John Kartch

Washington, D.C. Residents Will Get Stuck with Even Higher Utility Bills Due to Biden Corporate Tax Rate Hike

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Posted by John Kartch, Michael Mirsky on Thursday, September 2nd, 2021, 9:25 AM PERMALINK

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, D.C. 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 26.5%, even higher than communist China's 25% and higher than the developed world average of 23.5%. 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 two Washington, D.C. 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 Public Service Commission of the District of Columbia, Pepco and Washington Gas Light passed along tax savings to their customers.

Washington Gas Light: As noted in this October 18, 2018 Public Service Commission of the District of Columbia document

The Public Service Commission of the District of Columbia approved an additional, one time bill credit for all Washington Gas Light Company customers in the District. (Formal Case No. 1151, Order No. 19720). The Commission took action to require Washington Gas to pass on to customers $5.2 million in additional savings that the company has realized as a result of the federal Tax Cuts and Jobs Act of 2017. The credit will appear on customer’s bills for gas distribution service during the December 2018 billing cycle, in an amount depending on the customer’s usage. For a typical residential heating/cooling customer, the credit will be approximately $20. The credit comes at a time when gas distribution bills tend to go up because of increase use for winter heating. 

This is the second time that the Commission has required Washington Gas to pass on savings from the Tax Cuts Act to customers. The Commission previously ordered Washington Gas to lower its distribution rates starting in August 2018 to reflect $8.2 million in projected annual tax savings going forward. Since that time WGL residential heating/cooling customers have received on average a monthly bill savings of about $2.63. Wednesday’s action reflects tax savings from January 1 through July 31, 2018 that were not included in the August order.

Pepco: As noted in this Jan. 5, 2018 Pepco press release:

Pepco today announced they will file with the Public Service Commission of the  District of Columbia in early February, outlining plans to provide annual tax savings to more than 296,000 electric customers in the District of Columbia. If approved, Pepco would plan to begin providing a credit lowering customer bills starting in the first quarter of 2018.       

The tax savings are the result of federal tax reductions under the new Tax Cuts and Jobs Act, which was signed into law on Dec. 22, 2017, and became effective on Jan. 1, 2018. The decrease in the Corporate Tax Rate from 35 percent to 21 percent reduces the amount of federal income tax Pepco will have to pay. 

“The tax law will result in lower bills for our customers and lower taxes for Pepco,” said Dave Velazquez, President and CEO, Pepco Holdings, which includes Pepco.

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.

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Alaska Residents Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike

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Posted by John Kartch, Michael Mirsky on Thursday, September 2nd, 2021, 7:00 AM PERMALINK

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, Alaska 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 26.5%, even higher than communist China's 25% and higher than the developed world average of 23.5%. 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 four Alaska 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 Regulatory Commission of Alaska, Alaska Electric Light and Power, Enstar Natural Gas Company, Golden Heart Utilities and College Utilities passed along tax savings to their customers. 

Alaska Electric Light and Power: As noted in this July 3, 2018 Juneau Empire excerpt:

Alaska Electric Light and Power customers will see their electric rates drop.

The Regulatory Commission of Alaska approved AEL&P’s request to pass income tax savings through to its customers. Effective Aug. 1, customers will see a 6.73 percent decrease in electric rates as a result of the Tax Cuts and Jobs Act of 2017.

Debbie Driscoll, vice president and director of consumer affairs for AEL&P, said in a phone interview with the Empire Tuesday, the amount was determined by taking the last rate increase of 3.86 percent in November 2016 and combining it with the results of the Tax Cuts and Jobs Act. The Tax Act includes provisions lowering the effective federal corporate income tax rate from a maximum of 35 percent to a flat rate of 21 percent.

Enstar Natural Gas Company: As noted in this April 18, 2018 Alaska Journal of Commerce excerpt:

Enstar Natural Gas Co. anticipates $5 million in additional revenue coming in 2018 thanks to the U.S. corporate tax rate changing from 35 percent to 21 percent and plans to cut rates for its 144,000 customers. 

Enstar’s move is among the latest by companies on how they intend to use the benefits from the recently enacted Tax Cuts and Jobs Act of 2017. 

Golden Heart Utilities: As noted in this March 7, 2018 Anchorage Daily News article excerpt:

In December, Congress passed new tax law that included a major cut to the corporate tax rate — to 21 percent from 35 percent. That will likely mean major savings for the small number of Alaska utilities that aren't cooperatives or municipally owned.

Those utilities include Enstar Natural Gas, which serves Anchorage, the Kenai Peninsula and Mat-Su; Alaska Electric Light and Power (AEL&P) in Juneau; and Golden Heart Utilities and College Utilities, water and sewer utilities in Fairbanks.

College Utilities: As noted in this March 7, 2018 Anchorage Daily News article excerpt:

In December, Congress passed new tax law that included a major cut to the corporate tax rate — to 21 percent from 35 percent. That will likely mean major savings for the small number of Alaska utilities that aren't cooperatives or municipally owned.

Those utilities include Enstar Natural Gas, which serves Anchorage, the Kenai Peninsula and Mat-Su; Alaska Electric Light and Power (AEL&P) in Juneau; and Golden Heart Utilities and College Utilities, water and sewer utilities in Fairbanks.

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.

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Virginians Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike

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Posted by John Kartch, Michael Mirsky on Wednesday, September 1st, 2021, 5:00 PM PERMALINK

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

If President Biden and Sens. Tim Kaine and Mark Warner hike the corporate income tax rate, Virginia 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 26.5%, even higher than communist China's 25% and higher than the developed world average of 23.5%. 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 fourteen Virginia 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 Virginia State Corporation Commission, Appalachian Natural Gas, Aqua Virginia Inc., Columbia Gas of Virginia, Roanoke Gas, Virginia American Water Company, Virginia Electric and Power Company, Virginia Natural Gas, Appalachian Power, Washington Gas Light, Southwestern Virginia Gas, Atmos Energy and Dominion Energy Virginia passed along tax savings to customers.

Virginia-American Water Company: As noted in this January 8, 2018 SCC press release:

The legislation cuts the federal corporate income tax rate from 35% to 21% effective January 1, 2018. This tax cut, in turn, reduces the cost of service for many of Virginia’s major electric, gas and water utilities. Utility rates paid by customers are based on the cost of service.

To preserve the savings from this tax cut for customers, the Commission ordered all applicable Virginia utilities to account for the tax savings by accruing a regulatory liability on the utility’s books. The tax savings will thus be quantified and available to be passed on to customers in subsequent rate proceedings.

The utilities subject to the Commission’s order serve millions of Virginia residential and business customers. They include Virginia-American Water Company; Aqua Virginia, Inc.; Washington Gas Light; Columbia Gas of Virginia; Virginia Natural Gas; Roanoke Gas; Atmos Energy; Southwestern Virginia Gas; Appalachian Natural Gas Distribution; Kentucky Utilities; Appalachian Power Company; and Virginia Electric and Power Company.

Aqua Virginia, Inc.: As noted in this January 8, 2018 SCC press release:

The legislation cuts the federal corporate income tax rate from 35% to 21% effective January 1, 2018. This tax cut, in turn, reduces the cost of service for many of Virginia’s major electric, gas and water utilities. Utility rates paid by customers are based on the cost of service.

To preserve the savings from this tax cut for customers, the Commission ordered all applicable Virginia utilities to account for the tax savings by accruing a regulatory liability on the utility’s books. The tax savings will thus be quantified and available to be passed on to customers in subsequent rate proceedings.

The utilities subject to the Commission’s order serve millions of Virginia residential and business customers. They include Virginia-American Water Company; Aqua Virginia, Inc.; Washington Gas Light; Columbia Gas of Virginia; Virginia Natural Gas; Roanoke Gas; Atmos Energy; Southwestern Virginia Gas; Appalachian Natural Gas Distribution; Kentucky Utilities; Appalachian Power Company; and Virginia Electric and Power Company.

Columbia Gas of Virginia: As noted in this January 8, 2018 SCC press release:

The legislation cuts the federal corporate income tax rate from 35% to 21% effective January 1, 2018. This tax cut, in turn, reduces the cost of service for many of Virginia’s major electric, gas and water utilities. Utility rates paid by customers are based on the cost of service.

To preserve the savings from this tax cut for customers, the Commission ordered all applicable Virginia utilities to account for the tax savings by accruing a regulatory liability on the utility’s books. The tax savings will thus be quantified and available to be passed on to customers in subsequent rate proceedings.

The utilities subject to the Commission’s order serve millions of Virginia residential and business customers. They include Virginia-American Water Company; Aqua Virginia, Inc.; Washington Gas Light; Columbia Gas of Virginia; Virginia Natural Gas; Roanoke Gas; Atmos Energy; Southwestern Virginia Gas; Appalachian Natural Gas Distribution; Kentucky Utilities; Appalachian Power Company; and Virginia Electric and Power Company.

Virginia Natural Gas: As noted in this January 8, 2018 SCC press release:

The legislation cuts the federal corporate income tax rate from 35% to 21% effective January 1, 2018. This tax cut, in turn, reduces the cost of service for many of Virginia’s major electric, gas and water utilities. Utility rates paid by customers are based on the cost of service.

To preserve the savings from this tax cut for customers, the Commission ordered all applicable Virginia utilities to account for the tax savings by accruing a regulatory liability on the utility’s books. The tax savings will thus be quantified and available to be passed on to customers in subsequent rate proceedings.

The utilities subject to the Commission’s order serve millions of Virginia residential and business customers. They include Virginia-American Water Company; Aqua Virginia, Inc.; Washington Gas Light; Columbia Gas of Virginia; Virginia Natural Gas; Roanoke Gas; Atmos Energy; Southwestern Virginia Gas; Appalachian Natural Gas Distribution; Kentucky Utilities; Appalachian Power Company; and Virginia Electric and Power Company.

Atmos Energy: As noted in this January 8, 2018 SCC press release:

The legislation cuts the federal corporate income tax rate from 35% to 21% effective January 1, 2018. This tax cut, in turn, reduces the cost of service for many of Virginia’s major electric, gas and water utilities. Utility rates paid by customers are based on the cost of service.

To preserve the savings from this tax cut for customers, the Commission ordered all applicable Virginia utilities to account for the tax savings by accruing a regulatory liability on the utility’s books. The tax savings will thus be quantified and available to be passed on to customers in subsequent rate proceedings.

The utilities subject to the Commission’s order serve millions of Virginia residential and business customers. They include Virginia-American Water Company; Aqua Virginia, Inc.; Washington Gas Light; Columbia Gas of Virginia; Virginia Natural Gas; Roanoke Gas; Atmos Energy; Southwestern Virginia Gas; Appalachian Natural Gas Distribution; Kentucky Utilities; Appalachian Power Company; and Virginia Electric and Power Company.

Appalachian Natural Gas Distribution: As noted in this January 8, 2018 SCC press release:

The legislation cuts the federal corporate income tax rate from 35% to 21% effective January 1, 2018. This tax cut, in turn, reduces the cost of service for many of Virginia’s major electric, gas and water utilities. Utility rates paid by customers are based on the cost of service.

To preserve the savings from this tax cut for customers, the Commission ordered all applicable Virginia utilities to account for the tax savings by accruing a regulatory liability on the utility’s books. The tax savings will thus be quantified and available to be passed on to customers in subsequent rate proceedings.

The utilities subject to the Commission’s order serve millions of Virginia residential and business customers. They include Virginia-American Water Company; Aqua Virginia, Inc.; Washington Gas Light; Columbia Gas of Virginia; Virginia Natural Gas; Roanoke Gas; Atmos Energy; Southwestern Virginia Gas; Appalachian Natural Gas Distribution; Kentucky Utilities; Appalachian Power Company; and Virginia Electric and Power Company.

Kentucky Utilities: As noted in this January 8, 2018 SCC press release:

The legislation cuts the federal corporate income tax rate from 35% to 21% effective January 1, 2018. This tax cut, in turn, reduces the cost of service for many of Virginia’s major electric, gas and water utilities. Utility rates paid by customers are based on the cost of service.

To preserve the savings from this tax cut for customers, the Commission ordered all applicable Virginia utilities to account for the tax savings by accruing a regulatory liability on the utility’s books. The tax savings will thus be quantified and available to be passed on to customers in subsequent rate proceedings.

The utilities subject to the Commission’s order serve millions of Virginia residential and business customers. They include Virginia-American Water Company; Aqua Virginia, Inc.; Washington Gas Light; Columbia Gas of Virginia; Virginia Natural Gas; Roanoke Gas; Atmos Energy; Southwestern Virginia Gas; Appalachian Natural Gas Distribution; Kentucky Utilities; Appalachian Power Company; and Virginia Electric and Power Company.

Appalachian Power Company: As noted in this January 8, 2018 SCC press release:

The legislation cuts the federal corporate income tax rate from 35% to 21% effective January 1, 2018. This tax cut, in turn, reduces the cost of service for many of Virginia’s major electric, gas and water utilities. Utility rates paid by customers are based on the cost of service.

To preserve the savings from this tax cut for customers, the Commission ordered all applicable Virginia utilities to account for the tax savings by accruing a regulatory liability on the utility’s books. The tax savings will thus be quantified and available to be passed on to customers in subsequent rate proceedings.

The utilities subject to the Commission’s order serve millions of Virginia residential and business customers. They include Virginia-American Water Company; Aqua Virginia, Inc.; Washington Gas Light; Columbia Gas of Virginia; Virginia Natural Gas; Roanoke Gas; Atmos Energy; Southwestern Virginia Gas; Appalachian Natural Gas Distribution; Kentucky Utilities; Appalachian Power Company; and Virginia Electric and Power Company.

Virginia Electric and Power Company: As noted in this January 8, 2018 SCC press release:

The legislation cuts the federal corporate income tax rate from 35% to 21% effective January 1, 2018. This tax cut, in turn, reduces the cost of service for many of Virginia’s major electric, gas and water utilities. Utility rates paid by customers are based on the cost of service.

To preserve the savings from this tax cut for customers, the Commission ordered all applicable Virginia utilities to account for the tax savings by accruing a regulatory liability on the utility’s books. The tax savings will thus be quantified and available to be passed on to customers in subsequent rate proceedings.

The utilities subject to the Commission’s order serve millions of Virginia residential and business customers. They include Virginia-American Water Company; Aqua Virginia, Inc.; Washington Gas Light; Columbia Gas of Virginia; Virginia Natural Gas; Roanoke Gas; Atmos Energy; Southwestern Virginia Gas; Appalachian Natural Gas Distribution; Kentucky Utilities; Appalachian Power Company; and Virginia Electric and Power Company.

Washington Gas Light: As noted in this January 8, 2018 Washington Gas Light press release:

Washington Gas, a WGL Holdings, Inc. company (NYSE: WGL), announced plans today to file with state regulatory commissions in all three of its service territories, including the District of Columbia, Maryland, and Virginia, to pass through annual tax savings to the more than 1.1 million customers that the company serves across the region. 

If the recommendations are approved, Washington Gas has committed to providing a reduction in customer rates that would lower annual customer bills by approximately $34 million, beginning in the first quarter of 2018.

The federal tax savings are driven by the Tax Cuts and Jobs Act of 2017, a new law passed on December 22, 2017, that went into effect on January 1, 2018. Reducing the corporate income tax rate from 35 percent to 21 percent lowers the amount that Washington Gas will have to pay in federal income tax.

Dominion Energy Virginia: As noted in this March 8, 2019 SCC statement:

The State Corporation Commission (SCC) has ordered a reduction in the rates of Dominion Energy Virginia and Appalachian Power Company on April 1. The reduction and forthcoming rate credits continues a directive of the Commission issued in January 2018 that ensures customers receive the benefits of the corporate tax cut contained in federal tax legislation passed by Congress in December 2017.

The federal corporate income tax rate was reduced from 35% to 21% effective January 1, 2018. A week later, on January 8, the SCC ordered the companies to preserve the savings from this tax cut for the benefit of their customers.

AEP: As noted in this WSLS 10 News article:

The State Corporation Commission wants you to receive some of the benefits of the recent federal corporate tax cut.

The law cuts the federal corporate income tax rate from 35 percent to 21 percent.

As a result, the service cost for many of Virginia's major electric, gas and water utilities will be reduced. Those utilities include AEP, Roanoke Gas and Southwestern Virginia Gas.

Roanoke Gas: As noted in this WSLS 10 News article:

The State Corporation Commission wants you to receive some of the benefits of the recent federal corporate tax cut.

The law cuts the federal corporate income tax rate from 35 percent to 21 percent.

As a result, the service cost for many of Virginia's major electric, gas and water utilities will be reduced. Those utilities include AEP, Roanoke Gas and Southwestern Virginia Gas.

Southwestern Virginia Gas: As noted in this WSLS 10 News article:

The State Corporation Commission wants you to receive some of the benefits of the recent federal corporate tax cut.

The law cuts the federal corporate income tax rate from 35 percent to 21 percent.

As a result, the service cost for many of Virginia's major electric, gas and water utilities will be reduced. Those utilities include AEP, Roanoke Gas and Southwestern Virginia Gas.

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.

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Utah Residents Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike

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Posted by John Kartch, Michael Mirsky on Wednesday, September 1st, 2021, 4:32 PM PERMALINK

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, Utah 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 26.5%, even higher than communist China's 25% and higher than the developed world average of 23.5%. 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 two Utah 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 Utah Public Service Commission, Dominion Energy and Rocky Mountain Power passed along tax savings to customers.

Dominion Energy: As noted in this February 5, 2018 Desert News article:

The Utah Division of Public Utilities has announced that federal tax savings filed by Dominion Energy will be passed to Utah consumers. The company filed for $17 million in adjustments as the result of the recently enacted federal tax cuts, explained Chris Parker, director of the state Division of Public Utilities.

Utah utility customers should expect to begin seeing savings over the next few months, Parker said, with the first wave of cuts expected to take effect within the next 30 days, providing $2.5 million in savings on infrastructure.

The division is working with other agencies to immediately lower base rates to customers by an additional $14.5 million, he said, with further reductions to follow Dominion Energy’s gas cost filing later this spring.

Rocky Mountain Power: As noted in this October 2020 Utah Public Service Commission Document:

Further, the Company continues to propose to offset the base rate increase, in part, for two years by refunding a portion of the deferred tax savings associated with the Tax Cuts and Jobs Act (“TCJA”). Specifically, the Company proposes to pass back approximately $62.7 million of the TCJA deferred tax balance over two years. After consideration of interest, $38.2 million will be returned in 2021 and $26.8 million in 2022. This will result in a 1.1 percent increase in 2021, another 1.1 percent increase in 2022 when the credit is reduced, and a 1.3 percent increase in 2023 when the remaining tax deferral is fully refunded and the credit is eliminated. Further, the Company would align the credit in 2021 with the two-step base rate change such that the credit would be increased in the latter half of the year to fully offset the second base rate increase. However, as I explain later in my testimony, the Company is not opposed to refunding the TCJA deferred tax balance over a longer period of time provided the balance is used to offset the overall proposed base rate increase.

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.

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Heitkamp Warns Dems Not to Impose Second Death Tax

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Posted by John Kartch on Wednesday, September 1st, 2021, 1:37 PM PERMALINK

"I'm trying to sound the alarm both economically and politically for Democrats."

Today on CNBC's SquawkBox, Democratic former North Dakota Sen. Heidi Heitkamp sent a warning to Democrats who are thinking about killing stepped-up basis. Taking away stepped-up basis -- as President Biden has proposed -- would impose a second Death Tax on the American people:

"I'm trying to sound the alarm both economically and politically for Democrats, that this is not a path to walk, which is taxing unrealized gain.

You can look at different strategies for stepped-up basis, for realizing some income tax when that asset is eventually sold, but the disruption that this would create for small family businesses and for farmers and for family assets is just not worth the pain. In fact, ironically when it's polled, 70% of democrats agree with me that death should not be the taxable event."

Click here or below to view the video clip:


Alabama Residents Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike

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Posted by John Kartch, Michael Mirsky on Wednesday, September 1st, 2021, 10:50 AM PERMALINK

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, Alabama 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 26.5%, even higher than communist China's 25% and higher than the developed world average of 23.5%. 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 two Alabama 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 Alabama Public Service Commission, Alabama Power and Alagasco (Spire Inc.) passed along tax savings to their customers. 

Alabama Power: As noted in this May 1, 2018 the Birmingham News excerpt

Alabama Power Company customers will see a reduction in their bills because of the federal income tax cut approved by Congress last year, the Public Service Commission announced at its monthly meeting today.

The reduction in 2018 will be for $257 million, about a 9 percent cut, the PSC said.

The cut requires no action by the PSC, which regulates Alabama Power.

The reduction takes effect in July and continues through December.

The Tax Cuts and Jobs Act, signed into law in December, reduced the federal corporate income tax rate from 35 percent to 21 percent effective Jan. 1, 2018.

The three commissioners, all Republicans, said it was good to see consumers benefit from the tax cuts promoted and signed into law by President Trump.

"This is a great day for Alabama consumers and taxpayers," Commission President Twinkle Andress Cavanaugh said.

The commission approved two requests from Alabama Power related to the income tax cut.

One would allow the company to apply up to $30 million of excess federal deferred income taxes this year to Energy Cost Recovery, a factor in rate-setting.

The other request from Alabama Power was to make several changes to the PSC's method of setting rates, called Rate Stabilization and Equalization, or RSE. The PSC said the changes would enable Alabama Power "to mitigate the credit quality impacts" resulting from the Tax Cuts and Jobs Act and preserve rate stability for customers. The changes would allow Alabama Power to increase the equity share of its capital investment, the PSC said.

In conjunction with that second request, Alabama Power committed to no increases in its base rates through 2020 and to credit customers $50 million next year, the PSC said.

Alagasco (Spire Inc.): As noted in this February 2, 2018 the Birmingham News excerpt

Spire is giving relief to its Alabama customers in the form of rate decreases as a result of the utility being a beneficiary of the Trump tax plan.

Residential customers in Mobile can expect a 4 percent rate decrease while those in Spire's Central Alabama territory, which covers Montgomery and Birmingham, can expect a 3 percent rate decrease, Spire spokeswoman Jenny Gobble told AL.com Friday. The two territories operate under different tariffs and rate structures, which explains the different rate decreases.

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.

More from Americans for Tax Reform


Iowans Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike

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Posted by John Kartch, Michael Mirsky on Wednesday, September 1st, 2021, 9:30 AM PERMALINK

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, Iowa 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 26.5%, even higher than communist China's 25% and higher than the developed world average of 23.5%. 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 four Iowa 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 Iowa Utilities Board, Iowa American Water Co., MidAmerican Energy Company, Black Hills Energy and Alliant Energy passed along tax savings to customers.

Alliant Energy: As noted in this April 10, 2018 We Are Iowa article excerpt:

Alliant Energy announced this week that it will pass savings from lower federal taxes on to its customers in Iowa.

Annual savings, including tax-related savings from Alliant Energy’s transmission providers, are expected to be approximately $75 million, the company said.

“These tax savings are great for our Iowa customers and the new, lower corporate tax rate will benefit our families, businesses and communities today and in the future,” Doug Kopp, president of Alliant Energy’s Iowa energy company, said. “In the last six years, we’ve delivered about $500 million in other separate tax-related savings to customers, reducing energy costs.”

Typical residential electric customers will see an annual savings of approximately $50 to $60. Typical residential natural gas customers will see annual savings of approximately $30

Iowa American Water Co.: As noted in this Jan. 29, 2018 Des Moines Register article excerpt:

And Iowa-American Water Co., which provides service in eastern Iowa, would provide $1.5 million and $1.8 million to customers.

MidAmerican Energy Company: As noted in this April 5, 2018 Quad-City Times excerpt:

"A big part of the tax reform is the corporate income tax rate changing from 35 to 21 percent," said MidAmerican spokeswoman Tina Hoffman. "That is what the $42 million represents, with 100 percent going back to the customers."

The company expects to distribute $33 million on electrical bills and $8.8 million on natural gas bills. The total also includes annual savings for commercial and industrial consumers: $75 in electricity, $25 in natural gas for commercial customers and $8,000 in electricity, $175 in natural gas costs for industrial customers, she said.    

In addition, Hoffman said MidAmerican expects to save another $40 million to $50 million in 2018 from other tax-related benefits including new provisions related to how companies account for excess accumulated deferred taxes and depreciation. The utility plans to create an account to capture these benefits and use them to reduce the size or need for a future rate case in Iowa.

Black Hills Energy: As noted in this April 27, 2018 Iowa Utilities Board statement:

The Iowa Utilities Board issued multiple orders this week approving an estimated $78.7 million in savings for utility customers based on the IUB’s investigation and review of the tax refund proposals filed with the IUB by MidAmerican Energy, Alliant Energy-Interstate Power and Light, and Black Hills Energy regarding the 2017 federal tax reform law.

The IUB opened an investigation into the impact of the federal Tax Cut and Jobs Act of 2017 on Iowa’s rate-regulated utilities in January 2018, Docket No. INU-2018-0001. The utilities’ tax refund proposals detailing how customers would benefit are a result of this investigation. The new tax law reduced the federal corporate income tax rate from 35 percent to 21 percent.

The following tax refund proposal tariffs were approved by the IUB, subject to complaint or investigation:

Black Hills Energy will return an estimated $2.2 million to its natural gas customers in Docket No. TF-2018-0037.

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.

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Michigan Residents Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike

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Posted by John Kartch, Michael Mirsky on Wednesday, September 1st, 2021, 8:35 AM PERMALINK

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

If President Biden and Sens. Gary Peters and Debbie Stabenow hike the corporate income tax rate, Michigan 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 26.5%, even higher than communist China's 25% and higher than the developed world average of 23.5%. 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 nine Michigan 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 Michigan Public Service Commission, Alpena Power Co., Michigan Gas Utilities Corp., Northern States Power, SEMCO Energy Gas Co., Upper Michigan Energy Resources Corp. (UMERC), Consumers Energy, DTE Energy, ITC Holdings Corporation and Upper Peninsula Power Company passed along tax savings to their customers.

Alpena Power Co.: As noted in a May 30, 2018 Michigan Public Service Commission press release:

The Michigan Public Service Commission (MPSC) today approved settlement agreements with seven utilities to pass on to ratepayers their savings from the federal tax law rewrite, beginning in July. Three other utilities had no impact from the changes.

Filings were approved for Alpena Power Co., DTE Gas Co., Michigan Gas Utilities Corp., Northern States Power, SEMCO Energy Gas Co., and Upper Michigan Energy Resources Corp. (UMERC).

---

"Through swift action by the Commission, Michigan ratepayers will experience millions of dollars in refunds on their utility bills starting this summer due to changes in federal corporate income taxes," said Sally Talberg, chairman of the MPSC. “Utilities are benefiting from the tax cuts and their customers should, too.”

Michigan Gas Utilities Corp.: As noted in a May 30, 2018 Michigan Public Service Commission press release:

The Michigan Public Service Commission (MPSC) today approved settlement agreements with seven utilities to pass on to ratepayers their savings from the federal tax law rewrite, beginning in July. Three other utilities had no impact from the changes.

Filings were approved for Alpena Power Co., DTE Gas Co., Michigan Gas Utilities Corp., Northern States Power, SEMCO Energy Gas Co., and Upper Michigan Energy Resources Corp. (UMERC).

---

"Through swift action by the Commission, Michigan ratepayers will experience millions of dollars in refunds on their utility bills starting this summer due to changes in federal corporate income taxes," said Sally Talberg, chairman of the MPSC. “Utilities are benefiting from the tax cuts and their customers should, too.”

Northern States Power: As noted in a May 30, 2018 Michigan Public Service Commission press release:

The Michigan Public Service Commission (MPSC) today approved settlement agreements with seven utilities to pass on to ratepayers their savings from the federal tax law rewrite, beginning in July. Three other utilities had no impact from the changes.

Filings were approved for Alpena Power Co., DTE Gas Co., Michigan Gas Utilities Corp., Northern States Power, SEMCO Energy Gas Co., and Upper Michigan Energy Resources Corp. (UMERC).

---

"Through swift action by the Commission, Michigan ratepayers will experience millions of dollars in refunds on their utility bills starting this summer due to changes in federal corporate income taxes," said Sally Talberg, chairman of the MPSC. “Utilities are benefiting from the tax cuts and their customers should, too.”

SEMCO Energy Gas Co.: As noted in a May 30, 2018 Michigan Public Service Commission press release:

The Michigan Public Service Commission (MPSC) today approved settlement agreements with seven utilities to pass on to ratepayers their savings from the federal tax law rewrite, beginning in July. Three other utilities had no impact from the changes.

Filings were approved for Alpena Power Co., DTE Gas Co., Michigan Gas Utilities Corp., Northern States Power, SEMCO Energy Gas Co., and Upper Michigan Energy Resources Corp. (UMERC).

---

"Through swift action by the Commission, Michigan ratepayers will experience millions of dollars in refunds on their utility bills starting this summer due to changes in federal corporate income taxes," said Sally Talberg, chairman of the MPSC. “Utilities are benefiting from the tax cuts and their customers should, too.”

Upper Michigan Energy Resources Corp. (UMERC): As noted in a May 30, 2018 Michigan Public Service Commission press release:

The Michigan Public Service Commission (MPSC) today approved settlement agreements with seven utilities to pass on to ratepayers their savings from the federal tax law rewrite, beginning in July. Three other utilities had no impact from the changes.

Filings were approved for Alpena Power Co., DTE Gas Co., Michigan Gas Utilities Corp., Northern States Power, SEMCO Energy Gas Co., and Upper Michigan Energy Resources Corp. (UMERC).

---

"Through swift action by the Commission, Michigan ratepayers will experience millions of dollars in refunds on their utility bills starting this summer due to changes in federal corporate income taxes," said Sally Talberg, chairman of the MPSC. “Utilities are benefiting from the tax cuts and their customers should, too.”

Consumers Energy: As noted in January 19, 2018 Consumers Energy press release:

Consumers Energy today issued the following statement from President & CEO Patti Poppe:

‘Today, Consumers Energy was pleased to submit a proposal to the Michigan Public Service Commission that would lower customer bills starting in 2018 by approximately $200 million, as a result of the recent federal tax reform changes. We are thrilled to be able to pass along 100 percent of the savings from tax reform to the people we are privileged to serve. This underscores our commitment to people, planet and prosperity for all of Michigan.’”

DTE Energy: As noted in this January 23, 2018 DTE Energy press release:

DTE Energy issued the following statement regarding the impacts of H.R.1, the Tax and Jobs Act.

"The recent passage of the Federal Tax Cuts and Jobs Act will offer benefits to energy customers across the country – including DTE’s utility customers here in Michigan. The reduction of the corporate tax rate will result in lower bills for DTE’s 2.2 million electric and 1.3 million gas customers.

“In 2018, a savings of nearly $190 million will be passed along to customers. 

“As this tax reduction works through the regulatory process, our average electric and gas customers will see a reduction in their rates of about 3 percent. The reduction in rates due to the tax law change will be a significant infusion into the Michigan economy as our customers will enjoy this benefit for years to come.”

ITC Holdings Corporation: As noted in this April 2, 2018 ITC Holdings Corporation article excerpt

ITC Holdings Corp. (ITC), the nation's largest independent electricity transmission company, today announced it is reducing its customer rates as a result of the lower federal corporate income tax rate the company received under the Tax Cuts & Jobs Act of 2017.

ITC's wholesale electricity customers throughout the Midcontinent Independent System Operator (MISO) region will see an 8-to-10 percent reduction in transmission rates, retroactive to January 1, 2018, beginning with bills for services provided in March. A similar reduction will be made to ITC's formula rate in the Southwest Power Pool region for future periods, effective back to January 1, 2018. 

Upper Peninsula Power Company: As noted in this April 2, 2018 WLUC News article excerpt:

The Tax Cuts and Jobs Act (TCJA) was passed into law at the end of 2017, effectively lowering corporate tax rates from 35 percent to 21 percent. Upper Peninsula Power Company (UPPCO) is requesting approval of a proposal that would pass along the savings attributable to the TCJA to its customers. UPPCO’s proposal was filed with the Michigan Public Service Commission (MPSC) on March 30th as part of the process that is required by the state for determining how the benefits of the TCJA are to be credited to the utility’s customers.

“Under our plan, a typical residential customer consuming 500 kilowatt hours per month will see a reduction of approximately $1.30 on their monthly bills,” said Brett French, Vice-President of Business Development and Communications. “This is in addition to approximately $7 in monthly savings currently being seen by a typical residential customer because of the steps we implemented in January. We anticipate our customers will begin to see the additional savings later this summer after the MPSC approves our plan.” 

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.

More from Americans for Tax Reform


How Biden's Capital Gains Tax Rate Hike Targets Hard Working Americans

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Posted by John Kartch on Friday, August 27th, 2021, 5:20 PM PERMALINK

President Biden has vowed to nearly double the capital gains tax 39.6%, the highest rate since Jimmy Carter in 1977. This will impose a capital gains tax rate twice as high as communist China, and it will hit Americans who have worked hard and lived modestly for decades.

For example, the Wall Street Journal interviewed Kentucky resident Paul Settle, who will get whacked with a $390,000 Biden capital gains tax hike:

Five brick apartment buildings in this horse-country town make up Paul Settle’s retirement nest egg. He purchased the complex 27 years ago and has spent almost every day since tidying the grounds, repairing garbage disposals and collecting rent checks.

Mr. Settle, 64 years old, pays himself about $75,000 a year. The idea was always to one day sell and retire off the proceeds.

But now his plans are on hold. The Biden administration’s tax proposal would increase the capital-gains taxes Mr. Settle would pay on the sale of the apartments, which he expects to fetch over $2 million. Mr. Settle’s tax adviser estimates the changes could halve his after-tax proceeds to about $400,000 after paying off the mortgage.

“I’m in limbo,” he said.

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Mr. Settle used a mortgage to buy the apartments in Versailles (pronounced “Ver-sayles”) for $1.3 million in 1994, seven years after they were built. The complex sits next to a large park in a quiet residential neighborhood with single-family homes. It isn’t far from the former orphanage where his father grew up.

Settle does the repairs and cleans the apartments himself:

He visits the apartments daily, sweeping the laundry room before working on repairs and grabbing a fast-food lunch. He still cleans each unit himself when a tenant moves out.

This spring, he saw a television segment on the proposed increase in capital-gains rates. He thought it might not apply to him, but called his tax adviser to be sure. Mr. Settle, who voted for Mr. Biden, was stunned to learn the extent of the hit.

Eyeing retirement, Settle looked to sell the apartments but learned the Biden plain would cost him an additional $390,000 in taxes:

Under current rates, Mr. Settle’s tax adviser estimates that he would pay just under $500,000 in federal taxes on such a sale. That would leave him with about $800,000 after paying the mortgage, state and local taxes. Under the Biden plan, Mr. Settle would owe around $390,000 more in taxes, leaving him with about $400,000, his tax adviser estimates.

--

Anything close to $400,000 won’t be enough to retire on, he said, especially if he inherits his father’s longevity.

For now, Mr. Settle continues his daily rounds.

There are hard working people like Mr. Settle in every town in America who quietly work and save for decades to build up a retirement nest egg. They are the backbone of Main Street and the small business community. Biden and congressional Democrats are targeting them for a tax increase and dismissing them as something resembling Scrooge McDuck and Rich Uncle Pennybags.

Under Biden’s plan many taxpayers will pay a capital gains rate higher than 50%:

Californians will pay a top capital gains tax rate of 56.7 percent (39.6% + 3.8% NIIT + 13.3% CA state rate).

New Yorkers will pay a top capital gains rate of 52.2%

New Jersey taxpayers will pay a top capital gains tax rate of 54.14%.

Biden's plan will wallop America just as the country is trying to dig out from the pandemic. The plan also puts the USA at a competitive disadvantage vs. our economic competitors.

When comparing Biden's capital gains tax plan to China, the state capital gains tax burden must be included.

China's Capital Gains Rate: 20% 

United States Under Biden Plan: 48.8% (39.6% + 3.8% Obamacare tax + 5.4% state average)  

Photo Credit: Phil Roeder


Democrat Heidi Heitkamp Opposes Biden's Plan to Kill Stepped-Up Basis

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Posted by John Kartch on Friday, August 27th, 2021, 11:50 AM PERMALINK

Prominent farm-state leader Heidi Heitkamp (D-N.D.), a former U.S. Senator who endorsed Joe Biden for President, has come out in opposition to President Biden's plan to kill stepped-up basis.

As reported today in The Hill:

Former Sen. Heidi Heitkamp (D-N.D.) is leading a new effort to push back against proposals to tax capital gains at death, as the Biden administration and Democratic lawmakers seek to make such a change to help pay for their spending priorities.

“I think it’s wrong as a matter of economics, looking at middle class families, but I also think that for the Democratic Party, this is a path that should not be walked politically,” Heitkamp said in a phone interview with The Hill.

Heitkamp, who served in the Senate from 2013-2019, is chair of a new nonprofit called Save America’s Family Enterprises (SAFE), which is launching a six-figure ad campaign.

Biden has arrogantly dismissed stepped-up basis as just a "little thing" he wants to eliminate.

But Heitkamp noted one of the many ways the Biden proposal would hit farmers:

“Now that we see an emerging entrepreneurial class within the Hispanic community and within the African American community, they won’t be able to take advantage of these tax rules that will allow them to grow their business and keep capital in their business,” she said.

Heitkamp also said that taxing capital gains at death carries political risks for Democrats, referencing a poll SAFE conducted that found that more voters were opposed to a bill on this topic than supported it.

“I think it won’t be well-received by the public,” she said.

House Agriculture Committee Chairman David Scott (D-Ga.) also opposes the Biden plan

In a recent letter to Biden, he wrote:

I have serious concerns about proposed changes in tax provisions that could hurt our family farmers, ranchers and small businesses.

I am very concerned that proposals to pay for these investments could partially come on the backs of our food, fiber, and fuel producers. In particular, “step-up in basis” is a critical tool enabling family farming operations to continue from generation to generation. The potential for capital gains to be imposed on heirs at death of the landowner would impose a significant financial burden on these operations. Additionally, my understanding of the exemptions is that they would just delay the tax liability for those continuing the farming operation until time of sale, which could result in further consolidation in farmland ownership. This would make it more difficult for young, beginning, and socially disadvantaged farmers to get into farming. 

While I appreciate that the proposal provides for some exemptions, the provisions could still result in significant tax burdens on many family farming operations.

Montana Senator Jon Tester (D), a farmer, also opposes the Biden plan.

Tester said:

"I'm a small farmer in eastern Montana, and it would have significant effects on me."

Biden's proposal violates his pledge against any tax increase on any American making less than $400,000 per year. His proposal contains no exemption for these Americans.

 

 


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