Sen. Joe Manchin (D-W.Va.) lied about the Tax Cuts and Jobs Act while speaking in Davos, Switzerland on Monday. Manchin tried to claim the Trump tax cuts were “regressive.”
Manchin is wrong, and in pushing tax increases he is violating his tax pledge to his constituents.
Here are the facts, according to the latest official IRS data.
26% tax cut for West Virginians making between $25k – $50k. Thanks to the Tax Cuts & Jobs Act — also known as the Trump tax cuts — West Virginia households with adjusted gross income between $25,000 and $50,000 saw their average federal income tax liability drop from $2,190 in 2017 to $1,783 in 2019, a 26% reduction in federal income tax liability.
24.8% tax cut for West Virginians making between $50k – $75k. West Virginia households with adjusted gross income between $50,000 and $75,000 saw their average federal income tax liability drop from $5,348 in 2017 to $4,268 in 2019, a 24.8% reduction in federal income tax liability.
23% tax cut for West Virginians making between $75k – $100k. West Virginia households with adjusted gross income between $75,000 and $100,000 saw their average federal income tax liability drop from $8,720 in 2017 to $7,064 in 2019, a 23% reduction in federal income tax liability.
Just a 2.9% tax cut for West Virginians making over $1 million. Contrary to Manchin’s dishonest assertions, middle income West Virginians saw a significantly greater tax cut than those earning over $1 million. West Virginia households earning over $1 million saw their federal income tax liability drop just 2.9%.
Official data from the Congressional Budget Office also shows that high-earning Americans pay a greater share of taxes than before enactment of the Trump tax cuts.
In other words, the Tax Cuts and Jobs Act actually made the tax code more progressive, though you won’t hear Manchin admit it.
18,320 WV households are no longer stuck paying the Obamacare mandate tax. The TCJA zeroed out the Obamacare individual mandate tax penalty effective 2019. In 2017, 22,960 West Virginia households paid the Obamacare individual mandate tax penalty. 20,940 (91%) households earned less than $75,000. 18,320 households paid the Obamacare individual mandate tax penalty in 2018. 16,180 households (88%) earned less than $75,000.
186,230 WV households are benefiting from TCJA’s expanded child tax credit. The TCJA doubled the child tax credit from $1,000 to $2,000. 187,660 WV households took the child tax credit in 2019 including 180,710 households earning less than $200,000. 186,230 households took the child tax credit in 2018 including 179,600 households earning less than $200,000.
739,000 WV households are benefiting from TCJA’s doubled standard deduction. The TCJA doubled the standard deduction from $12,000 to $24,000 for taxpayers filing jointly and $6,000 to $12,000 for single filers. 723,830 WV households took the standard deduction in 2018 including 712,380 households earning less than $200,000. 739,300 households took the standard deduction in 2019 including 722,600 households earning less than $200,000.
20% tax deduction for WV small businesses. The TCJA created a new, 20% deduction for small businesses organized as passthrough entities (LLCs, sole proprietors, S-corporations, partnerships). 71,030 WV taxpayers claimed the small business deduction in 2019 including 61,630 taxpayers earning less than $200,000. 62,510 taxpayers claimed the small business deduction in 2018 including 54,390 taxpayers earning less than $200,000.
Utility Bill Savings: If not for TCJA, utility bills would be even higher today. Utility companies pay the corporate income tax and must build the tax burden into the billing rates. Higher tax rate = higher bills. Lower tax rate = lower bills. See WV citations in the list below. A national compilation can be found here and local media coverage here.
Manchin wants to raise the combined federal-state corporate income tax to a rate much higher than the Europe average of 19%. Such rate increases will make the U.S. less competitive and will further increase utility bills for WV households.
West Virginia businesses cite Trump tax cuts as a driver of new job creation, business expansion and pay increases:
Eagle Manufacturing (Wellsburg, West Virginia) – Creating new jobs and purchasing new equipment:
The company traditionally has sought to buy used equipment at low prices when replacement of machinery was necessary, according to Trimmer.
“Because of that tax break, we can invest and buy our next machines,” he said. “My department is now looking to buy a $2 million machine, rather than a 1990 classic. It will pay for itself in a short manner of time.”
Trimmer said the company is about to sign some government contracts that will put Eagle cabinets and metal products on the next generation of U.S. naval destroyers.
This could result in as many as 25 jobs being created, he said. – May 3, 2018, The Intelligencer article excerpt
Doss Enterprises (Jane Lew, West Virginia) – Job creation, pay raises and equipment purchases:
The benefits of the Tax Cuts and Jobs Act are evident just from looking around the Doss facility, Capito said.
“When I saw their board of (new) hires, there must have been 20 or 30 names on there, just April and May,” she said.
The company has chosen to reinvest its tax savings in its employees and into new equipment, Capito said.
“All of the employees are seeing (it) in their paychecks,” she said. “(Doss) has also bought some new equipment with his money, which is a great investment. He’s going to be hiring at least another 30 people.” – May 2, 2018, WVNews.com article excerpt
Warwood Tool (Wheeling, West Virginia) – New product line:
The tax cuts have given the company and its customers enough optimism for the future that Warwood Tool is developing a new line of products. – May 3, 2018 The Intelligencer article excerpt
Panhandle Cleaning and Restoration (Wheeling, West Virginia) – New trucks and equipment:
While Panhandle is often called upon for clean-up services after national disasters, Contraguerro told Jenkins the company relies on its day-to-day operations. Their employees, trucks and equipment are called to local homes and businesses each day following water-line breaks or other incidents, and Panhandle doesn’t wait for hurricanes to hit, he said.
The company plans to invest the money it receives from the tax cuts into more trucks and equipment.
“We will be reinvesting in the business,” he told Jenkins. “There is a huge benefit to reinvesting.” — May 3, 2018 The Intelligencer article excerpt
Davis Trust Company (Elkins, West Virginia) – 3% across the board pay raises (on top of existing compensation structure.)
Potomac Edison (Martinsburg, West Virginia) – The utility is passing on tax savings to customers:
‘More than 85,000 Potomac Edison customers in the Eastern Panhandle should see lower bills in the coming weeks thanks to federal tax reforms adopted in December.
The West Virginia Public Service Commission announced Friday that it approved rate reduction settlements for utility companies totaling almost $85 million annually, starting next month. – August 24, 2018 Herald Mail Media
West Virginia American Water (Charleston, West Virginia) – The utility is passing along tax savings on to customers:
West Virginia American Water Company announced a settlement plan last week which — if approved by the PSC — would result in an average savings of $3.77 a month for water and sewer customers in the state.
“The recent federal tax reform will save our customers an estimated $4.6 million annually, so we are passing these savings on to our customers beginning next month,” Brian Bruce, president of West Virginia American Water. – August 21, 2018 Bluefield Daily Telegraph excerpt
Appalachian Power Co. (Milton, West Virginia) – the utility is passing along tax reform savings to customers.
Appalachian Power Company saved $235 million dollars from the federal tax cuts and the company is proposing passing the money back to its customers in a variety of ways.
The multi-pronged proposal is in a filing with the state Public Service Commission due Wednesday. The PSC is requiring all utilities to tell it their tax cut savings and what they plan to do with it.
West Virginia Consumer Advocate Jackie Roberts told MetroNews the money clearly belongs to the customers.
“They (the utilities) had taxes in their rates and now the taxes in their rates have significantly decreased—so they shouldn’t be able to keep collecting and keeping those higher taxes in their rates,” Roberts said.
Appalachian Power Company Communications Director Jeri Matheney agrees–the $235 million Appalachian Power will save belongs to its customers.
“It is customer money. What we propose to do is provide a method to keep rates as stable as possible over the long term and as much as possible eliminate the need for rate increases,” Matheney said.
The Appalachian Power distribution proposal for West Virginia customers includes:
–$131 million to completely offset the company’s fuel and vegetation control program funding request that was part of an April filing with the PSC
–$19 million reduction in the company’s base rate case filed earlier this month (taking the $115 million request down to $96 million)
–$51 million to reduce next year’s fuel recovery cost rate case
–$1 million for a pilot economic development grant program
–$30.1 million to return to customers over the next three years – May 30, 2018, MetroNews article excerpt