Americans for Tax Reform congratulates taxpayer protection pledge signers Glenn Youngkin, Winsome Sears, and Jason Miyares on winning their nominations for executive office in Virginia earlier this week.  

Youngkin, Sears, and Miyares secured the Republican nomination for Governor, Lieutenant Governor, and Attorney General, respectively. This is excellent news for taxpayers in the Commonwealth, as all three candidates have made a written commitment to Virginians that, if elected, they will “oppose and veto any and all efforts to increase taxes.” 

By making this commitment in writing, voters can make the important distinction between Youngkin, Sears, and Miyares and their radical, tax-hiking opponents like former Gov. Terry McAuliffe.  

McAuliffe disingenuously promotes himself as a pro-business Democrat, but he has a history of promoting a radical-liberal, tax-and-spend agenda. During his term between 2014-2018, McAuliffe proposed Virginia’s first ever $100 billion budget. Included in that budget was Medicaid expansion funded by a hospital bed tax hike. Additionally, a month before leaving office, McAuliffe released a proposal for Northern Virginians to pay $65 million in higher taxes on real estate sales, hotel stays, and wholesale gasoline.  

More recently, as part of his campaign announcement in December 2020, McAuliffe unveiled a plan for billions in new spending. Unless checked at the ballot box this fall, it is almost certain that his allies in the General Assembly would follow his lead. Thankfully, Virginia taxpayers have allies like Youngkin, Sears, and Miyares have vowed to do the opposite. Grover Norquist, President of Americans for Tax Reform, released the following statement:  

“Congratulations to Glenn Youngkin, Winsome Sears, and Jason Miyares for winning their respective Republican nominations for executive office in Virginia. I commend all of them for making it crystal clear to voters that there will be no tax increases under their watch if elected.” 

“Richmond leadership, led by Terry McAuliffe, has crippled the Commonwealth with several tax hikes in recent years. Taxpayers deserve an ally in the executive branch, now more than ever, who will not raid their bank accounts. I am confident that Youngkin, Sears, and Miyares will focus on making government more efficient, so Virginia becomes a more attractive place to live, invest, and do business.” 

With Youngkin, Sears, and Miyares committing themselves to oppose and veto any and all tax increases, Virginia has the unique opportunity to elect a Governor, Lieutenant Governor, and Attorney General who will retire the Commonwealth’s tax-and-spend agenda.  

Congressman Jodey Arrington (R-Texas) today released a letter signed by 55 members of Congress in opposition to efforts to raise taxes on American energy producers.

The letter was signed by 55 members of Congress including House Republican Whip Steve Scalise (R-La.) and House Republican Ways and Means members Devin Nunes (R-Calif.), Ron Estes (R-Kan.), Kevin Hern (R-Okla.), Mike Kelly (R-Pa.), Carol D. Miller (R-W.Va.), Adrian Smith (R-Neb.), Jason Smith (R-Mo.), Lloyd Smucker (R-Pa.), and Brad Wenstrup (R-Ohio). 

President Joe Biden has proposed repealing  oil and gas tax “subsidies” as part of his “infrastructure” plan. However, many of these provisions are part of the ideal tax code and if repealed would result in discriminatory tax treatment for oil and gas businesses that would threaten jobs and drive up costs for working families and small businesses.

As the letter notes, the Left is trying to deny oil and gas businesses that same tax treatment that every other industry receives:  

“While oil and gas, like many U.S. industries, will suffer from broad sweeping tax increases, they are also being singled out, targeted, and denied the same tax treatment that is available to every industry in the U.S. economy.” 

Specifically, Democrats are pushing to eliminate provisions like the deduction for Intangible Drilling Costs (IDCs), which allows independent producers to immediately deduct business expenses related to drilling such as labor, site preparation, repairs, and survey work. As the letter explains, IDCs are neither unique nor lavish tax breaks for the oil and gas industry: 

“IDCs are not credits, loopholes, or subsidies. They are ordinary and necessary deductions, and a far cry from the lavish tax credits flowing to wealthy green energy investors and electric vehicle owners. Our tax code is designed to levy taxes on net profits, not on dollars used for operational costs or capital expenditures. Every business since the inception of the tax code, has used cost recovery provisions.”

The oil and gas sector supports 11 million high-paying manufacturing jobs. President Biden repeatedly talks about creating millions of high-paying manufacturing jobs. However, by pushing tax hikes on oil and gas taxpayers, Biden would be taking aim at 11 million existing high-paying manufacturing jobs. Biden should be focused on policies that will create more jobs, not proposals that threaten existing jobs.

The Biden tax hikes could also increase costs for families and small businesses. As Rep. Arrington notes, the oil and gas industry supplies nearly 70 percent of the United States’ energy needs and has kept prices low and accessible for millions of families. In fact, household energy costs have dropped by an average of 15 percent in the last decade.

The oil and gas industry has also ensured the U.S. has energy independence, which helps our national security. The industry provides a key input for critical products such as fertilizers, pharmaceuticals, medical supplies, and a host of other pivotal technologies. 

Biden’s effort to use the tax code to discriminate against oil and gas taxpayers should be rejected. Rep. Arrington and other members of Congress should be applauded for their efforts to push back against this tax hike and for setting the record straight that the oil and gas industry has been a driving force for economic growth, American innovation, and increased quality of life for all Americans.

The COVID-19 Pandemic has taken a sledgehammer to the American economy. This past Friday, the Bureau of Labor Statistics reported that last month only 266,000 jobs were created, falling over 86% below some estimations of a 2,000,000-plus increase in job growth.

The last thing that the government should do is threaten work opportunities for millions of American working families. But that’s exactly what Biden’s Labor Secretary Marty Walsh is doing with his attempts to force Americans into an employer-employee relationship with a boss. Walsh disingenuously hid his aggressive support of forced worker reclassification during his Senate confirmation hearing. 

Flexible work arrangements are vital for hard working households which must accommodate school schedules and the caretaking of family members. Americans are increasingly finding such opportunities through freelance work. Particularly after the pandemic 58% of individuals who started remote work as freelancers are thinking about continuing that career. Biden’s DOL wants to dictate this choice to Americans by eliminating the freedom to work as a freelancer or independent contractor.

The Biden administration wants to impose nationwide the California “ABC” test designed to force companies to hire freelancers under a W-2 classification. Businesses refused to hire and chose to fire Californian freelancers. Independent contractors realize the threat of this law, as over 60% of independent contractors anticipate losing 76% or more of their business if they had to be hired as employees instead.

Any theory predicting a complete migration of work from freelance to employee status has already proven to be mythical. Instead of a migration, we will see an elimination of work opportunities. We cannot afford to rip the opportunities of the unemployed away when they need a flexible source of income.

As small businesses with only a couple of employees frequently work with independent contractors, limiting this classification will destroy small businesses. To add to any personal financial struggles, 74% of small business owners have taken on debt to stay afloat during the pandemic.

That’s why small businesses fear the prospect of a national ABC test. 45% of small businesses say they will be put out of business without the ability to work with independent contractors. They also recognize the necessity of independent contractors in this moment, as 73% of small business owners believe that freelancers are necessary for surviving the COVID-19 economic crisis.

A tragic number of small businesses have closed during the pandemic. Owners should not have to dismantle their business to meet the whims of the labor-union-controlled DOL chief.

Nationalizing the ABC Standard will be a death blow to a fragile economy.

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, Idaho 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%. This does not even include state corporate income taxes, which average 4 - 5% nationwide.

Customers bear the cost of corporate income taxes imposed on utility companies. Corporate income tax cuts drive utility rates down, corporate income tax hikes drive utility rates up.

Electric, gas, and water companies must get their billing rates approved by the respective state utility commissions. When the 2017 Tax Cuts and Jobs Act cut the corporate income tax rate from 35% to 21%, utility companies worked with officials to pass along the tax savings to customers, including at least five Idaho utilities. The savings take the form of either a rate reduction, or, a reduction to an existing/planned rate increase.

Working with the Idaho Public Utility Commission, Idaho Power, Intermountain Gas, Suez Water Idaho Inc., Avista, and Rocky Mountain Power passed along tax savings to their customers.

Idaho Power: As noted in this April 23, 2018, Idaho Public Utility Commission Document: 

On April 12, 2018, Idaho Power Company filed a Settlement Stipulation and Motion to Approve Settlement Stipulation. The Company, Commission Staff, and the Industrial Customers of Idaho Power signed the Settlement Stipulation to enable Idaho Power to provide its customers with approximately $33.9 million in benefits under a new tax law that decreased the Company's corporate tax rate and expenses.

Intermountain Gas: As noted in this May 22, 2018 Idaho Public Utility Commission Document:

On December 22,2017, the President signed into law the Tax Cuts and Jobs Act of 2017 ("TCJA"). Effective January 1,2018, the TCJA decreased the federal corporate tax rate from 35 percent to 21 percent. In response, the Commission opened this multi-utility case to investigate whether to adjust the rates of certain utilities that benefit from the reduced tax rate. See Order No. 33965. The Commission directed all affected utilities-including the Company-to immediately account for the tax benefits as a regulatory liability, and to report on how the tax changes affected them, and how resulting benefits could be passed on to customers. See id. at l-2. 

The Company filed its report on March 23,2018. In its report, the Company proposed using the 2016 test year from its last rate case (NT-G-16-02) to calculate the benefits from the TCJA. Using a2016 test year would have resulted in a $4,966,895 rate decrease. 

A settlement conference was held at the Commission offices on May 7,2018. Representatives of Intermountain, Alliance of Western Energy Consumers, and Commission Staff (collectively, the "Parties") attended this meeting. Through discussions and compromise, the Parties agreed to the proposed Settlement Stipulation. 

On May 10, 2018, Intermountain filed Settlement Stipulation, which was signed by all Parties. The Settlement Stipulation, if approved, would result in the Company returning to customers, S5,111,303 of tax benefits the Company has realized under the TCJA, on a 2017 normalized basis. Furthermore, the deferred liability on the Company's books would be credited back to customers as part of the Company's next Purchased Gas Cost Adjustment ("PGA").

Suez Water Idaho Inc.: As noted in this May 22, 2018 Idaho Public Utility Commission Document:

The Company filed its report on March 29,2018. In it, the Company proposes to reduce base rates by $2,722,791, or about 5.60A, to account for the reduction in corporate tax rates and associated changes to the revenue conversion factor. The Company has hired an outside consulting firm to assist in a detailed review of its income tax records in order to verify the balances of the regulatory liabilities subject to normalization (plant-related) as well as deferred tax liabilities that are unprotected (non plant-related). Thus, the Company did not propose any changes related to revaluing or amortizing deferred tax liabilities, preferring to wait to address the deferred tax liabilities in a general rate case, after the detailed review has been completed. 

Avista: As noted in this May 11, 2018 Idaho Public Utility Commission Document: 

The Parties agree that Avista will reduce its Idaho base rates by $ 13.74 million (5 3%) for electric service, and $2.556 million (61%) for natural gas service. The Company will return these amounts to customers through Tariff Schedules 72 (electric) and 172 (natural gas) until the next general rate case when the tax benefits will be incorporated into base rates. The Parties agree to spread these permanent tax benefits (rate credits) on a uniform percent of base revenue basis for both electric and natural gas. The rate credit within each service schedule will be a uniform cents per kWh (electric) and therm (natural gas) to the volumetric block rates by schedule. The monthly service charge for each schedule will remain unchanged. Staff supports this method of rate spread and rate design because it generally matches how costs are being recovered from customers. 

The permanent reduction consists to two components, the tax rate change and the excess accumulated deferred federal income tax (ADFIT) amortization.

Rocky Mountain Power: As noted in this June 15, 2018 Idaho Public Utility Commission document:

State regulators have approved a rate decrease for customers of Rocky Mountain Power, reflecting the benefits of the Tax Cuts and Jobs Act of 2017 and changes to the corporate income tax rate at the state level.

The Idaho Public Utilities Commission’s decision reduces rates by about 1 percent. 

The change took effect June 1 and is the result of a Commission decision in January that ordered all utilities to report the impact of the tax law.

A main feature of the tax law that took effect Jan. 1 was to reduce the federal corporate tax rate from 35 percent to 21 percent. Shortly thereafter, Idaho Governor C.L. “Butch” Otter signed into law House Bill 463, reducing the state’s corporate tax rate from 7.4 percent to 6.925 percent.

Conversely, a vote for a corporate income tax rate hike is a vote for higher utility bills as households try to recover from the pandemic.

Many small businesses operate on tight margins and can't afford higher heating, cooling, gas, and refrigeration costs. President Biden should withdraw his tax increases.