If Tester votes for a corporate income tax rate increase, he will have to explain why he just increased your utility bills
If President Biden and Sen. Jon Tester raise the corporate tax rate, Montana households and businesses will get stuck with higher utility bills. Democrats plan to impose a corporate income tax rate increase to 28%, even higher than communist China's 25%.
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 across the country worked with officials to pass along the tax savings to customers.
As noted in a 2018 Montana Public Service Commission Release:
The Montana Public Service Commission voted unanimously to approve an agreement for Montana-Dakota Utilities’ electric business to refund to consumers the benefits they received from the Tax Cuts and Jobs Act. The agreement, or Stipulation, calls for a $1.5 million consumer refund as a result of the TCJA.
NorthWestern Energy passed along their savings to Montana customers as well:
The tax savings stem from the Republican Tax Cuts and Jobs Act, which Congress passed in December and was signed into law by President Donald Trump. Federal corporate tax rates fell from 35 percent to 21 percent.
Regulated utilities like NorthWestern cannot pocket the savings, which must be shared with ratepayers, who also pay the utilities' taxes. NorthWestern has about 345,000 customers in Montana.
NorthWestern is proposing that its natural gas customers receive direct refunds for the entire $3.154 million in tax breaks associated with the utility’s natural gas business. The company’s electric customers would receive half of the $10.8 million in tax breaks associated with NorthWestern’s electric business. Half the money would be spent removing hazard trees that pose a fire or outage risk.
“With what we proposed, for a natural gas customer, it would be about $1.18 a month. An electricity customer would be 67 cents per month,” said Butch Larcombe, NorthWestern spokesman. – April 3, 2018 Billings Gazette article excerpt
Conversely, a vote for a corporate income tax rate hike is a vote for higher utility bills right as the USA is trying to recover from the pandemic.
Sen. Tester would be wise to stay away from tax increases.