Connecticut Companies Will Face Higher Taxes Than China and Europe if Dem Bill Passes

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Posted by John Kartch on Tuesday, October 5th, 2021, 9:26 AM PERMALINK

Connecticut companies will get stuck with higher taxes than China and Europe if the Democrats' reconciliation bill is enacted.

The Democrats' reconciliation bill will saddle Connecticut with a combined federal-state corporate tax rate of 32% vs. communist China's 25%.

The bill will also put Connecticut companies at a competitive disadvantage vs. Europe: The European average corporate tax rate is 19%.

Connecticut is home to 14 Fortune 500 companies, which provide jobs for thousands of state households.

"As the country tries to recover from a once-in-a-century pandemic, Connecticut's congressional Democrats must explain why they want to stick residents with higher taxes than China and Europe," said Grover Norquist, president of Americans for Tax Reform.

The Democrats' $3.5 trillion bill will impose the largest tax increase since 1968. It will raise individual income taxes, small business taxes, corporate taxes, and capital gains taxes.

If passed, the combined federal-state capital gains tax rate for Connecticut residents would be 38.79% vs. China's 20%.

The burden of the corporate tax rate hike will be borne by workers in the form of lower wages, and by households in the form of higher prices. Higher corporate tax rates will also raise utility bills.

The non-partisan Joint Committee on Taxation recently affirmed in congressional testimony that the corporate tax rate hike will fall on "labor, laborers."

Testifying before the House Ways & Means Committee, JCT Chief of Staff Thomas A. Barthold said:

"Literature suggests that 25% of the burden of the corporate tax may be borne by labor in terms of diminished wage growth."

WATCH:

Economists across the political spectrum agree that workers bear the brunt of corporate tax increases. And 25% is on the very low end.

According to Stephen Entin of the Tax Foundation, labor (or workers) bear an estimated 70 percent of the corporate income tax. He wrote in 2017:

"Over the last few decades, economists have used empirical studies to estimate the degree to which the corporate tax falls on labor and capital, in part by noting an inverse correlation between corporate taxes and wages and employment. These studies appear to show that labor bears between 50 percent and 100 percent of the burden of the corporate income tax, with 70 percent or higher the most likely outcome."

A 2012 paper at the University of Warwick and University of Oxford found that a $1 increase in the corporate tax reduces wages by 92 cents in the long term. This study was conducted by Wiji Arulampalam, Michael P. Devereux, and Giorgia Maffini and studied over 55,000 businesses located in nine European countries over the period 1996-2003:

"We identify this direct shifting through cross-company variation in tax liabilities, conditional on value added per employee. Our central estimate is that $1 of additional tax reduces wages by 92 cents in the long run. The incidence of a $1 fall in value added is smaller, consistent with our wage bargaining model."

A 2015 study by Kevin Hassett and Aparna Mathur found that a 1 percent increase in corporate tax rates leads to a 0.5 percent decrease in wage rates. The study analyses 66 countries over 25 years and concludes that workers could see a greater reduction in wages than the federal government raises in new revenue from a corporate income tax increase:

"We find, controlling for other macroeconomic variables, that wages are significantly responsive to corporate taxation. Higher corporate tax rates depress wages. Using spatial modelling techniques, we also find that tax characteristics of neighbouring countries, whether geographic or economic, have a significant effect on domestic wages."

A 2006 study by William Randolph of the Congressional Budget Office found that 74% of the corporate tax is borne by domestic labor:

"Burdens are measured in a numerical example by substituting factor shares and output shares that are reasonable for the U.S. economy. Given those values, domestic labor bears slightly more than 70 percent of the burden of the corporate income tax."

A 2007 study by Alison Felix estimated that a 1 percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. She concluded that the wage reductions are over four times the amount of collected corporate tax revenue:

"The empirical results presented here suggest that the incidence of corporate taxation is more than fully borne by labor. I estimate that a one percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. The magnitude of the results predicts that the decrease in wages is more than four times the amount of the corporate tax revenue collected."

A 2012 Harvard Business Review piece by Mihir A. Desai notes that raising the corporate tax lands “straight on the back” of the American worker and will see a decline in real wages:

"Because capital is mobile, high tax rates divert investment away from the U.S. corporate sector and toward housing, noncorporate business sectors, and foreign countries. American workers need that capital to become more productive. When it’s invested elsewhere, real wages decline, and if product prices are set globally, there is no place for the corporate tax to land but straight on the back of the least-mobile factor in this setting: the American worker."

Even the left-of-center Tax Policy Center estimates that 20 percent of the burden of the corporate income tax is borne by labor:

"In calculating distributional effects, the Urban-Brookings Tax Policy Center (TPC) assumes investment returns (dividends, interest, capital gains, etc.) bear 80 percent of the burden, with wages and other labor income carrying the remaining 20 percent."

"Democrats would be wise to oppose any tax increase," said Norquist.


Illinois Companies Will Face Higher Taxes Than China and Europe if Dem Bill Passes

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Posted by John Kartch on Tuesday, October 5th, 2021, 9:10 AM PERMALINK

Illinois companies will get stuck with higher taxes than communist China if the Democrats' reconciliation bill is enacted.

The Democrats' reconciliation bill will saddle Illinois with a combined federal-state corporate tax rate of 33.5% vs. communist China's 25%.

The bill will also put Illinois companies at a competitive disadvantage vs. Europe: The European average corporate tax rate is 19%.

Illinois is home to 38 Fortune 500 companies. 

"As the country tries to recover from a once-in-a-century pandemic, Illinois' congressional Democrats must explain why they want to stick residents with higher taxes than China and Europe," said Grover Norquist, president of Americans for Tax Reform.

The Democrats' $3.5 trillion bill will impose the largest tax increase since 1968.  It will raise individual income taxes, small business taxes, corporate taxes, and capital gains taxes.

If passed, the combined federal-state capital gains tax rate for Illinois residents would be 36.75% vs. China's 20%.

The burden of the corporate tax rate hike will be borne by workers in the form of lower wages, and by households in the form of higher prices. Higher corporate tax rates will also raise utility bills.

The non-partisan Joint Committee on Taxation recently affirmed in congressional testimony that the corporate tax rate hike will fall on "labor, laborers."

Testifying before the House Ways & Means Committee, JCT Chief of Staff Thomas A. Barthold said:

"Literature suggests that 25% of the burden of the corporate tax may be borne by labor in terms of diminished wage growth."

WATCH:

Economists across the political spectrum agree that workers bear the brunt of corporate tax increases. And 25% is on the very low end.

According to the Stephen Entin of the Tax Foundation, labor (or workers) bear an estimated 70 percent of the corporate income tax. He wrote in 2017:

"Over the last few decades, economists have used empirical studies to estimate the degree to which the corporate tax falls on labor and capital, in part by noting an inverse correlation between corporate taxes and wages and employment. These studies appear to show that labor bears between 50 percent and 100 percent of the burden of the corporate income tax, with 70 percent or higher the most likely outcome."

A 2012 paper at the University of Warwick and University of Oxford found that a $1 increase in the corporate tax reduces wages by 92 cents in the long term. This study was conducted by Wiji Arulampalam, Michael P. Devereux, and Giorgia Maffini and studied over 55,000 businesses located in nine European countries over the period 1996-2003:

"We identify this direct shifting through cross-company variation in tax liabilities, conditional on value added per employee. Our central estimate is that $1 of additional tax reduces wages by 92 cents in the long run. The incidence of a $1 fall in value added is smaller, consistent with our wage bargaining model."

A 2015 study by Kevin Hassett and Aparna Mathur found that a 1 percent increase in corporate tax rates leads to a 0.5 percent decrease in wage rates. The study analyses 66 countries over 25 years and concludes that workers could see a greater reduction in wages than the federal government raises in new revenue from a corporate income tax increase:

"We find, controlling for other macroeconomic variables, that wages are significantly responsive to corporate taxation. Higher corporate tax rates depress wages. Using spatial modelling techniques, we also find that tax characteristics of neighbouring countries, whether geographic or economic, have a significant effect on domestic wages."

A 2006 study by William Randolph of the Congressional Budget Office found that 74% of the corporate tax is borne by domestic labor:

"Burdens are measured in a numerical example by substituting factor shares and output shares that are reasonable for the U.S. economy. Given those values, domestic labor bears slightly more than 70 percent of the burden of the corporate income tax."

A 2007 study by Alison Felix estimated that a 1 percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. She concluded that the wage reductions are over four times the amount of collected corporate tax revenue:

"The empirical results presented here suggest that the incidence of corporate taxation is more than fully borne by labor. I estimate that a one percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. The magnitude of the results predicts that the decrease in wages is more than four times the amount of the corporate tax revenue collected."

A 2012 Harvard Business Review piece by Mihir A. Desai notes that raising the corporate tax lands “straight on the back” of the American worker and will see a decline in real wages:

"Because capital is mobile, high tax rates divert investment away from the U.S. corporate sector and toward housing, noncorporate business sectors, and foreign countries. American workers need that capital to become more productive. When it’s invested elsewhere, real wages decline, and if product prices are set globally, there is no place for the corporate tax to land but straight on the back of the least-mobile factor in this setting: the American worker."

Even the left-of-center Tax Policy Center estimates that 20 percent of the burden of the corporate income tax is borne by labor:

"In calculating distributional effects, the Urban-Brookings Tax Policy Center (TPC) assumes investment returns (dividends, interest, capital gains, etc.) bear 80 percent of the burden, with wages and other labor income carrying the remaining 20 percent."

"Democrats would be wise to oppose any tax increase," said Norquist.


Tobacco Tax Grab a Disaster for Michigan Residents, Businesses, & State Budget

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Posted by Tim Andrews on Monday, October 4th, 2021, 4:56 PM PERMALINK

Americans for Tax Reform (ATR) strongly condemned plans by Congressional Democrats to increase tobacco taxes by $96 billion as devastating to Michigan, ahead of a visit by President Joe Biden to Howell tomorrow.  

ATR’s Director of Consumer Issues, Tim Andrews, stated “Any plans to double the federal tobacco tax and impose new taxes reduced risk tobacco alternatives are a blatant violation of President Biden’s pledge not to raise taxes on anyone earning under $400,000. This tax hike will harm the poorest Americans and entrench income inequalities even further. 72% of smokers are low-income earners. It is unconscionable to increase taxes on the poor – who are still struggling with the effects of the Covid-19 pandemic - to pay for more subsidies for the rich. 
 
Andrews also noted the negative effects that this tax hike would have on the Michigan economy and on the State’s budget: “These new taxes will lead to disastrous economic consequences for retailers and family-owned convenience stores as more and more smokers will move to the black market. In addition to eliminating an estimated 400 jobs, estimates project that the tax hike will reduce wages by $19.6 million and significantly reduce state government revenue.  

Andrews concluded that “Democrats in other states like Kentucky Governor Andy Beshear have already condemned this proposal as bad for families and bad for their states. When President Biden visits Howell tomorrow, voters must hold him to his pledge and let him know that The Wolverine State just can’t afford more new taxes.” 

Photo Credit: Sagittariuss

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Michigan Companies Will Face Higher Taxes Than China and Europe if Dem Bill Passes

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Posted by John Kartch on Monday, October 4th, 2021, 3:10 PM PERMALINK

Michigan companies will get stuck with higher taxes than China and Europe if the Democrats' reconciliation bill is enacted.

The Democrats' reconciliation bill will saddle Michigan with a combined federal-state corporate tax rate of 30.9% vs. communist China's 25%.

The bill will also put Michigan companies at a competitive disadvantage vs. Europe: The European average corporate tax rate is 19%.

Michigan is home to 17 Fortune 500 companies, which provide jobs for thousands of Michigan families.

"As the country tries to recover from a once-in-a-century pandemic, Michigan's congressional Democrats must explain why they want to stick residents with higher taxes than China and Europe," said Grover Norquist, president of Americans for Tax Reform.

The Democrats' $3.5 trillion bill will impose the largest tax increase since 1968. It will raise individual income taxes, small business taxes, corporate taxes, and capital gains taxes.

If passed, the combined federal-state capital gains tax rate for Michigan residents would be 36.05% vs. China's 20%.

The burden of the corporate tax rate hike will be borne by workers in the form of lower wages, and by households in the form of higher prices. Higher corporate tax rates will also raise utility bills.

The non-partisan Joint Committee on Taxation recently affirmed in congressional testimony that the corporate tax rate hike will fall on "labor, laborers."

Testifying before the House Ways & Means Committee, JCT Chief of Staff Thomas A. Barthold said:

"Literature suggests that 25% of the burden of the corporate tax may be borne by labor in terms of diminished wage growth."

WATCH:

Economists across the political spectrum agree that workers bear the brunt of corporate tax increases. And 25% is on the very low end.

According to Stephen Entin of the Tax Foundation, labor (or workers) bear an estimated 70 percent of the corporate income tax. He wrote in 2017:

"Over the last few decades, economists have used empirical studies to estimate the degree to which the corporate tax falls on labor and capital, in part by noting an inverse correlation between corporate taxes and wages and employment. These studies appear to show that labor bears between 50 percent and 100 percent of the burden of the corporate income tax, with 70 percent or higher the most likely outcome."

A 2012 paper at the University of Warwick and University of Oxford found that a $1 increase in the corporate tax reduces wages by 92 cents in the long term. This study was conducted by Wiji Arulampalam, Michael P. Devereux, and Giorgia Maffini and studied over 55,000 businesses located in nine European countries over the period 1996-2003:

"We identify this direct shifting through cross-company variation in tax liabilities, conditional on value added per employee. Our central estimate is that $1 of additional tax reduces wages by 92 cents in the long run. The incidence of a $1 fall in value added is smaller, consistent with our wage bargaining model."

A 2015 study by Kevin Hassett and Aparna Mathur found that a 1 percent increase in corporate tax rates leads to a 0.5 percent decrease in wage rates. The study analyses 66 countries over 25 years and concludes that workers could see a greater reduction in wages than the federal government raises in new revenue from a corporate income tax increase:

"We find, controlling for other macroeconomic variables, that wages are significantly responsive to corporate taxation. Higher corporate tax rates depress wages. Using spatial modelling techniques, we also find that tax characteristics of neighbouring countries, whether geographic or economic, have a significant effect on domestic wages."

A 2006 study by William Randolph of the Congressional Budget Office found that 74% of the corporate tax is borne by domestic labor:

"Burdens are measured in a numerical example by substituting factor shares and output shares that are reasonable for the U.S. economy. Given those values, domestic labor bears slightly more than 70 percent of the burden of the corporate income tax."

A 2007 study by Alison Felix estimated that a 1 percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. She concluded that the wage reductions are over four times the amount of collected corporate tax revenue:

"The empirical results presented here suggest that the incidence of corporate taxation is more than fully borne by labor. I estimate that a one percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. The magnitude of the results predicts that the decrease in wages is more than four times the amount of the corporate tax revenue collected."

A 2012 Harvard Business Review piece by Mihir A. Desai notes that raising the corporate tax lands “straight on the back” of the American worker and will see a decline in real wages:

"Because capital is mobile, high tax rates divert investment away from the U.S. corporate sector and toward housing, noncorporate business sectors, and foreign countries. American workers need that capital to become more productive. When it’s invested elsewhere, real wages decline, and if product prices are set globally, there is no place for the corporate tax to land but straight on the back of the least-mobile factor in this setting: the American worker."

Even the left-of-center Tax Policy Center estimates that 20 percent of the burden of the corporate income tax is borne by labor:

"In calculating distributional effects, the Urban-Brookings Tax Policy Center (TPC) assumes investment returns (dividends, interest, capital gains, etc.) bear 80 percent of the burden, with wages and other labor income carrying the remaining 20 percent."

"Democrats would be wise to oppose any tax increase," said Norquist.


Vermont Companies Will Face Higher Taxes Than China and Europe if Dem Bill Passes

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Posted by John Kartch on Monday, October 4th, 2021, 9:18 AM PERMALINK

Vermont companies will get stuck with higher taxes than China and Europe if the Democrats' reconciliation bill is enacted.

The Democrats' reconciliation bill will saddle Vermont with a combined federal-state corporate tax rate of 32.7% vs. communist China's 25%.

The bill will also put Vermont companies at a competitive disadvantage vs. Europe: The European average corporate tax rate is 19%.

"As the country tries to recover from a once-in-a-century pandemic, Senator Sanders and Leahy and Congressmen Peter Welch must explain why they want to stick residents with higher taxes than China and Europe," said Grover Norquist, president of Americans for Tax Reform.

The Democrats' $3.5 trillion bill will impose the largest tax increase since 1968.  It will raise individual income taxes, small business taxes, corporate taxes, and capital gains taxes.

If passed, the combined federal-state capital gains tax rate for Vermont residents would be 40.55% vs. China's 20%.

The burden of the corporate tax rate hike will be borne by workers in the form of lower wages, and by households in the form of higher prices. Higher corporate tax rates will also raise utility bills.

The non-partisan Joint Committee on Taxation recently affirmed in congressional testimony that the corporate tax rate hike will fall on "labor, laborers."

Testifying before the House Ways & Means Committee, JCT Chief of Staff Thomas A. Barthold said:

"Literature suggests that 25% of the burden of the corporate tax may be borne by labor in terms of diminished wage growth."

WATCH:

Economists across the political spectrum agree that workers bear the brunt of corporate tax increases. And 25% is on the very low end.

According to Stephen Entin of the Tax Foundation, labor (or workers) bear an estimated 70 percent of the corporate income tax. He wrote in 2017:

"Over the last few decades, economists have used empirical studies to estimate the degree to which the corporate tax falls on labor and capital, in part by noting an inverse correlation between corporate taxes and wages and employment. These studies appear to show that labor bears between 50 percent and 100 percent of the burden of the corporate income tax, with 70 percent or higher the most likely outcome."

A 2012 paper at the University of Warwick and University of Oxford found that a $1 increase in the corporate tax reduces wages by 92 cents in the long term. This study was conducted by Wiji Arulampalam, Michael P. Devereux, and Giorgia Maffini and studied over 55,000 businesses located in nine European countries over the period 1996-2003:

"We identify this direct shifting through cross-company variation in tax liabilities, conditional on value added per employee. Our central estimate is that $1 of additional tax reduces wages by 92 cents in the long run. The incidence of a $1 fall in value added is smaller, consistent with our wage bargaining model."

A 2015 study by Kevin Hassett and Aparna Mathur found that a 1 percent increase in corporate tax rates leads to a 0.5 percent decrease in wage rates. The study analyses 66 countries over 25 years and concludes that workers could see a greater reduction in wages than the federal government raises in new revenue from a corporate income tax increase:

"We find, controlling for other macroeconomic variables, that wages are significantly responsive to corporate taxation. Higher corporate tax rates depress wages. Using spatial modelling techniques, we also find that tax characteristics of neighbouring countries, whether geographic or economic, have a significant effect on domestic wages."

A 2006 study by William Randolph of the Congressional Budget Office found that 74% of the corporate tax is borne by domestic labor:

"Burdens are measured in a numerical example by substituting factor shares and output shares that are reasonable for the U.S. economy. Given those values, domestic labor bears slightly more than 70 percent of the burden of the corporate income tax."

A 2007 study by Alison Felix estimated that a 1 percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. She concluded that the wage reductions are over four times the amount of collected corporate tax revenue:

"The empirical results presented here suggest that the incidence of corporate taxation is more than fully borne by labor. I estimate that a one percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. The magnitude of the results predicts that the decrease in wages is more than four times the amount of the corporate tax revenue collected."

A 2012 Harvard Business Review piece by Mihir A. Desai notes that raising the corporate tax lands “straight on the back” of the American worker and will see a decline in real wages:

"Because capital is mobile, high tax rates divert investment away from the U.S. corporate sector and toward housing, noncorporate business sectors, and foreign countries. American workers need that capital to become more productive. When it’s invested elsewhere, real wages decline, and if product prices are set globally, there is no place for the corporate tax to land but straight on the back of the least-mobile factor in this setting: the American worker."

Even the left-of-center Tax Policy Center estimates that 20 percent of the burden of the corporate income tax is borne by labor:

"In calculating distributional effects, the Urban-Brookings Tax Policy Center (TPC) assumes investment returns (dividends, interest, capital gains, etc.) bear 80 percent of the burden, with wages and other labor income carrying the remaining 20 percent."

"Democrats would be wise to oppose any tax increase," said Norquist.


Connecticut Won’t Join Regional Gas Tax Scheme, Mass. Withdrawal Vote Takes Step Toward Ballot

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Posted by Dennis Hull on Friday, October 1st, 2021, 5:09 PM PERMALINK

The multi-state double gas tax plan known as the Transportation and Climate Initiative (TCI) faced more setbacks recently. After the Connecticut legislature declined to vote to approve joining the compact earlier this year, they just decided not to consider the initiative during a special session this fall.

Connecticut will join Rhode Island and a cadre of other states that declined to pass enabling legislation for TCI, becoming the latest of the program’s initial 12 member states to get cold feet.

Next door, opponents of TCI in Massachusetts won approval to begin collecting signatures for a ballot measure that would withdraw the state from the climate agreement.

Unlike in Rhode Island and Connecticut, the Bay State legislature never committed to join TCI. Rather, Governor Charlie Baker made the move on his own, provoking intense opposition that ultimately resulted in a successful application for a referendum on the issue. Now it is even more likely that Massachusetts voters will have the opportunity to say no to the TCI gas tax on the ballot next November.

The cap-and-trade initiative would require New England vehicle fuel suppliers to purchase energy “allowances” for CO2 emissions. The number of those allowances will then decrease each year, forcing providers to bid up the price they pay for emissions – an expense that is ultimately passed on to consumers through higher prices at the pump.

Taxpayers would bear the brunt of the $3 billion in revenue the program is anticipated to collect over the next decade.

Vermont Governor Phil Scott, who has debated the merits of TCI for years, is having renewed doubts. “I’m not convinced today that it works for Vermont,” Scott said last month to the New England Council. He continued to express reservations about the climate plan, highlighting its impact on lower-income residents. “I feel good about the direction we’re going, without the need to raise taxes, and certainly not a regressive carbon tax.”

In Massachusetts, the House Speaker Pro Tempore has proclaimed a similar sentiment, calling it a “regressive tax” on working class families.

TCI member states will experience rising gas prices and major fuel shortages as a direct result of the new tax. Low-income residents will suffer the most as gas prices skyrocket by up to 38 cents per gallon – a problem compounded by their inability to afford an electric vehicle.

The TCI program now faces an uphill battle to become reality. Only Washington, D.C now remains a guaranteed member of the pact. Dozens of community members and state senators in Stratford, CT pushed back at a “Stop the Gas Tax” rally earlier this month. Even environmental groups are lobbying against the agreement, including the Sierra Club, which cited TCI’s projected 26% reduction in carbon emissions as “too weak.”

The approval of the Massachusetts petition and Connecticut’s decision not to consider TCI legislation this month offer hope for drivers. Fuel consumers in the Northeast deserve better than state-imposed fuel shortages and crippling new taxes on rising gas prices.

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Democratic Governor Opposes Biden's New Tobacco Taxes

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Posted by Dennis Hull on Friday, October 1st, 2021, 4:55 PM PERMALINK

Kentucky Governor Andy Beshear has finally found a tax hike that he doesn't like. Beshear warned President Joe Biden last week that new federal taxes proposed by members of their party would cause "significant, severe, and quick loss of jobs in the remaining Kentucky tobacco industry, especially in Hopkinsville where much of the product is processed." 

Vaping products are already taxed substantially by state governments at the producer level. Rates vary from 5% of the wholesale price in South Carolina to 95% in Minnesota, where research indicated that the high excise tax deterred 32,400 people from quitting cigarettes. Producers are hit hard by that tax, with state and local governments collecting $20 billion in total tobacco tax levies in 2019. Last year, states collected between $1 and $10 million on vaping products alone. 

The new tax will also lead to disastrous economic consequences for retailers and family-owned tobacco shops in Kentucky. In addition to eliminating 295 jobs, the tax hike is projected to reduce wages by $11.6 million. Vape shops – deemed "essential businesses" during the pandemic – are often operated by diverse, first-generation owners and families. The hefty new tax will lower the demand for e-cigarettes and drive many smaller shops out of business. 

Meanwhile, sales revenue will drop by $20.7 million across nearly 4,700 tobacco retailers in the state, more than half of which are single-owner operations. Ironically, state and local governments will also experience reduced tax revenue since nicotine purchases fuel more than a third of total sales at convenience stores across the state. 

If these new taxes are ultimately successful, businesses in Kentucky and throughout the country will bear unacceptable financial consequences and consumers will lose access to valuable harm-reduction products. Vapor products are 95% safer than combustible cigarettes, making them a natural alternative for smokers looking to quit. Compared to traditional nicotine replacement therapies like patches and gums, adult smokers are more than twice as likely to quit using an e-cigarette. New federal taxes would significantly reduce the appeal of switching from toxic cigarettes.  

For example, the federal government is actively disincentive vaping with a regressive 2,000% tax hike on e-cigarettes. That's an extra $2.25 per pod of vaping fluid, far higher than the current tax of $1.01 per pack of cigarettes (and higher even than the proposed new cigarette tax of $2.01). Moreover, for many smokers – nearly 75% of whom are from low-income communities – the new tax will make the switch to vaping far less appealing, potentially encouraging them to switch back to dangerous combustible cigarettes.  

Beshear’s opposition to new taxes on vapor products is good news for Kentucky and former smokers across the nation. Other Democratic governors like Governor Roy Cooper  should follow Beshear’s lead and look to better solutions to pay for their spending bill – ones that do not unfairly target law-abiding adult smokers, family-owned tobacco stores, and Kentucky's producers.  

Photo Credit: Office of the Governor, Commonwealth of Kentucky

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House Financial Services Committee Rejects Republicans' Commonsense Amendments  

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Posted by John Scudero on Friday, October 1st, 2021, 2:28 PM PERMALINK

On September 13th, the House Committee on Financial Services, led by Chairwoman Maxine Waters (D–Calif.), held a markup to deliberate the committee’s section of the $3.5 trillion budget reconciliation bill. Sadly, the bill as reported out of the committee authorizes billions of dollars in unnecessary expenditures for flawed public housing programs, and increases the reach of the federal government by subsidizing down payments for mortgages.     

In a now all–too–common show of partisanship, the Democrat–led committee rejected nearly every Republican–proposed amendment, seemingly without regard for substance. The top ten most absurd exclusions have been compiled in this blog post.  

 

Republican Amendments that Democrats Rejected: 

 

1. Democrats Reject Transparency Measures  

Congressman Andy Barr's (R–Ky.) amendment would have prevented the appropriation of $5,000,000 for the U.S. Council on Homelessness until the Council restored public access to documents on its website. What the Democrats found so offensive about the freedom of previously–available information, we have no idea. 

 

2. Democrats Dismiss the Need for Housing Quality Standards 

Congressman William Timmons (R–S.C.) introduced an amendment that would have guaranteed the quality of construction and maintenance standards for housing projects, under the threat of withholding federal funding for any project found to be in violation of guidelines. It would even empower renters to withhold rent money if landlords did not follow said standards. The second provision is particularly odd for the Democrats to strike down, given their hostility towards landlords.   

  

3. Democrats Disregard Affordable Housing Home Inspections 

Congressman John Rose (R–Tenn.), much like Rep. Timmons, put forward an amendment to codify annual, in–person inspections of housing units to guarantee their maintenance in accordance with existing federal law.  

  

4. Democrats Decline to Prioritize First Responders for Housing  

Congresswoman Ann Wagner (R–Mo.) intended to elevate first responders in their applications for housing and rental aid for service to their communities as paramedics, firemen, or policemen. One might think that such service should afford them greater benefits, but apparently the Democrats disagree.  

 

5. Democrats Ignore Veterans’ Need for Affordable Housing  

Congressman Anthony Gonzalez’s (R–Ohio) amendment sought to coordinate affordable housing efforts with the Veterans Affairs Secretary as a means of publicizing the program to those who have served in our country’s armed forces. Unlike Rep. Wagner’s proposal, it does not seek to prioritize veterans, but merely intended to make them aware that housing assistance is available for their use.

 

6. Democrats Oppose Amendment to Withhold Funding from Groups Already in Financial Jeopardy 

Congressman Bill Huizenga (R–Mich.) thought that it would be silly to give federal funding to organizations or local governments that are unable to adequately manage their finances. The Democrats, unable to manage their own finances, obviously do not see a problem with this.  

 

7. Democrats Vote Down Amendment to Oversee Allocation of Funding and Ensure Its Proper Use 

Congressman Tom Emmer (R–Minn.) suggested that the oversight of millions of taxpayers’ dollars, to ensure their proper use, would be a sensible addition to the resolution, as well as a stipulation that a violation of rules would result in a forfeiture of the money previously allocated.  

  

8. Democrats Refuse to Cap Excessive Development Costs 

Rep. Barr further proposed a development cost cap of $750,000 per unit for new housing projects, and the reimbursement of any development expenses that exceed this limit to the federal government.  

  

9. Democrats Strike Amendment to Prohibit False Statements on Application Forms 

Congressman Van Taylor (R–Texas) believed that fraud should be illegal. The Democrats didn't seem to mind. 

 

10. Democrats Abandon Amendment to Prevent Housing Development in Areas of Toxic Waste 

Rep. Rose did not think it best that low–income renters be housed in areas in and around locations listed on the National Priorities List, which catalogues areas contaminated by hazardous waste in the United States. To that end, he even included a provision that efforts be made to relocate them elsewhere, away from any threat to their health. The Democrats, now used to the noxious swamp that is their home in Washington, found such an idea unthinkable.   

 

Photo Credit: Gage Skidmore


New Jersey Companies Will Face Higher Taxes Than China and Europe if Dem Bill Passes

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Posted by John Kartch on Friday, October 1st, 2021, 12:45 PM PERMALINK

New Jersey companies will get stuck with higher taxes than communist China if the Democrats' reconciliation bill is enacted.

The Democrats' reconciliation bill will saddle New Jersey with a combined federal-state corporate tax rate of 35% vs. communist China's 25%.

The bill will also put New Jersey companies at a competitive disadvantage vs. Europe: The European average corporate tax rate is 19%.

New Jersey is home to 16 Fortune 500 companies, which provide jobs to thousands of New Jersey families.

"As the country tries to recover from a once-in-a-century pandemic, New Jersey's congressional Democrats must explain why they want to stick residents with higher taxes than China and Europe," said Grover Norquist, president of Americans for Tax Reform.

The Democrats' $3.5 trillion bill will impose the largest tax increase since 1968. It will raise individual income taxes, small business taxes, corporate taxes, and capital gains taxes.

If passed, the combined federal-state capital gains tax rate for New Jersey residents would be 42.55% vs. China's 20%.

The burden of the corporate tax rate hike will be borne by workers in the form of lower wages, and by households in the form of higher prices. Higher corporate tax rates will also raise utility bills.

The non-partisan Joint Committee on Taxation recently affirmed in congressional testimony that the corporate tax rate hike will fall on "labor, laborers."

Testifying before the House Ways & Means Committee, JCT Chief of Staff Thomas A. Barthold said:

"Literature suggests that 25% of the burden of the corporate tax may be borne by labor in terms of diminished wage growth."

WATCH:

Economists across the political spectrum agree that workers bear the brunt of corporate tax increases. And 25% is on the very low end.

According to Stephen Entin of the Tax Foundation, labor (or workers) bear an estimated 70 percent of the corporate income tax. He wrote in 2017:

"Over the last few decades, economists have used empirical studies to estimate the degree to which the corporate tax falls on labor and capital, in part by noting an inverse correlation between corporate taxes and wages and employment. These studies appear to show that labor bears between 50 percent and 100 percent of the burden of the corporate income tax, with 70 percent or higher the most likely outcome."

A 2012 paper at the University of Warwick and University of Oxford found that a $1 increase in the corporate tax reduces wages by 92 cents in the long term. This study was conducted by Wiji Arulampalam, Michael P. Devereux, and Giorgia Maffini and studied over 55,000 businesses located in nine European countries over the period 1996-2003:

"We identify this direct shifting through cross-company variation in tax liabilities, conditional on value added per employee. Our central estimate is that $1 of additional tax reduces wages by 92 cents in the long run. The incidence of a $1 fall in value added is smaller, consistent with our wage bargaining model."

A 2015 study by Kevin Hassett and Aparna Mathur found that a 1 percent increase in corporate tax rates leads to a 0.5 percent decrease in wage rates. The study analyses 66 countries over 25 years and concludes that workers could see a greater reduction in wages than the federal government raises in new revenue from a corporate income tax increase:

"We find, controlling for other macroeconomic variables, that wages are significantly responsive to corporate taxation. Higher corporate tax rates depress wages. Using spatial modelling techniques, we also find that tax characteristics of neighbouring countries, whether geographic or economic, have a significant effect on domestic wages."

A 2006 study by William Randolph of the Congressional Budget Office found that 74% of the corporate tax is borne by domestic labor:

"Burdens are measured in a numerical example by substituting factor shares and output shares that are reasonable for the U.S. economy. Given those values, domestic labor bears slightly more than 70 percent of the burden of the corporate income tax."

A 2007 study by Alison Felix estimated that a 1 percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. She concluded that the wage reductions are over four times the amount of collected corporate tax revenue:

"The empirical results presented here suggest that the incidence of corporate taxation is more than fully borne by labor. I estimate that a one percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. The magnitude of the results predicts that the decrease in wages is more than four times the amount of the corporate tax revenue collected."

A 2012 Harvard Business Review piece by Mihir A. Desai notes that raising the corporate tax lands “straight on the back” of the American worker and will see a decline in real wages:

"Because capital is mobile, high tax rates divert investment away from the U.S. corporate sector and toward housing, noncorporate business sectors, and foreign countries. American workers need that capital to become more productive. When it’s invested elsewhere, real wages decline, and if product prices are set globally, there is no place for the corporate tax to land but straight on the back of the least-mobile factor in this setting: the American worker."

Even the left-of-center Tax Policy Center estimates that 20 percent of the burden of the corporate income tax is borne by labor:

"In calculating distributional effects, the Urban-Brookings Tax Policy Center (TPC) assumes investment returns (dividends, interest, capital gains, etc.) bear 80 percent of the burden, with wages and other labor income carrying the remaining 20 percent."

"Democrats would be wise to oppose any tax increase," said Norquist.


New York Companies Will Face Higher Taxes Than China and Europe if Dem Bill Passes

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Posted by John Kartch on Friday, October 1st, 2021, 11:45 AM PERMALINK

New York companies will get stuck with higher taxes than communist China if the Democrats' reconciliation bill is enacted.

The Democrats' reconciliation bill would saddle New York with a combined federal-state corporate tax rate of 31.8% vs. communist China's 25%.

The bill will also put New York companies at a competitive disadvantage vs. Europe: The European average corporate tax rate is 19%.

New York is home to 53 Fortune 500 companies, which provide jobs for thousands of New York households.

"As the country tries to recover from a once-in-a-century pandemic, New York's congressional Democrats must explain why they want to stick residents with higher taxes than China and Europe," said Grover Norquist, president of Americans for Tax Reform.

The Democrats' $3.5 trillion bill will impose the largest tax increase since 1968. It will raise individual income taxes, small business taxes, corporate taxes, and capital gains taxes.

If passed, the combined federal-state capital gains tax rate for New Yorkers would be 42.7% vs. China's 20%.

The burden of the corporate tax rate hike will be borne by workers in the form of lower wages, and by households in the form of higher prices. Higher corporate tax rates will also raise utility bills.

The non-partisan Joint Committee on Taxation recently affirmed in congressional testimony that the corporate tax rate hike will fall on "labor, laborers."

Testifying before the House Ways & Means Committee, JCT Chief of Staff Thomas A. Barthold said:

"Literature suggests that 25% of the burden of the corporate tax may be borne by labor in terms of diminished wage growth."

WATCH:

Economists across the political spectrum agree that workers bear the brunt of corporate tax increases. And 25% is on the very low end.

According to Stephen Entin of the Tax Foundation, labor (or workers) bear an estimated 70 percent of the corporate income tax. He wrote in 2017:

"Over the last few decades, economists have used empirical studies to estimate the degree to which the corporate tax falls on labor and capital, in part by noting an inverse correlation between corporate taxes and wages and employment. These studies appear to show that labor bears between 50 percent and 100 percent of the burden of the corporate income tax, with 70 percent or higher the most likely outcome."

A 2012 paper at the University of Warwick and University of Oxford found that a $1 increase in the corporate tax reduces wages by 92 cents in the long term. This study was conducted by Wiji Arulampalam, Michael P. Devereux, and Giorgia Maffini and studied over 55,000 businesses located in nine European countries over the period 1996-2003:

"We identify this direct shifting through cross-company variation in tax liabilities, conditional on value added per employee. Our central estimate is that $1 of additional tax reduces wages by 92 cents in the long run. The incidence of a $1 fall in value added is smaller, consistent with our wage bargaining model."

A 2015 study by Kevin Hassett and Aparna Mathur found that a 1 percent increase in corporate tax rates leads to a 0.5 percent decrease in wage rates. The study analyses 66 countries over 25 years and concludes that workers could see a greater reduction in wages than the federal government raises in new revenue from a corporate income tax increase:

"We find, controlling for other macroeconomic variables, that wages are significantly responsive to corporate taxation. Higher corporate tax rates depress wages. Using spatial modelling techniques, we also find that tax characteristics of neighbouring countries, whether geographic or economic, have a significant effect on domestic wages."

A 2006 study by William Randolph of the Congressional Budget Office found that 74% of the corporate tax is borne by domestic labor:

"Burdens are measured in a numerical example by substituting factor shares and output shares that are reasonable for the U.S. economy. Given those values, domestic labor bears slightly more than 70 percent of the burden of the corporate income tax."

A 2007 study by Alison Felix estimated that a 1 percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. She concluded that the wage reductions are over four times the amount of collected corporate tax revenue:

"The empirical results presented here suggest that the incidence of corporate taxation is more than fully borne by labor. I estimate that a one percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. The magnitude of the results predicts that the decrease in wages is more than four times the amount of the corporate tax revenue collected."

A 2012 Harvard Business Review piece by Mihir A. Desai notes that raising the corporate tax lands “straight on the back” of the American worker and will see a decline in real wages:

"Because capital is mobile, high tax rates divert investment away from the U.S. corporate sector and toward housing, noncorporate business sectors, and foreign countries. American workers need that capital to become more productive. When it’s invested elsewhere, real wages decline, and if product prices are set globally, there is no place for the corporate tax to land but straight on the back of the least-mobile factor in this setting: the American worker."

Even the left-of-center Tax Policy Center estimates that 20 percent of the burden of the corporate income tax is borne by labor:

"In calculating distributional effects, the Urban-Brookings Tax Policy Center (TPC) assumes investment returns (dividends, interest, capital gains, etc.) bear 80 percent of the burden, with wages and other labor income carrying the remaining 20 percent."

"Democrats would be wise to oppose any tax increase," said Norquist.


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