Louisiana Must Act to Improve Public Safety
With an incarceration rate that has increased by 35 percent over the past 20 years, resulting in annual costs to taxpayers as high as $700 million Louisiana jails people at a rate nearly double the national average. This upcoming legislative session, Louisiana lawmakers have an opportunity to turn a corner and implement conservative, data-driven policies that will improve public safety while lowering the rate of incarceration.
After referencing the best research in the field and a year long period of extensive stakeholder discussion, The Louisiana Justice Reinvestment Task force developed 26 policy recommendations aimed at protecting citizens while getting a better return on public safety dollars. The goal of these smart data driven recommendations is to address the state drivers of high prison admissions and lengthy stays that have created a bloated system that is complicated, often inaccessible to victims, and creates barriers for both those convicted of crimes and those in administering the sentencing system.
Recidivism in Louisiana is extremely high where 1 in three people return to prison within just three years. The Task Force also found that Louisiana sends people to prison for nonviolent, drug and property crimes at twice the rate of neighboring South Carolina and three times the rate of Florida. These states notably have identical crime rates to Louisiana.
House Speaker Tyler Barras has said “A lot of our low-level drug and property crime is driven by addiction...We can save millions and also have less crime by focusing prison beds on those who pose a more serious public safety threat and making smart investments in probation and drug treatment for nonviolent crimes.”
Recommendations from the task force chart a data driven course for comprehensive reform and address high admissions for probation failures and nonviolent crimes and growth in those prisoners serving longest terms. They allow greater discretion for judges and parole boards and the reforms similar to the task force recommendations have reduced crime and imprisonment in other states. These reforms ensure clarity and consistency in sentencing, focus prison beds on those who pose a serious public safety threat and strengthen community supervision and paths to successful reentry.
States such as Texas, Georgia and Alabama have adopted similar practices to make their justice systems more effective and sustainable and Louisiana is in good company in following their lead.
"Our criminal justice system needs major reformation," said Department of Public Safety and Corrections Secretary Jimmy LeBlanc, chairman of the blue ribbon panel. "It's costing taxpayers a ton of money and not getting outcomes. I've never seen such bipartisan support and call for reform”
There is no defense for maintaining the status quo with that same bipartisan, business, and public support for spending fewer taxpayer dollars on ineffective prisons and dedicating those funds to alternatives that have a proven track record of results. We are encouraged by this progress and hope to see Louisiana shed the dubious honor of the incarceration capital of the world.
More from Americans for Tax Reform
Oklahoma Residents Will Get Stuck with Even Higher Utility Bills Due to Biden Corporate Tax Rate Hike
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, Oklahoma households and businesses will get stuck with even 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 Oklahoma utilities. The savings take the form of either a rate reduction, or, a reduction to an existing/planned rate increase.
Working with the Oklahoma Corporation Commission, Oklahoma Gas and Electric Company, Public Service Company of Oklahoma, CenterPoint Energy Oklahoma Gas, Oklahoma Natural Gas and Arkansas Oklahoma Gas passed along tax savings to their customers.
Oklahoma Gas and Electric Company: As noted in this June 19, 2019 Oklahoma Corporation Commission document:
The Oklahoma Corporation Commission today gave unanimous approval to a settlement in the Oklahoma Gas and Electric (OG&E) rate case that is the largest single rate reduction for an Oklahoma electric utility.
Commission Chairman Dana Murphy called the agreement a win-win for all concerned.
“The settlement will cut rates by $64 million and refund to customers $18.5 million in tax savings from federal tax reform,” Murphy said. “The timing of this couldn’t be better, as the savings will begin at a time when electric bills are the highest because of the summer heat.
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Under the agreement, the average residential customer will receive a one-time tax credit and monthly rate reduction totaling an estimated $18.70 in July. Subsequent average monthly rate savings will be approximately $4.40.
Oklahoma Natural Gas: As noted in this January 9, 2019 The Oklahoman excerpt:
An order approved Tuesday by the Oklahoma Corporation Commission might help take a little chill off the state's winter nights.
The order requires Oklahoma Natural Gas to pass through $22.7 million in credits to customers to compensate them for taxes collected as part of their bills the company didn't have to pay.
Officials said those credits will compensate for the lowered tax liabilities that the utility enjoyed in 2018 after Congress approved and President Donald Trump signed the Tax Cuts and Jobs Act of 2017.
Officials said the order requires the utility, a division of investor-owned ONE Gas, to provide $11.7 million in credits to its customers in Oklahoma in February. They said that represents the amount the utility over-collected from customers in 2018 that didn't account for its lower tax liabilities.
It also requires Oklahoma Natural Gas to lower its rates by $11 million to compensate customers for ongoing reduced tax liabilities, going forward. That reduction will remain in place until the company files its next rate case for consideration.
Officials said the average ratepayer will see a $15 reduction on February's bill and will see smaller reductions in subsequent bills this year.
Public Service Company of Oklahoma: As noted in this August 1, 2018 Oklahoma Corporation Commission document:
The Oklahoma Corporation Commission today unanimously approved an order directing Public Service Company of Oklahoma (PSO) to return approximately $428 million in deferred excess income taxes to customers.
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“This is money that is owed customers as a result of the Tax Cuts and Jobs Act that took effect January 1,” said Murphy. “The Commission issued an order in the first week of January for all utilities to begin tracking the resulting over collection of taxes for refund to customers. I commend the company for moving promptly to follow the order."
CenterPoint Energy Oklahoma Gas: As noted in this March 13, 2020 Oklahoma Corporation Commission document:
CenterPoint Energy Resources Corp., d/b/a CenterPoint Energy Oklahoma Gas ("CenterPoint Oklahoma or the "Company"), hereby applies for an order of the Oklahoma Corporation Commission (the "Commission"): (a) approving the calculations presented by the Company according to requirements of the Company's Performance Based Rate Change Plan (the "PBRC Plan") for the calendar year ended December 31, 2019, and related customer bill credits; (b) approving additional customer credits for Protected and Unprotected Excess Deferred Income Tax ("EDIT") arising from the Tax Cuts and Jobs Act of 2017 ("TCJA"); and (c) approving proposed base rate adjustments due to the Company's Energy Efficiency ("EE") true up adjustment and its EE incentive.
In this proceeding, CenterPoint Oklahoma will present calculations from Test-Year 2019 to support an aggregate credit to customers of approximately $2 Million. These credits arise expressly from the PBRC Plan. Customers would not be receiving such a benefit under the traditional rate process. The PBRC Plan provides that the $2 Million in credits will be returned to individual customers though monthly billings over a twelve-month period, to begin as soon as the Commission issues a final order in this Cause.
Arkansas Oklahoma Gas: As noted in this December 30, 2020 Oklahoma Corporation Commission document:
THE COMMISSION THEREFORE ORDERS that the reduction in federal corporate tax rates resulting from the Tax Cuts and Jobs Act provides reduced tax expenses and new excess tax reserves, which were available to be returned to customers
THE COMMISSION FURTHER ORDERS that its previous order in this proceeding, Order No. 671980, required AOG to record a deferred liability to preserve tax savings until a review of AOG’s rates in its next-filed PBR change plan proceeding, to include consideration of tax savings.
THE COMMISSION FURTHER FINDS that competent, sworn statements have been submitted and are hereby admitted as evidence that AOG complied with Order No. 671980 in Cause No. PUD 201900028, its next PBR proceeding filed after the entry of Order No. 671980. Through consideration of tax savings in that proceeding and in Cause No. PUD 202000051, the effects of the Tax Cuts and Jobs Act of 2017 on customer rates have therefore been addressed.
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.
Democratic House Ag Committee Chairman David Scott Tells Biden His Tax Hikes "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."
Congressional Democrats are getting an earful from their constituents opposed to tax increases and in turn, the members are expressing their tax-hike reservations to President Biden.
This week House Agriculture Committee Chairman David Scott (D-Ga.) wrote a letter to Biden noting his strong opposition to Biden's proposal to take away stepped-up basis:
Dear President Biden,
As Chairman of the House Agriculture Committee, I applaud the historic investments you propose in the American Jobs Plan and American Family Plan, which are critical as we continue to recover from the COVID-19 pandemic. However, 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. I look forward to working with you as negotiations continue. We must ensure that we protect our family farmers, ranchers and small businesses that keep our rural communities alive.
Sincerely,
David Scott
Chairman
A PDF copy of the letter can be found here.
See Also:
Small Business on Threat of Biden Tax Hikes: "We have already started a hiring freeze."
Biden Plan to Impose Second Death Tax Will Harm US Economy and Family-Owned Businesses
Biden Corporate Tax Rate Hike Will Raise Your Utility Bills
ALABAMA
Alabama Residents Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/alabama-residents-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
ALASKA
Alaska Residents Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/alaska-residents-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
ARIZONA
Arizonans Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/arizonans-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
CONNECTICUT
Connecticut Residents Will Get Stuck with Even Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/connecticut-residents-will-get-stuck-even-higher-utility-bills-due-biden-corporate-tax-rate-hike
DELAWARE
Delaware Residents Will Get Stuck with Even Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/delaware-residents-will-get-stuck-even-higher-utility-bills-due-biden-corporate-tax-rate-hike
GEORGIA
Georgia Residents Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/georgia-residents-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
IDAHO
Idaho Residents Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/idaho-residents-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
ILLINOIS
Illinois Residents Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/illinois-residents-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
INDIANA
Indiana Residents Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/indiana-residents-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
IOWA
Iowans Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/iowans-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
KANSAS
Kansas Residents Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/kansas-residents-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
KENTUCKY
Kentucky Residents Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/kentucky-residents-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
LOUISIANA
Louisiana Residents Will Get Stuck with Even Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/louisiana-residents-will-get-stuck-even-higher-utility-bills-due-biden-corporate-tax-rate-hike
MAINE
Maine Residents Will Get Stuck with Even Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/maine-residents-will-get-stuck-even-higher-utility-bills-due-biden-corporate-tax-rate-hike
MASSACHUSETTS
Massachusetts Residents Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/massachusetts-residents-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
MICHIGAN
Michigan Residents Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/michigan-residents-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
MINNESOTA
Minnesotans Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/minnesotans-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
MISSOURI
Missouri Residents Will Get Stuck with Even Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/missouri-residents-will-get-stuck-even-higher-utility-bills-due-biden-corporate-tax-rate-hike
MONTANA
Montanans Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/montanans-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
NEW HAMPSHIRE
New Hampshire Residents Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/new-hampshire-residents-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
NEW JERSEY
New Jersey Residents Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/new-jersey-residents-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
NORTH CAROLINA
North Carolina Residents Will Get Stuck with Even Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/north-carolina-residents-will-get-stuck-even-higher-utility-bills-due-biden-corporate-tax-rate-hike
NORTH DAKOTA
North Dakotans Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/north-dakotans-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
OHIO
Ohioans Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/ohioans-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
PENNSYLVANIA
Pennsylvanians Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/pennsylvanians-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
RHODE ISLAND
Rhode Island Residents Will Get Stuck with Even Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/rhode-island-residents-will-get-stuck-even-higher-utility-bills-due-biden-corporate-tax-rate-hike
SOUTH CAROLINA
South Carolina Residents Will Get Stuck with Even Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/south-carolina-residents-will-get-stuck-even-higher-utility-bills-due-biden-corporate-tax-rate-hike
TENNESSEE
Tennessee Residents Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/tennessee-residents-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
TEXAS
Texas Residents Will Get Stuck with Even Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/texas-residents-will-get-stuck-even-higher-utility-bills-due-biden-corporate-tax-rate-hike
UTAH
Utah Residents Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/utah-residents-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
VERMONT
Vermont Residents Will Get Stuck with Even Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/vermont-residents-will-get-stuck-even-higher-utility-bills-due-biden-corporate-tax-rate-hike
VIRGINIA
Virginians Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/virginians-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
WASHINGTON, D.C.
Washington, D.C. Residents Will Get Stuck with Even Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/washington-dc-residents-will-get-stuck-even-higher-utility-bills-due-biden-corporate-tax-rate-hike
WEST VIRGINIA
Manchin's Corporate Tax Hike Will Stick West Virginians with Higher Utility Bills https://www.atr.org/west-virginians-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
WISCONSIN
Wisconsin Residents Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike https://www.atr.org/wisconsin-residents-will-get-stuck-higher-utility-bills-due-biden-corporate-tax-rate-hike
Podcast: How States Can Stop Wasting Time & Start Improving Safety
In this month's episode of From the Swamp to the States, PEW experts Tracy Velasquez and Connie Utada join to talk about new data showing opportunities many states are missing to improve probation practices, and public safety along the way.
More from Americans for Tax Reform
New Jersey Has a Chance to Cut Taxes for Once
It may be hard to believe after three years of Gov. Murphy hiking taxes, increasing spending and taking on debt like there is no tomorrow, but there is a chance to cut taxes in New Jersey.
As the legislature wrangles with the state budget, there is a proposal to reduce the tax on beverages with less than 9.9% alcohol-by-volume, like seltzers, to match the rate on beer products. Really, this policy just taxes alcohol content the same for products that are very similar.
It likely makes sense to any consumer that these products would be taxed the same, but the current rates are wildly different. Non-beer products are taxed at a rate of $5.50 a gallon, compared to 12-cents a gallon for beer.
That is a more than 450% difference, a significant tax cut. It is necessary given the absurdly high tax burden on seltzers, ciders and similar drinks is making it difficult for producers to make ends meet.
This is a win for businesses and New Jersey consumers. It’s a rare chance for Jersey residents to pay less for products thanks to the tax rate going down instead of the usual up. Adding to the very welcome surprise is that the bill has bipartisan support, and has been introduced by Senate President Steve Sweeney.
Republican Senator, and Taxpayer Protection Pledge-signer, Anthony Bucco said at a hearing, “It's not often, as a Republican, we see bills coming through to cut taxes… So, I understand your concerns, but whenever we get a chance to cut the taxes here in the state, we like to do that.”
New Jerseyans should spring at this opportunity, and urge their legislators to support cutting the tax on these low alcohol content beverages.
You can find your Senator and Assembly member contact info at the state legislature’s website, let them know you support cutting taxes on canned cocktails.
Photo Credit: wikipedia
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New Poll Finds Voters Concerned About Unemployment Benefits, Inflation, Tax Increases, and Excessive Spending
Voters are concerned about unemployment benefits, inflation, the impact of tax increases, and excessive spending, according to a recent Harvard CAPS and Harris poll.
Despite President Biden repeatedly claiming that his policies have overwhelming public support, this is yet another poll that questions this narrative.
82 percent of voters say that there are a lot of unfilled jobs, with 76 percent of voters saying that a lot of people are staying on unemployment in order to make more money.
This sentiment is correct. At the current federal unemployment supplement level of $300, 37 percent of workers make more on unemployment than at work. In this way, the federal government is offering over one-third of the workforce an incentive not to work.
88 percent of voters say they are concerned about increased inflation. When asked what causes inflation, the top three answers were "Massive government spending," "Significant amounts of money being injected in the economy by the Federal Reserve," and "Uncontrollable government deficits."
Despite the Biden administration’s assurances that inflation should not be a concern, voters are still deeply concerned about it. After all, inflation is spiking. In April, consumer prices increased 4.2 percent overall. Used car and truck prices rose by about 21 percent, with a whopping 10 percent increase in April alone. Further, lumber prices have increased by 124 percent in 2021.
With so many voters attributing inflation to increased spending, it’s likely that concerns about Biden’s $6 trillion budget proposal will grow.
Most voters are concerned about the negative effects of raising taxes, with 64 percent saying an increase in the corporate income tax would increase consumer costs and 69 percent saying that raising taxes could cost the economy jobs and growth.
Again, voters are correct. Biden’s tax hikes would eliminate one million jobs in the first two years and would eliminate 600,000 jobs per year over the first decade, according to a study by economists John W. Diamond and George R. Zodrow. As noted by Stephen Entin of the Tax Foundation, workers bear nearly 70 percent of the cost of a corporate tax through lower wages and fewer jobs.
Further, according to a recent National Bureau of Economic Research paper, 31 percent of the corporate tax rate is borne by consumers through higher prices of goods and services.
An overwhelming majority of voters are worried about how Biden's $5 trillion infrastructure and families plan will impact them:
- 82 percent of voters are concerned that it will lead to higher taxes down the line.
- 79 percent are concerned that the plan will lead to economic uncertainty.
- 80 percent of voters are concerned it will lead to runaway inflation.
- 77 percent are concerned it will lead to lower economic growth.
- 76 percent of voters are concerned that it will negatively impact their family finances.
Photo Credit: U.S. Embassy Jerusalem
New York Takes Federal Bailout, Raises Taxes Anyways
Now every American is paying for the government malpractice taking place in Albany, NY.
Gov. Andrew Cuomo and lawmakers in Albany reached an agreement on a $212 billion budget this session that is riddled with absurd levels of new spending fueled by $4 billion in tax hikes. This comes after New York state received $12.6 billion in federal coronavirus stimulus funds.
In the approved budget, individual New Yorkers who earn more than $1 million a year and couples earning more than $2 million will see their personal income tax rate rise from 8.82% to 9.65%. Two new brackets, for those with income over $5 million and $25 million, would have an income tax rate of 10.3% and 10.9%, respectively. These taxes increases will make the combined city and state income tax burden on residents in New York the highest in the nation.
Additionally, there is a corporate franchise tax hike for businesses with more than $5 million in annual income, jumping from 6.5% to 7.25%.
Critics have warned that these tax hikes would cost the city much-needed revenue if residents and businesses look to take refuge in lower-tax states and cities. In fact, Citizens Budget Commission president Andrew Rein accused lawmakers of failing to “appropriately leverage the opportunity provided by the infusion of funds” from President Biden’s $1.9 trillion COVID-19 relief package. Translation: the state got a huge bailout that Cuomo lobbied endlessly for and yet still raised taxes recklessly.
In effort to counter critics who say that the tax hikes will cause big earners and companies to leave New York, Cuomo claimed that there will be an “overall net” reduction if federal lawmakers restore the deduction for state and local taxes, or SALT.
However, this if false. “There is absolutely no assurance that the SALT cap will be repealed, unless federal rates are jacked up higher than [President] Biden has already proposed,” said EJ McMahon of the Empire Center think tank.
In his state of the state address in January 2021, Gov. Cuomo called on President Biden for this bailout, citing it as “basic economic justice and economic prudence.” Apparently, Gov. Cuomo’s definition of basic economic justice and economic prudence is to provide financial means for pork barrel spending.
One line item in the approved budget, standing at $4,605,000, is for “services and expenses of contractual payments related to the retention of professional football in Western New York.” This translates to using state money for the Buffalo Bills football team, which so happens to be Gov. Cuomo’s favorite.
Another $108 million payout goes towards the Kingsbridge Armory in the Bronx. This facility, which has been dormant for decades, is being considered to become a hockey complex.
Hundreds of cultural, agricultural, and community groups are also set to receive money in the budget, including:
- $45,000 to The Belle Harbor Yacht Club for “building improvements.”
- $125,000 to the Christmas Tree Farmers Association to “promote Christmas trees.”
- $50,000 to The Hop Growers of New York to promote New York hops.
- $500,000 to the Brooklyn Alliance, Inc
- $500,000 to the Queens Chamber of Commerce
- $25 million to the Securing Communities Against Hate Crime Program
- $250,000 to Cornell University for the “Cannabis Workforce Initiative”
Tens of millions of dollars in spending are also listed as “lump sum” appropriations in the budget. In other words, the public will never precisely know where the money is going.
Gov. Cuomo is continuing to prove himself to be disingenuous, as he claims to need money from the federal government to help with budget deficits, but then turns around to tax the highest earners – and job creators – in the state.
Cuomo’s stance here could also be a sign he’s capitulated to the Democrat supermajority in the state legislature, but is trying to keep up appearances. The Democrat legislative caucus is more radical than the Governor, and continues to hunt for even more tax hikes and more job-killing, economy-crushing policy, like a double gas tax and so-called anti-trust rules that would allow the state to police businesses activity.
Photo Credit: Zack Seward
More from Americans for Tax Reform
Maine Residents Will Get Stuck with Even Higher Utility Bills Due to Biden Corporate Tax Rate Hike
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, Maine households and businesses will get stuck with even 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 Maine utilities. The savings take the form of either a rate reduction, or, a reduction to an existing/planned rate increase.
Working with the Maine Public Utilities Commission, Central Maine Power Company, Emera Maine, Northern Utilities, Maine Natural Gas and Maine Water Company passed along tax savings to their customers.
Central Maine Power Company: As noted in this June 21, 2018, State of Maine Public Utilities Commission Central Maine Power Company Annual Compliance Filing:
CMP will decrease distribution rates by $16,429,187 to reflect distribution revenue requirement savings associated with the Tax Act. The decrease associated with the Tax Act -4- includes the one-time deferral of Tax Act benefits of $5,641,368 associated with the period January 2018 – June 2018.
Emera Maine: Maine Public Utilities Commission document:
On October 2, 2017, Emera Maine filed a petition for an increase its distribution rates (Docket 2017-00198). Emera Maine requested a $10 million, or 12%, increase in its overall distribution revenues. In late December 2017, while the Company’s rate request was still pending before the Commission, Congress passed the Tax Cuts and Jobs Act (TCJA) which became law on January 1, 2018. Among its provisions, the TCJA reduced the corporate tax rate from 35% to 21%. The Commission required that Emera Maine update its rate request to reflect the impact of the TCJA on its proposed rates. By Order dated June 28, 2018, the Commission authorized the Company to increase its delivery rates by $4.5 million or 5.32% as of July 1, 2018. The Commission’s decision is based on a cost of equity of 9.35%. The approved rates reflect the current federal tax rate of 21%. The Commission’s decision also required that Emera Maine defer the difference between rates based upon the 34% and 21% tax rate for the period of January 1, 2018 to June 30, 2018. By Order dated September 11, 2018, the Commission granted in part a Motion for Reconsideration from the Company, deciding to reopen the question of how the savings associated with the TCJA for the January 1, 2018 through June 30, 2018 time period should be calculated. This issue is being considered in another docket (Docket 2018-00271) in conjunction with the review of the excess deferred income taxes that resulted from the TCJA.
Northern Utilities: Maine Public Utilities Commission document:
On May 31, 2017, Northern Utilities requested approval for an increase in distribution rates of $6.5 million. After incorporating the effect of the TCJA and the Commission’s determinations in the case, the Commission ordered Northern to decrease its rates by $87,243 as of March 1, 2018. The Commission did not approve any rate increase associated with the adjustments presented by the Company to its test year operating revenues.
Maine Natural Gas: As noted in this Maine Public Utilities Commission document:
On January 11, 2018, the Commission opened an investigation into the impact of the TCJA on Maine Natural Gas and whether any rate adjustments are warranted (Docket 2018-00005). The Company’s rates were adjusted to reflect the effects of the TCJA in its annual rate adjustment filing (Docket 2018-00057).
Maine Water Company: As noted in this March 15, 2019 Maine Public Utilities Commission document:
According to the Stipulation, only five MWC Divisions – Camden and Rockland, Freeport, Oakland, Skowhegan, and Millinocket – will experience significant reductions in their overall federal income tax expenses as a result of the Tax Act. MWC has agreed to record a monthly regulatory liability for the reduction in its federal income tax expense beginning January 1, 2018, and continuing through the next applicable rate case, plus carrying costs set at MWC’s last allowed weighted average cost of capital (WACC) for those five Divisions. This accumulated liability will flow back to ratepayers over a period to be decided in each Division’s next general rate case, which will be filed no later than March 1, 2022. MWC will also record excess water infrastructure surcharge revenues, including carrying costs set at their last allowed WACC, from the same five Divisions beginning January 1, 2018, and continuing until the effective date of any adjustments made to the water infrastructure surcharge in the division’s next water infrastructure surcharge filing. With respect to the four Divisions that will not book a regulatory liability but have a decrease in water infrastructure surcharge revenue as a result of the Tax Act, the Company will make a full adjustment of the water infrastructure surcharge revenue in those Divisions’ next water infrastructure surcharge filing.
Additionally, MWC will treat excess deferred income taxes (EDITs) as an adjustment to rate base in each Division. The total EDIT balance at the time of a general rate filing will be allocated to the Division seeking to increase rates using the allocation method developed in Docket No. 2017-00163 and shown in Appendix B to the Stipulation. Adjustments generated by the Tax Act related to plant assets will be returned to ratepayers using the average rate assumption method as required by the Internal Revenue Service. MWC will amortize non-plant asset EDITs over a 10-year period beginning at the conclusion of each Division’s next general rate case.
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.
Senator Cornyn Introduces Bill Protecting Taxpayers from IRS Abuse of Power
Senator John Cornyn (R-Texas) last month introduced The Small Business Taxpayer Bill of Rights Act of 2021, legislation that would enact several important reforms to the Internal Revenue Service (IRS) so that small businesses and individuals are better protected from efforts by the agency to abuse its power.
Strengthening taxpayer protections is especially important now, as President Joe Biden has introduced his plan to increase IRS funding by $80 billion, leading to 87,000 additional IRS agents, more audits, and intensified enforcement. Biden’s plan would also include provisions giving the IRS heightened power to access taxpayers’ private information, including mandating banks and third-party payment providers (like Venmo and PayPal) to report money going in and out of taxpayers’ accounts to the agency.
ATR urges lawmakers to support and co-sponsor The Small Business Taxpayer Bill of Rights Act of 2021.
Strengthens Taxpayer and Small Business Protections
Senator Cornyn’s bill contains numerous provisions to ensure the IRS is acting in the best interests of taxpayers.
First, this bill would ban any secret conversations between IRS employees and the IRS Independent Office of Appeals when discussing a taxpayer’s case. Violating this prohibition would be a fileable offense, in order to ensure the independence of the IRS Office of Appeals, which was created to protect taxpayers.
In the same vein, the bill prohibits the IRS Independent Office of Appeals from raising new issues or theories during a conference with taxpayers and the IRS.
Under this law, the IRS would need taxpayers’ consent before allowing IRS Counsel or compliance officials to participate in Appeals conferences, eliminating IRS policy that otherwise makes Appeals a more contentious proceeding.
The bill would also add more protection against unnecessary lien foreclosures on a taxpayer’s home and increases the penalties for IRS agents who violate taxpayer rights by committing extortion, fraud, or bribery.
Protects Taxpayers from IRS Improper Targeting
The bill also contains reforms to protect taxpayers from being targeted by the IRS. For instance, Sen. Cornyn’s legislation makes it a fireable offense to apply disproportionate scrutiny to any applicant applying for tax-exempt status based on any ideology expressed in the name or purpose of the organization.
The legislation also requires the Inspector General to review and consult with the IRS on any criteria it uses to select tax returns for audit, assessment, or any heightened scrutiny or review, to ensure that the criteria does not discriminate against taxpayers on the basis of race, religion, or political ideology.
These provisions are especially important, given the IRS has a history of improperly targeting taxpayers. Most notably, the Obama IRS was caught unfairly denying conservative groups non-profit status ahead of the 2012 election.
Lois Lerner’s political beliefs led to tea party and conservative groups receiving disparate and unfair treatment when applying for non-profit status, according to a detailed report compiled by the Senate Finance Committee.
Because of Lerner’s bias, only ONE conservative organization was granted tax exempt status over a period of more than three years:
“Due to the circuitous process implemented by Lerner, only one conservative political advocacy organization was granted tax-exempt status between February 2009 and May 2012. Lerner’s bias against these applicants unquestionably led to these delays, and is particularly evident when compared to the IRS’s treatment of other applications, discussed immediately below.”
At the time, the Obama administration assured the American people that justice would be served. Nonetheless, not a single person was punished for this outrageous targeting.
Since this scandal, the IRS has done little to prevent similar abuses. A 2016 report by the Government Accountability Office warned that the IRS may still be unfairly targeting non-profits “based on an organization’s religious, educational, political, or other views.”
Compensates Taxpayers for IRS Abuses
Sen. Cornyn’s legislation also ensures taxpayers are protected from crushing litigation fees. For instance, instead of small business owners being forced to choose between paying the IRS for a frivolous claim or paying a lawyer to defend them, this bill would allow owners to petition for attorney’s fees when a court determines the IRS’s legal actions are not substantially justified.
If the IRS recklessly or intentionally disregards the law, its own regulations, or illegally releases tax information, the bill increases the amount of civil damages a taxpayer can be rewarded and provides more time that small businesses can be awarded.
The legislation also compensates individuals for “No Change” National Research Program (NPP) Super-Audits, which are audits that occur randomly and require every single line item of return and proof of each item in detail. The bill would allow a deduction for those who undergo the super-audit, particularly because they must represent themselves.
Lowers Compliance Burden for Taxpayers
To allow for a speedier and less costly resolution of audits, the bill creates new alternative dispute resolution procedures to be conducted by an independent, neutral party not employed by the IRS.
Finally, the bill grants small businesses the opportunity to become compliant without going out of business or firing workers when faced with paying a harsh levy.
Under Biden’s plan, legions of new IRS agents will be unleashed for invasive and time-consuming audits of middle-class Americans and small businesses. Even though the IRS hasn’t yet corrected ideological discrimination or blatant incompetence within the agency, the administration still plans to flood the agency with $80 billion and extensive new powers. With this in mind, safeguards against IRS abuses are absolutely necessary.
Senator Cornyn’s Small Business Taxpayer Bill of Rights Act contains numerous important reforms to protect taxpayers against an out of control IRS. If lawmakers are serious about protecting taxpayers from IRS harassment and abuse of power, they should support and co-sponsor this commonsense legislation.
Photo Credit: Gage Skidmore
Biden Plan to Repeal IDCs Threatens Manufacturing Jobs, Raises Energy Costs
President Joe Biden and Congressional Democrats have proposed repealing various tax provisions they describe as “oil and gas subsidies.” Many of these provisions, such as the deduction of intangible drilling costs (IDCs), are not subsidies but are important tax provisions that promote investment, job creation, and growth. Repealing this provision and raising taxes on oil and gas taxpayers is a reckless policy proposal that will threaten manufacturing jobs across the country and raise the cost of energy for American families.
What are IDCs?
IDCs allows independent producers to immediately deduct business expenses related to drilling such as labor, site preparation, repairs, and survey work. As a recent letter led by Rep. Jodey Arrington (R-Texas) and signed by 55 members of Congress explained, 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.”
There are several recent proposals that would repeal IDCs along with a host of other tax provisions for oil and gas. For instance, Senate Finance Committee Chairman Ron Wyden (D-Ore.) recently proposed several tax increases on oil and gas in his “Clean Energy for America Act.” President Joe Biden’s recently released Fiscal Year 2022 budget also calls for repealing these tax provisions as part of his plan to raise taxes on the industry by over $100 billion. Finally, pro-socialist politicians Senator Bernie Sanders (I-Vt.) and Rep. Ilhan Omar (D-Minn.) have introduced legislation with these tax increases.
Repealing IDCs is bad tax policy.
The deduction for IDCs is consistent with immediate expensing offered to all business investments, a policy change instituted in the Tax Cuts and Jobs Act of 2017. Currently, taxpayers can immediately deduct the cost of most assets (those with 20 years or less of depreciable life) in the year they are purchased. This policy incentivizes new investment, leading to greater economic productivity, job growth and higher wages. It also simplifies the tax code by equalizing the tax treatment of new investments with other business expenses such as wages, rent, and healthcare costs.
In the past, many Democrats have recognized that full business expensing is not a loophole, but an important way to promote investment. For instance, former Obama Economic Adviser Jason Furman has long supported full business expensing, and the policy was included in several Obama budgets (albeit as part of a net tax increase).
The Obama White House correctly noted that the provision would help businesses and workers in press releases and fact sheets:
“If a business bought an additional $1 million worth of equipment next year, they would be able to deduct the full $1 million up front, potentially accelerating hundreds of thousands of dollars in tax cuts. That’s real money that businesses… could use to expand or hire new workers right now, and provides a strong incentive to increase investment now, creating even more jobs.”
Repealing IDCs will cost jobs and investment.
IDCs support high-paying American jobs across the country. As noted in a 2014 study by Wood Mackenzie consulting, repealing the immediate deduction for IDCs would cost 265,000 jobs in the long-term. Given that this study was conducted almost a decade ago, it is entirely possible that job losses would be greater if the provision was repealed today.
Repealing IDCs will also reduce investment in the economy by $407 billion in the long-term because businesses will have less cash to invest in new projects. While it would have a significant economic impact, repealing IDCs would raise very little revenue. According to the Joint Committee on Taxation, repeal of IDCs raises $3.5 billion over the next decade. President Biden’s FY 2022 budget assumes repealing IDCs would raise $10.5 billion, which if true, would make it a greater, but still relatively insignificant revenue raiser.
Oil and gas businesses collectively support 11 million high-paying manufacturing jobs. In 2017, these jobs paid an average salary of $102,000, 85 percent higher than the average private sector salary. Given President Biden routinely talks about the need to create millions of new high-paying manufacturing jobs, one would think he would support retaining provisions like the deduction for IDCs. Instead, he wants to repeal these provisions and raise taxes on existing manufacturing jobs.
Repealing IDCs will raise costs and threaten American energy independence.
Biden and Congressional Democrats are proposing this tax increase at a time that energy prices have increased significantly. The cost of gasoline is at a seven-year high and in some parts of the country costs over $4 per gallon. According to the Bureau of Labor Statistics, Gasoline prices have increased by 49.6 percent between April 2020 and April 2021 while oil has increased 37.3 percent.
After being reliant on foreign energy in past decades, the U.S. became a net energy exporter in 2019 and 2020. This achievement helps America’s economy and strengthens national security as we are less reliant on foreign powers for our energy needs. Instead of building on this strengthen, Biden would diminish it, a move that would increase global reliance on hostile nations like Iran and Russia for energy.
Photo Credit: Gino Pezzani
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