt:
Customer bill credits will begin in April so customers will begin to benefit almost immediately and prior to summer when usage is typically higher.
Residential customers will see a savings of an estimated $20 per month for every 1000 kWh consumed from April 2018 to December 2019.
Business customers also will see significant bill reductions, allowing them to reinvest those savings into their business in 2018 as they deem appropriate.
Other effects of the TCJA are being considered in a docket opened by the APSC, and we expect those customer benefits to be reflected in future rate changes.
Center Point Energy: As noted in this August 28, 2018, Northwest Arkansas Democrat Gazette article excerpt
CenterPoint Energy, the largest natural gas utility in the state with more than 400,000 customers, has proposed to reduce its rates by $19.2 million beginning in October.
CenterPoint filed the request with the Arkansas Public Service Commission on Friday in response to an order by the commission to reduce rates as a result of the federal tax law change passed in December. Congress passed the Tax Cuts and Jobs Act that reduced the corporate tax rate from 35 percent to 21 percent.
If the commission approves the lowered rate, Houston-based CenterPoint's rates would drop 9.5 percent on bills from October to January and 7.3 percent in January. For a customer with a bill of $100, it would fall to $90.50 under the first scenario and to $92.70 under the second scenario.
"Tax reform is a win for customers and reduced costs are being returned to them through various mechanisms or rate proceedings within each of our operating jurisdictions," said Alicia Dixon, CenterPoint's spokesman.
Black Hills Energy: As noted on the Black Hills Energy website:
Arkansas customers served by Black Hills Energy are seeing the benefits of the federal corporate tax rate reduction from 35 percent to 21 percent. These benefits first appeared on customers’ October 2018 bills. A typical residential customer will receive a monthly refund of about $4.64 per month ending in the middle of May 2019.
The total amount of cost-savings related to the Tax Cuts and Jobs Act for Arkansas customers is $8.2 million.
Oklahoma Gas & Electric: As noted in this Oklahoma Gas & Electric press release:
OG&E today announced that its average Arkansas residential customer will see approximately $113 in savings on upcoming electric bills.
In October, customers will see a credit of approximately $57 on their electric bill. Then, beginning in November, customers will see a credit of approximately $4 per month through the end of 2019. The savings are made possible by the reduction in corporate tax rates approved by Congress and signed by President Trump in December 2017.
“We’re pleased to pass on to our customers the benefits of tax savings that resulted from the Tax Cuts and Jobs Act,” said OG&E spokesman Brian Alford.
The credit will be noted on October bills as “Tax Cuts and Jobs Act Credit.”
Arkansas Oklahoma Gas: As noted in this October 9, 2018 Arkansas Public Service Commission document:
The purpose of this rider is to provide customers with certain tax benefits associated with the Tax Cuts and Jobs Act of 2017 (TCJA). The TCJA reduces the maximum corporate income tax rate from 35% to 21% beginning January 1, 2018. TA flows back to customers the net impact of the lower corporate income tax rate that includes annual tax savings, as well as changes to Accumulated Deferred Income Tax (ADIT) amounts. An adjustment for WNA impact for January 2018 through April 2018 will be included in the 2018 TA Rates.
TA applies to all natural gas service provided under any rate schedule, including rates under Special Contracts, subject to the jurisdiction of the Arkansas Public Service Commission.
Monthly credits shall appear as a line item on the bill titled, “Tax Cuts & Jobs Act Credit.”
Beginning with the November 2018 billing month through the December 2018 billing month, all retail base rates will be decreased by the amounts listed in Attachment A. The rates include carrying charges, calculated using the pre-tax rate of return approved in the Company’s most recent rate case in Docket No. 13-078-U, for the over collection in tax expense from January 1, 2018 until the date this rider became effective.
Southwestern Power Electric Company: As noted in this February 5, 2020 Arkansas Public Service Commission document:
On January 31, 2020, Southwestern Electric Power Company (SWEPCO) filed with the Arkansas Public Service Commission (Commission) proposed revisions to Rate Schedule 49, Federal Tax Cut Adjustment Rider (FTCA Rider) and the Supplemental Direct Testimony and Exhibits of Shawnna G. Jones.
Ms. Jones testifies that the total true-up amount due to Arkansas retail customers is an additional refund of $s,866,955 with carrying charges in the true up resulting in an additional refund of $321,726. She requests that the Commission approve Rider FTCA to be in effect for the March 2020 billing month that begins on February 28, 2020. Other than the true-up revisions to Rider FTCA, Ms. Jones testifies that SWEPCO proposes additional language to Rider FTCA that any residual amounts, after the refund is applied in March 2020, will be included in SWEPCO's next Energy Cost Recovery Rider filing with interest. Ms. Jones testifies that the bill impact to an average Residential customer using 934 kWh per month is a credit of $22.91 or a 23.28 percent decrease to total monthly bill. She states that SWEPCO will reflect the true-up as a separate line item on the customer bills labeled "Tax Cuts & Jobs Credit." Jones Supplemental Direct at 6-9.
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On the basis of the evidence currently before the Commission, namely, the testimony and exhibits filed herein by SWEPCO and Staff, the Commission approves SWEPCO's Rate Schedule No. 49 filed on January 31, 2020, as Supplemental Direct Exhibit SGJ-2, to become effective for bills rendered on or after February 28, 2020, and remain in effect until March 31, 2020.
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.
Republicans Should Reject Cicilline Mega-Regulation Antitrust Package
Congressman David Cicilline (D-R.I.) has spearheaded of antitrust bills with several Democrat sponsors that would fundamentally rewrite antitrust law to the detriment of American shoppers.
Cicilline is attempting to use conservative anger at Big Tech to persuade Republican lawmakers into giving the Biden Administration nearly unchecked power to regulate the entire economy. Many of these bills import European competition policy that has no precedent in American law.
Make no mistake about it - these bills do nothing to address conservative concerns with Big Tech censorship. These bills are hardly antitrust bills. Taken together, these bills are a test run for unelected Democrats to regulate entire sectors of the American economy.
Republicans should reject all of the below legislation:
H.R. 3826 – Platform Competition & Opportunity Act, sponsored by Rep. Hakeem Jeffries (D-N.Y.)
The Platform Competition & Opportunity Act prohibits a handful of “covered” tech companies from acquiring software businesses. This bill will hamstring innovative businesses from making acquisitions that enable them to better compete with rival firms, improving choice and access to goods and services for all Americans in the process.
If implemented, this bill would erode our competitiveness on the global stage at a time when Congress just passed a $250 billion piece of legislation that is supposed to boost our competitiveness with China. It would also close off a critical pathway to success for small startups, half of which say their most realistic long-term goal is to be acquired by a larger firm.
H.R. 3816 – American Choice and Innovation Online Act, sponsored by Rep. David Cicilline (D-R.I.)
The American Choice and Innovation Online Act would effectively ban covered platforms from selling or promoting their own private label products.
So-called “self-preferencing,” where businesses promote their own private label products next to brand name products, is not endemic to platform companies. Brick-and-mortar stores often promote their own generic goods on shelves next to brand-name goods, or with promotional devices like end-caps and window displays.
Enacting a line-of-business restriction for platform companies would take away valuable products and services that shoppers value. Banning Amazon from selling AmazonBasics products is equivalent to banning Costco from selling Kirkland products - it makes no sense.
The bill would also force platform companies to share sensitive personal user information with third parties, including app developers and foreign software. At the same time, the bill prohibits platforms from removing third-party sellers from their marketplaces.
This would force platforms to host malicious apps and then share personal information of American consumers with the developers.
H.R. 3842 – Merger Filing Fee Modernization Act, sponsored by Rep. Joe Neguse (D-Colo.)
The Merger Filing Fee Modernization Act would substantially increase the resources of the Biden FTC controlled by left-wing activists like Acting Chair Rebecca Slaughter and potential Commissioner Lina Khan.
This bill will expand the budget of the FTC at a time when the agency seems likely to use rulemaking authority to effectively create new substantive antitrust law, circumventing the legislative process and potentially implementing policy that Congress itself is unwilling to pass. The legislation will give money to unelected bureaucrats who intend to use the additional resources not just how they see fit, but to circumvent Congressional gridlock and input on antitrust law.
H.R. 3825 – Ending Platform Monopolies Act, sponsored by Rep. Pramila Jayapal (D-Wash.)
The Ending Platform Monopolies Act imposes structural separations on covered platforms that operate businesses that may create a "substantial incentive" to disadvantage competitors. Companies would have two years from their designation as a covered platform to sell off businesses that violate this bill's stringent requirements. If they fail to comply, "any person" involved with the company could face strict civil penalties of up to 30 percent of a year's revenue.
H.R. 3849 – ACCESS Act, sponsored by Rep. Mary Gay Scanlon (D-Penn.)
The ACCESS Act would force a few covered platform companies to disclose all their consumer data to competitors via a government-mandated “interface.” The bill would create massive privacy and liability issues, as companies would lose the ability to apply their own data security measures to information once it is imported to another platform. This would provide malicious hackers or criminals with a prime opportunity to circumvent security protocols implemented by certain platforms to access sensitive consumer data.
Additionally, the ACCESS Act requires companies to petition the FTC to make any changes to interoperability standards. The FTC can deny requests based on any reason related to “undermining interoperability.”
Taken together, these bills massively increase government power to regulate the economy. If passed into law, Biden bureaucrats would win, American shoppers would lose.
Republican lawmakers need to vote NO on all five of these bills.
Photo Credit: House Democratic Caucus
Washington State Residents Will Get Stuck with Even Higher Utility Bills Due to Biden Corporate Tax Rate Hike
If Biden and the Democrats enact a corporate income tax rate increase, they will have to explain why they just increased your utility bills
If President Biden and congressional Democrats hike the corporate income tax rate, Washington households and businesses will get stuck with even higher utility bills.
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 officials to pass along the tax savings to customers, including at least five Washington utilities. The savings take the form of either a rate reduction, or, a reduction to an existing/planned rate increase.
Working with the Washington Utilities and Transportation Commission, Avista Corporation, Puget Sound Energy Inc., Cascade Natural Gas, Pacific Power and Light and Northwest Natural Gas Company passed along tax savings to their customers.
Puget Sound Energy Inc.: As noted in this April 30, 2018 The Seattle Times excerpt:
Puget Sound Energy (PSE) says it will pass all of a $96.5-million cut in federal taxes on to electric and natural gas customers.
The tax savings will cut residential electric bills by $3.50 a month and trim natural gas bills by $1.83 a month, according to a written statement from the organization. Those rate adjustments will take effect Tuesday.
Pacific Power and Light: As noted in this December 22, 2020 DailyEnergyInsider excerpt:
The first general rate case filed by Pacific Power in Washington since 2014, it also accelerates pass-through of remaining federal tax savings from the 2017 Tax Cuts and Jobs Act (TCJA) and depreciation of coal plant investments to remove coal, almost doubles the amount of wind generation being brought to Washington, establishes an advisory committee to oversee the development of new assistance programs for low-income customers and creates a new, flattened rate structure.
Cascade Natural Gas: As noted in this December 2019 Tri-Cities Area Journal of Business excerpt:
Rate changes for Cascade primarily are due to the purchased gas cost and decoupling mechanism, but they also include cost recovery for pipeline replacement, conservation programs, low-income assistance, and refunds related to excess deferred income taxes due to the Tax Cuts and Jobs Act. Kennewick-based Cascade serves more than 220,000 residential and business customers in 68 communities throughout the state, including Kennewick, Walla Walla, Sunnyside, Yakima, Wenatchee, Aberdeen, Bellingham, Bremerton, Longview, Moses Lake and Mount Vernon.
Northwest Natural Gas Company: As noted in this Northwest Natural Gas Company document:
The Order authorizes NW Natural to provide federal tax reform benefits to customers related to the Tax Cuts and Jobs Act enacted in December 2017. The Order directs NW Natural to provide customers with a rate reduction of $2.1 million over one year to reflect the benefit of the lower federal corporate income tax rate accumulating from January 1, 2018 through October 31, 2019, and provides an additional annual rate reduction initially set at approximately $0.5 million to reflect a benefit from the remeasurement of deferred tax liabilities of approximately $15.0 million.
Avista Corporation: As noted in this April 27, 2018 Avista news release:
Avista’s (NYSE:AVA) electric and natural gas general rate cases have concluded, with an order issued by the Washington Utilities and Transportation Commission (Commission or UTC). The Commission approved one-time electric and natural gas rate adjustments which will take effect May 1, 2018.
The Commission’s order approved electric rates designed to increase annual billed revenues by $10.8 million, or 2.1 percent and natural gas rates designed to decrease annual billed revenues by $2.1 million, or 1.6 percent. These revenues include the return to customers through base rates of approximately $26.9 million for electric service, and $5.5 million for natural gas service, as a result of the federal Tax Cuts and Jobs Act, which went into effect on Jan. 1, 2018.
Conversely, a vote for a corporate income tax rate hike is a vote for higher utility bills as households try to recover from the pandemic.
Many small businesses operate on tight margins and can't afford higher heating, cooling, gas, and refrigeration costs. President Biden should withdraw his tax increases.
Americans Oppose Taxing Unrealized Gains by an Overwhelming 3-to-1 Margin
ProPublica hardest hit
Across all demographic groups, Americans strongly oppose taxing unrealized gains, according to a survey experiment with 5,000 respondents published in May 2021.
The paper, The Psychology of Taxing Capital Income: Evidence from a Survey Experiment on the Realization Rule, is authored by Professor Zachary D. Liscow of Yale University Law School and Edward G. Fox of the University of Michigan Law School.
The researchers found:
"Respondents strongly prefer to wait to tax gains on publicly-traded stocks until sale versus taxing unsold gains each year: 75% to 25%. Though this opposition is strongest among those who are wealthier or own stocks, all demographic groups oppose taxing unsold gains by large margins. This opposition persists and is often strengthened when looking across a variety of other assets and policy framings."
The realization rule requires that property must be sold before gains are taxed. By a margin of 75 to 25, people preferred this rule.
The study also noted popular revolts against the property tax as evidence of the aversion to taxing unsold gains.
They asked participants about how a property tax should handle appreciated assets, noting that:
“In this context, respondents are again hesitant to fully tax gains on assets that have not been sold.”
Survey-takers’ massive rejection of abandoning the realization rule held up even after they heard arguments in favor of this kind of taxation, when they themselves don’t own stock, and even if they’re Democrats.
A primary reason for this is because people use “mental accounting” heuristics, under which they react differently to unsold gains than other ways of getting richer, like wages:
"... These behaviors are often thought to result from people using heuristics that put stocks in different “mental accounts” than money in the bank or wages. Using these heuristics, most people treat stock investments as an “open” mental account until sale and do not fully internalize paper gains or losses."
After all, taxes paid on these assets would have to come from other sources of income, not the asset itself.
The study explains this sentiment further:
"There is significant concern that unsold gains are not yet real in a sense. As shown in Table 4, the word most distinctively associated with opponents is “actual”—as in, taxpayers have not “actually” received income “yet.” Likewise, they note that the stock has not yet yielded “cash,” or anything in the taxpayer’s “hand.”"
Abandoning the realization rule is so unpopular that, even when told that this hypothetical tax would only impact those with over $10 million in wealth, the preference for taxing unsold stock gains only moderately increased by 9 percentage points to 34 percent.
Many on the left including the progressive group ProPublica are suggesting that unrealized gains should be taxed annually.
Senate Finance Committee Chair Ron Wyden (D-Ore.) plans to introduce a bill to tax unsold gains on assets for the rich, in an initiative he calls, “Treat Wealth like Wages.” Another example of this would be the wealth tax, a proposal several Democrats, like Senator Elizabeth Warren (D-Mass.), have proposed.
But as shown by the study, taxing unrealized gains cuts deeply against Americans’ sense of fairness and common sense.
Photo Credit: Stock Catalog
Wyoming Residents Will Get Stuck with Even Higher Utility Bills Due to Biden Corporate Tax Rate Hike
If Biden and the Democrats enact a corporate income tax rate increase, they will have to explain why they just increased your utility bills
If President Biden and congressional Democrats hike the corporate income tax rate, Wyoming households and businesses will get stuck with even higher utility bills.
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 officials to pass along the tax savings to customers, including at least four Wyoming utilities. The savings take the form of either a rate reduction, or, a reduction to an existing/planned rate increase.
Working with the Wyoming Public Service Commission, Black Hills Energy, Black Hills Wyoming Gas, LLC, Montana-Dakota Utilities Co. and Rocky Mountain Power passed along tax savings to their customers.
Black Hills Energy: As noted in this September 23, 2019 ShortGO article:
Black Hills Energy’s Cheyenne electric utility customers are seeing benefits of the federal corporate tax rate reduction from 35 percent to 21 percent on September bills. The Wyoming Public Service Commission (WPSC) approved a proposal to return the tax savings stemming from the Tax Cuts and Jobs Acts for 2018 and 2019 in the form of a one-time bill credit to customers on their September bills.
The residential customer credit is $83.62, the commercial customer credit is $147.37, the Secondary General customer credit is $3,586.24, and the Primary General Service customer credit is $32,810.64. Customers will see slightly different amounts on their bill based on the refund impacts on taxes and fees included on the bill.
Black Hills Wyoming Gas, LLC: As noted in this March 10, 2020 Black Hills Wyoming Gas document:
The TCJA Amortization Credit refunds the net Non-Protected excess deferred income tax items owed to customers resulting from the Tax Cuts and Jobs Act. These tax items include the Non-Protected Property Rate Base amounts owed to customers, the Non-Protected Non-Property Rate Base amounts owed by customers, and the Non-Refunded ARAM from 2018 and 2019 owed to customers. The total amount to be returned to customers through the TCJA Amortization Credit is $1,672,740 as approved by the Commission in Docket No. 30026-2-GR-19.
Montana-Dakota Utilities Co.: As noted in this Montana-Dakota Utilities Co. document:
Wyoming customers of Montana-Dakota Utilities Co. (Montana-Dakota) who were billed for electric service during the months of January 2018 through April 2019 will see a one-time bill credit on their electric service bill issued between July 25, 2019 and August 26, 2019. This refund is associated with the Tax Cuts and Jobs Act of 2017 passed into law in late December 2017.
On June 13, 2018, Montana-Dakota filed an application with the Wyoming Public Service Commission (Commission) to update the Company’s electric rates in response to the passage of the Tax Cuts and Jobs Act of 2017 and the Commission’s Order Requiring Montana-Dakota to File its Tax Assessment Plan and Create a Deferred Regulatory Liability Account issued on December 29, 2017. On April 8, 2019, the Commission authorized an overall decrease in the Company’s electric service rates to be effective May 1, 2019 and a Tax Cuts and Jobs Act Refund for customers who were billed for electric service January 2018 through April 2019 to be applied to customers’ accounts no later than August 1, 2019. The bill credit includes interest at the Commission approved interest rate. New Tax Cuts and Jobs Act Refund for Wyoming Customers for January 2018 through April 2019 Electric Service Electric service rates were implemented May 1, 2019.
The electric rate refund plan approved by the Commission provides for the refunding of $1,614,096 to Wyoming electric service customers through a one-time bill credit on their electric bill to be applied by August 1, 2019. Each customer’s refund is based on their January 2018 through April 2019 consumption.
The bill credit is shown as a separate line item in the Account Summary section of your bill and will be identified as “Tax Cuts and Jobs Act Refund”.
Rocky Mountain Power: As noted in this April 17, 2019 Wyoming Public Service Commission document:
On May 16, 2018, the Company submitted an application proposing a new Tariff Schedule 197, 2017 Federal Tax Act Adjustment, to return the benefits of the 2017 Tax Cuts and Jobs Act to customers in Docket No. 20000-536-ER-18. The Company included, as part of its 3 application, a stipulated settlement agreement (“Stipulation”) between Rocky Mountain Power and the Wyoming Industrial Energy Consumers (“WIEC”) and a request to (1) reduce customer rates by $22.5 million; and (2) offset the 2018 Energy Cost Adjustment Mechanism (“ECAM”) deferral balance, for which the Company sought recovery in Docket No. 20000-535-EA-18 (“2018 ECAM”), by $3.6 million—both with benefits or savings resulting from the 2017 Tax Cuts and Jobs Act.
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On March 15, 2019, the Commission issued its Final Order in the docket and approved the part of the Stipulation in which parties agreed to refund $22.5 million of the tax benefits to customers until the next general rate case using average-of-period rate base calculations and rejected the part of the Stipulation in which parties agreed to use some of the benefits to automatically offset future costs related to the ECAM and Energy Vision 2020 projects. The Commission indicated instead that it would consider them in future, separate applications.
Conversely, a vote for a corporate income tax rate hike is a vote for higher utility bills as households try to recover from the pandemic.
Many small businesses operate on tight margins and can't afford higher heating, cooling, gas, and refrigeration costs. President Biden should withdraw his tax increases.
ATR Leads Coalition Against Global Minimum Tax
In partnership with the World Taxpayers Associations, Americans for Tax Reform is leading a large international coalition to oppose the implementation of a global minimum corporate tax rate. Interested organizations can sign the coalition letter here to join the movement.
On June 5th, 2021, the governments of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States agreed at a Group of Seven (G7) meeting to institute a global minimum corporate tax rate of at least 15 percent. The official 2021 G7 Summit will occur in the United Kingdom from June 11th to 13th. Leaders from the G7 countries are expected to promote an even more comprehensive agreement on international taxation at the G20 meeting in July.
“This agreement would significantly damage the valuable tax competition among countries and would cause undue harm to businesses, workers, and economies around the world,” reads the letter. “A global minimum tax would greatly curtail the force of tax competition. This competition between nations offers a critical check on the power of governments and it is vital for ensuring efficient and reasonable levels of taxation.”
The letter also notes that the proposed global minimum tax would be especially damaging to countries such as Ireland, Bulgaria, and Hungary, which currently have lower, more competitive corporate tax rates. A global minimum tax would also be harmful to developing countries, which can use low corporate tax rates in order to encourage investment and economic growth.
The international coalition recommends that the G7’s agreement on a global minimum corporate tax rate should be abandoned and should be rejected by the G20 in July.
Sign the coalition letter here to ensure that this harmful policy is not implemented on an international level.
Photo Credit: Linus Bohman
Biden’s Trillions in New Spending will Exacerbate Runaway Inflation
Inflation is running rampant in Joe Biden’s America. The Bureau of Labor Statistics found that in May, consumer prices increased by 5 percent on an annualized basis, the fastest increase since 2008. While this inflation has already hit American families hard, President Biden is pushing policies which would this problem even worse.
According to BLS, the cost of many goods and services have increased significantly over the past year. For instance, lumber costs have increased 375 percent, car rentals have increased 110 percent, gasoline has increased 56 percent, airfares have increased 24 percent, and major appliances have increased by 12.3 percent. Furniture has increased 9 percent, whole milk has increased 7.2 percent, bacon has increased by 13 percent, and clothes have increased 6 percent.
Not only does inflation harm consumers by increasing household costs, but it can also have long lasting economic damage. As detailed in the New York Times:
“Inflation can erode purchasing power if wages do not keep up. A short-lived burst would be unlikely to cause lasting damage, but an entrenched one could force the Fed to cut its support for the economy, potentially tanking stocks and risking a fresh recession.”
With these trends in mind, it is especially concerning that President Joe Biden is pushing a multi-trillion budget, taking the U.S. to its highest sustained levels of federal spending since World War II, which is considered one of the most financially desperate times in American history. The budget calls for $6 trillion in spending for Fiscal Year 2022, spent on "infrastructure" and "human infrastructure." In reality, these plans are packed with wasteful spending. Flooding the U.S. economy with this kind of spending is bound to exacerbate inflation.
Former US Treasury Secretary Larry Summers, a Democrat, has warned that Biden’s heaving spending could lead to stagflation. Janet Yellen, the Biden administration's Treasury Secretary, suggested that if inflation "becomes an issue", the Federal Reserve may have to raise interest rates, which could severely impede the recovery. In fact, all these factors could throw us into a deeper recession than before.
Biden's policies have already resulted in a sluggish recovery. For example, job growth has been incredibly disappointing due to the administration's federal unemployment insurance benefits. The simple threat of Biden's tax hikes has resulted in some companies implementing a hiring freeze and/or putting off other investments and company plans.
Despite the Biden administration’s assurances that inflation should not be a concern, voters are still deeply concerned about it.
88 percent of voters say they are concerned about increased inflation, according to a recent Harvard CAPS and Harris poll. When asked what causes inflation, the top three answers were "Massive government spending," "Significant amounts of money being injected in the economy by the Federal Reserve," and "Uncontrollable government deficits."
The Biden administration should focus on growing the economy and helping businesses and working families. Instead, they are pushing massive new spending projects to finance a liberal wish-list. With inflation concerns growing, this is a particularly bad time to be trillions in new spending.
Photo Credit: The White House
Flashback: IRS Stonewalled Lois Lerner Investigation and Let the "Midnight Unit" Destroy 24,000 Lerner Emails
Will they do it again?
With the recent revelation that "thousands" of citizens had their private IRS tax information stolen and given to a progressive organization, the agency confirmed federal investigations are underway. But will the agency stonewall again and allow evidence to be destroyed?
Last time there was an IRS scandal, the agency assured congress and the public that it was cooperating. In reality the IRS was stonewalling and destroying evidence related to the agency's targeting of conservative groups: In an over three-year period under the direction of Lois Lerner, only ONE conservative group was granted non-profit status.
In just one of the several instances of email destruction, backup tapes containing as many as 24,000 Lerner emails were destroyed by an IRS entity officially known as the “Media Management Midnight Unit” located in Martinsburg, West Virginia, per documentation released in July 2015 by the House Oversight Committee.
In all, 422 backup tapes holding the emails were magnetically “degaussed” despite an agency-wide preservation order and congressional subpoena. Degaussing is a process whereby powerful magnets are used to erase data on a storage tape.
The preservation order came from IRS Chief Technology Officer Terence Millholland in response to Congressional subpoenas over Lois Lerner’s emails. However, the agency completely failed to ensure the order was followed or understood. According to the House Oversight report:
“The IRS failed to ensure compliance with the preservation order at each turn. The IRS failed to confirm compliance with the preservation order in February 2014, upon learning of the gap in emails; failed to ensure the Media Management Midnight Unit, the team that destroyed the backup tapes, properly understood the preservation order; and failed to make certain that individuals who ordered the destruction of the specific media, in this instance the backup tapes, properly understood the preservation order.”
The backup tapes were sent to Martinsburg starting in May 2011, when the IRS took its backup system located in New Carrollton, Maryland and migrated it to the facility in West Virginia.
As the Oversight Committee report notes, IRS management failed to take simple steps to ensure backup tapes were not destroyed:
“Had IRS managers taken simple steps to ensure compliance with the order, the tapes likely would not have been destroyed.”
Interestingly, the tapes were destroyed a month after top IRS officials learned there were gaps in the Lerner email production.
In addition, Commissioner John Koskinen withheld both the preservation order and destruction of tapes from Congress:
“Koskinen withheld from Congress that a notice instructing preservation of backup tapes had been in place for over a year and that the IRS had deleted backup tapes containing as many as 24,000 emails during that time.”
As a result of the inability – or unwillingness -- of multiple IRS employees to follow the preservation order, as many as 24,000 emails are lost forever. As the House Oversight Committee notes:
“No one will ever know what was contained in those emails.”
Below is a 10-minute summary video outlining the IRS stonewalling of Congressional investigations into the Lois Lerner targeting scandal.
Durbin Backs Indexing Gas Tax to Inflation, Clear Violation of Biden’s $400,000 Tax Pledge
Senate Majority Whip Dick Durbin (D-Ill.) said Thursday that he supports indexing the gas tax to inflation to pay for an infrastructure package.
“I think that ultimately has to happen...I look at it as a user fee,” Durbin told reporters.
The call from Democrat Senate leadership to raise the gas tax comes as gas prices continue to soar over $3.00/gallon and consumer prices jumped 5% in May.
Indexing the federal gas tax to inflation would amount to a gas tax increase on autopilot. Congress has declined to increase the gas tax since 1993 when it was raised to its current level of 18.4 cents/gallon. For context, if the gas tax had been indexed to inflation in 1993, the current gas tax would be roughly 33.5 cents/gallon, more than an 80% increase of the current gas tax.
Durbin’s call to raise the gas tax is a clear contradiction of the Biden administration’s position to date and would violate President Biden’s promise that “nobody making less than $400,000 have to pay a penny more in tax under my proposals.”
Biden’s own Secretary of Transportation, Pete Buttiegieg, has previously acknowledged that increasing the federal gas tax would violate Biden’s pledge.
“The President’s made a commitment that this administration will not raise taxes on people making less than $400,000 a year,” Buttigieg told Bloomberg Radio’s “Sound On” show in February. “And so that rules out approaches like the old fashioned gas tax.” Buttgieg’s comments came as he walked back his previous call to raise the gas tax and index it to inflation during confirmation hearings.
Photo Credit: Charles Edward Miller
More from Americans for Tax Reform
Hawaii Residents Will Get Stuck with Even Higher Utility Bills Due to Biden Corporate Tax Rate Hike
If Biden and the Democrats enact a corporate income tax rate increase, they will have to explain why they just increased your utility bills
If President Biden and congressional Democrats hike the corporate income tax rate, Hawaii households and businesses will get stuck with even higher utility bills.
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 officials to pass along the tax savings to customers, including at least three Hawaii utilities. The savings take the form of either a rate reduction, or, a reduction to an existing/planned rate increase.
Working with the Hawaii Public Utilities Commission, Hawaiian Electric, Maui Electric and Hawaii Electric Light passed along tax savings to their customers.
Hawaiian Electric: As noted in this March 9, 2018 Hawaiian Electric press release:
Customers of Hawaiian Electric Company will see their bills fall as the result of an updated base-rate adjustment approved by the Public Utilities Commission (PUC) on Friday.
Changes in federal tax law reduced the corporate tax bill of Hawaiian Electric and the company announced in January it planned to pass on the savings to customers.
In February, the PUC approved an interim rate that increased the typical Oahu monthly residential bill for 500 kilowatt hours by $2.60, a 2.3 percent increase. It was the first increase to base rates in six years.
At the time, Hawaiian Electric said it was continuing to review the impact of the new tax law and that an updated rate filing would be made once the amount to be returned to customers was calculated. Hawaiian Electric made similar rate reductions in 1987 and 1989 following changes to federal tax law.
Under the new base rate approved Friday, the impact of the reduced tax collection is about $3.36 per month, resulting in the typical Oahu residential bill falling by about 76 cents from what it had been before the February rate increase.
Maui Electric: As noted in this January 10, 2018 Hawaiian Electric press release:
The 460,000 customers of the Hawaiian Electric Companies could see lower electric bills as a result of the federal corporate income tax cut. Changes to federal tax law will lower corporate rates from 35 percent to 21 percent starting this year. That is expected to result in a lower tax bill for Hawaiian Electric, Maui Electric and Hawaiʽi Electric Light. State and federal taxes are included in the base electric rate and with a lower federal tax, the tax rate imbedded in the bill will be reduced. “We’re in the process of analyzing the impact of the tax overhaul but it’s pretty clear at this point that this will benefit most customers,” said Tayne Sekimura, senior vice president and chief financial officer of the Hawaiian Electric Companies. “We will work with our regulators and the Consumer Advocate to determine the exact amount of the tax reduction and the best way to pass on the savings.” Any change in the base rate is subject to the approval of the Public Utilities Commission, which will also determine the timing of any change in rates.
Hawaii Electric Light: As noted in this March 28, 2018 Hawaiian Electric press release:
Hawaii Electric Light customers will see lower electric bills if a rate adjustment proposal submitted to the Public Utilities Commission (PUC) is approved.
The proposal will lower the typical bill for a Hawaii Island residential customer using 500 kilowatt hours by $4.97 a month. The effective date of the new rate will be determined by the PUC.
Changes in federal tax law reduced Hawaii Electric Light's corporate tax bill. In January, the company announced it planned to pass on the savings to customers.
Conversely, a vote for a corporate income tax rate hike is a vote for higher utility bills as households try to recover from the pandemic.
Many small businesses operate on tight margins and can't afford higher heating, cooling, gas, and refrigeration costs. President Biden should withdraw his tax increases.
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