EU Takes Aim at Tech Giants with Revamped Digital Tax Proposals
In recent weeks the European Commission has been discussing proposals to raise taxes on digital firms that operate within the European Union. The move is aimed mostly at Google, Apple, Facebook, and Amazon. A number of proposals have been introduced, including revisiting the rules for permanent establishment, tax harmonization to a common corporate tax base, and instituting a turnover tax. Any proposal is likely to receive backlash from low-tax EU member states, eventually leading to procedural hurdles in adopting EU law.
Under current rules, corporations must have a physical presence in a country in order to be subject to that country’s taxing authority. This includes a store-front, warehouse, or processing center. Major digital firms are able to locate in one country and sell goods to consumers in other countries remotely, through the internet. These firms will be subject to corporate tax where they are based (often low tax countries) and not subject to corporate tax in foreign countries where consumers are buying their goods. To counter the incentive for corporations to locate in low tax countries, the EU has proposed revisiting the rules on permanent establishment. New rules would likely move away from requiring a physical presence in the country and instead rely on the sale of goods as a basis for companies being subject to taxation, or a “digital” presence.
Changing the language to redefine permanent establishment is seen as a long-term solution by the EU. In the meantime, more short-term proposals are aimed to stop-gap the loss of tax revenues faced by many higher tax countries. One such proposal is the establishment of a common corporate tax base across EU member states. This would establish a common set of tax rules across the EU that could address issues of permanent establishment and other factors that influence where countries choose to locate their headquarters. This scheme of tax harmonization could ultimately lead to higher rates for many countries, without the vote of their respective legislatures. This imposition of higher taxes through the supranational European Union violates free market principles, as I’ve discussed here.
Another EU proposal is an equalization tax, or turnover tax. This would be a tax on all untaxed or insufficiently taxed income generated from the internet-based business activities of a firm. Traditionally, firms are taxed on their profits, which is their revenue minus costs. This turnover tax would abandon this concept of when to apply tax, and have it applied directly on revenues. This puts smaller firms and firms with smaller margins in peril, as taxes irrespective of their profits could ultimately lead to the taxation of loss-making industries.
Any proposal favored by the European Commission is likely to face stringent opposition from some EU member states. Countries such as Ireland, Malta, and Luxembourg have corporate income tax rates well below the EU average, and will oppose any measure that raises their rates or sees their ability to attract corporations decreased. EU tax law changes require the consent of all 28 member states. This unanimity requirement will be a fierce test of the divide between low tax member nations who wish to maintain their autonomy of their tax rates, and high tax member nations who seek to collect more in revenue from digital firms.
Photo Credit: Stuart Chalmers
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Texas 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, Texas 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 nine Texas utilities. The savings take the form of either a rate reduction, or, a reduction to an existing/planned rate increase.
Working with the Public Utility Commission of Texas, CenterPoint Energy, El Paso Electric Company, Entergy Texas, Oncor Electric Delivery, Quadvest, TXU Energy, Atmos Energy Corp., Southwest Electric Power Company and AEP Texas Inc. passed along tax savings to their customers.
El Paso Electric Company: As noted in this April 2, 2018 Houston Chronicle article excerpt:
El Paso Electric became the first utility in Texas to pass on the benefits of recently enacted corporate tax cuts to their customers by lowering its rates.
El Paso Electric, which serves more than 418,700 customers in Texas and New Mexico, will distribute the $27 million in savings over a year by cutting the average monthly electric bill by about 4 percent. That translates into just under $4 a month for the utility’s average residential customer using 635 kilowatt hours of electricity a month.
El Paso Electric is one of several utilities across the country that have shared the windfall from the corporate tax cuts — which sliced the corporate tax rate to 21 percent from 35 percent — with their customers. In Texas, the Public Utility Commission ordered Texas utilities to calculate their savings and pass them on to ratepayers. In some cases, rates will still go up, but not as much as they might have without the tax savings.
CenterPoint Energy: As noted in this CenterPoint Energy FAQs Sheet:
In order to pass on to customers additional benefits associated with the Tax Cuts and Jobs Act of 2017 (the “TCJA”), on August 1, 2019, CenterPoint Energy (“CNP”) filed with the Texas Railroad Commission and its municipal regulatory authorities rate reduction filings in its Houston and Texas Coast Divisions. The filings follow similar rate reduction filings made by the Company in 2018 to reflect benefits associated with the new federal corporate income tax rate. The rates proposed in the August 1, 2019 filings also include necessary costs to restore service following Hurricane Harvey.
The TCJA refund will be reflected in a customer’s bill as follows:
As a monthly refund over 3 years. Customers will see a separate line item on
their bill called Tax Refund. This refund will begin with bills rendered on or
after January 1, 2020.
Entergy Texas: As noted in this October 26, 2018 Entergy press release:
Entergy Texas, Inc. has reached a settlement agreement with the Public Utility Commission Staff and the intervening parties in its rate case, filed on October 5, 2018. This agreement, pending approval by the Public Utility Commission of Texas, will keep rates low, while continuing to grow the economy by investing in new infrastructure to ensure reliable and cost effective electricity for customers. As part of this plan, Entergy Texas is also passing along substantial savings from federal tax reform directly to its customers. These tax savings, along with investments in infrastructure to reduce outages and improve service, will result in more affordable and reliable energy to customers.
“We are pleased to reach an agreement with the parties in the case that benefits customers and helps ensure reliable and affordable energy for Southeast Texas,” said Sallie Rainer, president and CEO of Entergy Texas. “We are committed to investments that minimize disruptions from outages and give our customers more tools and technology to better control their energy usage.”
Entergy Texas will flow back approximately $200 million in tax savings to customers over a period of up to four years, depending on customer class. This credit will be reflected in a “TCJA Rider” on customer bills. In addition, customer bills will be credited $25 million over a period of up to four years for lower federal tax rates in 2018, which will be reflected in a “Federal Income Tax Credit” Rider. Customers saw these rates in effect on an interim basis starting October 17, 2018. Final implementation of these rates is subject to approval of the settlement by the Public Utility Commission; a ruling from the Commission is expected in the coming months.
Oncor Electric Delivery: As noted in this September 7, 2019 Public Utility Commission of Texas document:
Oncor's annual revenue requirement reduction based on the impacts of the Tax Cuts and Jobs Act of 2017 ("TCJA") shall be $75,042,855 for excess accumulated deferred federal income taxes ("excess ADFIT") and $143,789,502 for annual federal income tax ("FIT') expense, for a total annual revenue requirement reduction of $218,832,357.
Oncor's unprotected excess ADFIT based on the impacts of the TCJA shall be returned to ratepayers over a 10-year amortization period. Signatories reserve the right to seek modification of the amortization period in Oncor's next base-rate case.
Quadvest: As noted by Simon Sequeira, President of Quadvest:
"On behalf of the approximately 30,000 customers Quadvest Utility serves in Southeast Texas, we would like to thank you for your integral part in the development and ultimate passage of the Tax Cuts and Jobs Act of FY2017. The passage of this key piece of legislation has allowed Quadvest to proactively reduce our customers' base water and sewer fees by 26% or almost $90 per year/family."
TXU Energy: As noted in this February 20, 2018 TXU Energy letter:
TXU Energy has been following this proceeding and believes that the Commission has taken a prudent approach to this issue by evaluating each utility's unique situation and working with the utilities to adjust existing base rates via credit, upcoming Distribution Cost Recovery Factors (DCRFs), and Wholesale Transmission Rates that will ultimately flow through the Transmission Cost Recovery Factors (TCRFs).
Given that a significant majority of our retail electric customers have chosen "unbundled" products that directly pass through TDSP charges (including any changes to those charges), the rate adjustments being overseen by the Commission will directly and efficiently flow through to most customers without any additional effort. For the minority of our customers that have chosen "bundled" products, TXU Energy looks forward to working with Commission Staff to evaluate efficient means to provide appropriate value to them.
Atmos: As noted in this January 28, 2019 Denton Record-Chronicle excerpt:
Atmos ratepayers can expect a small, one-time credit on the gas bill next month, a credit meant to settle some of the savings that followed the 2017 corporate tax cut.
Atmos Energy Corp.’s Mid-Texas Division sent a letter to cities across North Texas last week to tell them about its planned distribution of about $5.2 million in tax savings. Residential ratepayers can expect a $4.08 credit with their February bill; and most businesses, a $12.92 credit.
The savings was made possible by the Tax Cuts and Jobs Act of 2017. When the act went into effect on Jan. 1, 2018, it lowered the federal corporate tax rate from 35 percent to 21 percent for Atmos.
Southwest Electric Power Company: As noted in this May 17, 2018 Southwest Electric Power Company press release:
SWEPCO has approximately 184,000 Texas retail customers. All such customers and all classes of customers will be affected by this change. SWEPCO is requesting to change its rates to reflect the impact of the change in federal income tax rates implemented by the Tax Cuts and Jobs Act of 2017, which was passed by Congress late last year. This new federal law reduces the corporate income tax rate from 35% to 21%, and SWEPCO estimates that application of the lower income tax rate will result in an annual approximate $18 million, or 4.9%, overall decrease in base rates for Texas retail customers.
AEP Texas Inc.: As noted in this April 6, 2020 Public Utility Commission of Texas document:
The signatories agreed that, to address the effects of the Tax Cuts and Jobs Act of 2017, AEP Texas will refund a total of $108,020,034, which reflects the following: the difference between the revenues collected under existing rates and the revenues that would have been collected had the existing rates been set using the 21% tax rate enacted under the Tax Cuts and Jobs Act of 2017 until the new rates are implemented; amounts associated with the change in the amortization of protected excess deferred federal income taxes (EDIT) as a result of the Tax Cuts and Jobs Act of 2017 from January 1, 2018 until the date the protected EDIT is included in new rates; and unprotected EDIT associated with the change in tax rates under the Tax Cuts and Jobs Act of 2017.
The amount of $108,020,034 is being refunded through separate riders for distribution and transmission customers. The signatories agreed that AEP Texas will refund $76,531,681 to distribution customers through its proposed income tax refund rider over a one-year period. The rider will be implemented separately for each division. AEP Texas will refund $31,488,353 to transmission customers as a one-time credit through its transmission cost of service.
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.
Norquist Discusses Biden's Destructive Tax Hikes on Bloomberg TV
ATR president Grover Norquist discussed the Biden tax increases on Bloomberg's Balance of Power hosted by David Westin.
Norquist detailed the Biden corporate tax rate increase, the Biden capital gains tax hike, and the questionable spending in the Biden "infrastructure" plan.
Click here or below to watch the interview:
Legislators Give Nebraska Taxpayers Much Needed Tax Relief
Nebraska legislators delivered much-needed tax relief in the Cornhusker state by passing a new corporate income tax cut that will give at least 26 million dollars back to taxpayers.
Nebraska's top income tax rate of 7.8 percent was not competitive. It was the highest of any state in the region. South Dakota and Wyoming do not have any corporate income tax, and states like Colorado and Missouri have some of the nation's lowest rates at 4.5% and 4.0%, respectively. By proactively addressing this issue and cutting corporate rates, Nebraska will become a more competitive place to live, invest, and do business in the years to come.
Grover Norquist, President of Americans for Tax Reform, said the following
"I applaud the Nebraska legislature for correctly identifying its previously uncompetitive corporate tax rate and reducing it this session. This legislation will make Nebraska more viable in the regional economy and make it an even more attractive destination for families and businesses. I urge them to continue seeking more pro-growth tax relief to promote a speedy economic recovery by allowing taxpayers and families to keep more of their hard-earned paychecks."
This rate cut is one of several substantial reforms undertaken by the Nebraska legislature this session. The Legislature also passed new laws that will give property owners in Nebraska the ability to make their voice heard on property taxes in their towns. Truth in Taxation legislation, initially enacted in Utah in 1985, brought Utah's 24th-highest property tax burden in the U.S. down to 43rd for primary residences. High property taxes that local citizens do not support are a sign that accountability is lacking. While more transparency for local governments is excellent, Truth in Taxation demands accountability to taxpayers as well – the key to ensuring tax burdens are kept low through public oversight.
Nebraska's Truth in Taxation law will provide taxpayers with a stronger voice in how local property taxes are decided by:
1. Providing the date, time, and location of all public meetings where property tax increases will be decided.
2.Itemizing how much a property taxpayer's tax bill would rise if the proposed tax increase were approved.
3.Requiring that hearings for property tax increases take place during hours when most taxpayers can attend a public meeting.
Alabama Residents Will Get Stuck with 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, Alabama 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 two Alabama utilities. The savings take the form of either a rate reduction, or, a reduction to an existing/planned rate increase.
Working with the Alabama Public Service Commission, Alabama Power and Alagasco (Spire Inc.) passed along tax savings to their customers.
Alabama Power: As noted in this May 1, 2018 AL.com excerpt:
Alabama Power Company customers will see a reduction in their bills because of the federal income tax cut approved by Congress last year, the Public Service Commission announced at its monthly meeting today.
The reduction in 2018 will be for $257 million, about a 9 percent cut, the PSC said.
The cut requires no action by the PSC, which regulates Alabama Power.
The reduction takes effect in July and continues through December.
The Tax Cuts and Jobs Act, signed into law in December, reduced the federal corporate income tax rate from 35 percent to 21 percent effective Jan. 1, 2018.
The three commissioners, all Republicans, said it was good to see consumers benefit from the tax cuts promoted and signed into law by President Trump.
"This is a great day for Alabama consumers and taxpayers," Commission President Twinkle Andress Cavanaugh said.
The commission approved two requests from Alabama Power related to the income tax cut.
One would allow the company to apply up to $30 million of excess federal deferred income taxes this year to Energy Cost Recovery, a factor in rate-setting.
The other request from Alabama Power was to make several changes to the PSC's method of setting rates, called Rate Stabilization and Equalization, or RSE. The PSC said the changes would enable Alabama Power "to mitigate the credit quality impacts" resulting from the Tax Cuts and Jobs Act and preserve rate stability for customers. The changes would allow Alabama Power to increase the equity share of its capital investment, the PSC said.
In conjunction with that second request, Alabama Power committed to no increases in its base rates through 2020 and to credit customers $50 million next year, the PSC said.
Alagasco (Spire Inc.): As noted in this February 2, 2018 AL.com excerpt:
Spire is giving relief to its Alabama customers in the form of rate decreases as a result of the utility being a beneficiary of the Trump tax plan.
Residential customers in Mobile can expect a 4 percent rate decrease while those in Spire's Central Alabama territory, which covers Montgomery and Birmingham, can expect a 3 percent rate decrease, Spire spokeswoman Jenny Gobble told AL.com Friday. The two territories operate under different tariffs and rate structures, which explains the different rate decreases.
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.
CLEAN Future Act Lays Groundwork for Backdoor Fracking Ban
Buried within the Democrats’ 981-page "climate" bill are provisions that would lay the groundwork for a nationwide fracking ban, threatening American production of oil and natural gas, U.S. energy independence, and affordable energy for consumers.
Section 623 is a federal power grab stripping states of the right to regulate hydraulic fracturing and could empower EPA to impose a nationwide fracking ban through federal regulation of fluids required for hydraulic fracturing.
Rather than allowing states to regulate fluids from hydraulic fracturing as they currently do, Section 623 would "prohibit the underground injection of fluids or propping agents pursuant to hydraulic fracturing operations" unless operators meet testing and data reporting requirements determined by political appointees at the EPA.
Democrats are using the long-debunked and anti-science notion that fracking is an inherent threat to groundwater in order to seize regulatory authority away from states. This provision would break from the Obama EPA's years-long assessment that federal regulation of fracking's impact on water resources was not required.
A resolution co-sponsored by state oil regulators in Texas and North Dakota in response to the CLEAN Future Act urges the Biden Administration and Congress to oppose the CLEAN Future Act on behalf of oil and gas producing states. In the rollout of the resolution, Texas Railroad Commissioner Wayne Christian labeled the CLEAN Future Act as "nothing more than the Green New Deal in lipstick,” that would "effectively federalize regulation of oil and gas, increasing costs to consumers and our national debt, while harming our energy independence and national security.”
Here is text straight from the resolution:
"The CLEAN Future Act would impose redundant and unneeded regulations on oil and gas drilling, hydraulic fracturing, and production operations currently regulated by the States..."
"The CLEAN Future Act contravenes the principle of cooperative federalism by creating significant regulations at the national level that will limit the ability of states to regulate the exploration and production of oil and gas within their jurisdictions."
Section 625 would allow EPA to classify "produced waters" as "hazardous waste" to prevent fracking, contrary to EPA's own 2019 assessment.
Exploration and production wastes have been regulated as non-hazardous wastes under the Resource Conservation and Recovery Act (RCRA) for decades. EPA's most recent assessment in 2019 reaffirmed this determination by concluding “revisions to the federal regulations for the management of exploration, development and production wastes of crude oil, natural gas and geothermal energy under Subtitle D of RCRA are not necessary at this time.”
Yet section 625 ignores these findings and labels the current classification as a "loophole" and an "arbitrary and needless evasion of regulations." The clear intent of Democrats in this section is to provide a pathway forward for political appointees at the EPA to alter the longstanding classification of produced waters from "non-hazardous waste" to "hazardous waste." Doing so would bring American fracking to a standstill as only 800 wells in the U.S. are equipped to handle hazardous waste compared to 180,000 non-hazardous waste wells, according to EPA data.
Wrongly reclassifying produced waters as hazardous waste would overwhelm the industry's capacity to handle hazardous waste and effectively shut down production.
Both of these provisions are attempts to concentrate the regulatory authority of American energy production at the federal level for the purpose of furthering the political Left's anti-fracking crusade.
Americans for Tax Reform urges Members of Congress to oppose the CLEAN Future Act.
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IRS Hasn’t Completed Mandated Complexity Reports in Almost 20 Years
In defiance of federal law, the IRS routinely fails to complete an annual report on ways to reduce tax complexity. The agency has done the report just twice – in 2000 and 2002.
The Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 98) was a law created to reduce corruption in the IRS, improve taxpayer services, and make the agency more efficient. One of the provisions in the RRA is a directive to complete a tax law complexity report every year. These reports are supposed to contain the IRS's specific recommendations on how to make the tax code easier to comply with.
When the agency completed these reports, the recommendations helped Congress make improvements to the tax code, which in turn made the IRS’s job easier.
There is no reason the IRS cannot complete this task. When asked why they were not doing this report in 2015, the agency was unable to provide an answer. When National Taxpayer Advocate Nina E. Olson asked what it would cost to complete the report, the agency replied that it would just take two full time employees working for about a year:
“In response to a request for an estimate of the resources the IRS would need to produce the complexity report, the IRS’s Research, Analysis and Statistics (RAS) function stated that “as an order of magnitude” a paper that examined the relationship between tax complexity and income tax compliance required about two full time employees working for about a year.”
Two employees working on this report would be a wise use of IRS resources.
The text of the RRA clearly spells out that the IRS "shall" complete this report every year and "shall" include recommendations to reduce the complexity of the code and report provisions, that add undue complexity to tax laws, for repeal or modification:
SEC. 4022. TAX LAW COMPLEXITY ANALYSIS.
In general – The Commissioner of Internal Revenue shall conduct each year after 1998 an analysis of the sources of complexity in administration of the Federal tax laws… The Commissioner shall not later than March 1 of each year report the results of the analysis conducted under paragraph (1) for the preceding year to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate. The report shall include any recommendations—
(A) for reducing the complexity of the administration of Federal tax laws; and
(B) for repeal or modification of any provision the Commissioner believes adds undue and unnecessary complexity to the administration of the Federal tax laws.
Meanwhile, IRS employees spend hundreds of thousands of hours per year on union activity.
In fiscal year 2013, IRS employees spent over 500,000 hours on union activity. Somehow, however, they cannot manage the resources to follow the law, particularly a law designed to make life easier for taxpayers.
The IRS has failed to complete this task under both Republican and Democrat administrations. In 1998, when the RRA was passed, lawmakers were attempting to solve corruption and inefficiency that, of course, existed then. It seems, no matter if the IRS is coming from a budget cut or a budget hike, the agency still fails to complete basic tasks.
Photo Credit: Marco Verch Professional Photographer
Wisconsin Residents Will Get Stuck with 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, Wisconsin 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 Wisconsin utilities. The savings take the form of either a rate reduction, or, a reduction to an existing/planned rate increase.
Working with the Public Service Commission of Wisconsin, Alliant Energy, Madison Gas & Electric, Superior Water, Light & Power, We Energies, and Wisconsin Public Service Corporation passed along tax savings to their customers.
Alliant Energy, Wisconsin: As noted in this May 26, 2018 Wisconsin State Journal article excerpt:
The average residential customer of Madison-based Alliant Energy can expect some of the highest amounts back, with a one-time credit of $22.92 on their electric bills and $6.99 for natural gas during the June billing cycle, followed by monthly credits of $4.11 for electricity and $1.15 for natural gas. That totals $40 million in refunds for 2018.
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Alliant said its retail electric costs will rise by a total of $194 million in 2019 and 2020 as it brings on the 700-megawatt, natural gas-fueled West Riverside power plant near Beloit in the second half of 2019.
Alliant’s natural gas expenses are projected to rise $24 million over that period.
But rather than raising customer rates, the utility said it will cut costs via fuel savings and income tax reductions.
Madison Gas & Electric: As noted in this As noted in this May 26, 2018 Wisconsin State Journal article excerpt:
Madison Gas & Electric will return a one-time credit of $9.23 to its residential electric customers and $4.80 to natural gas customers by July 31. After that, electric bills will dip about $1.56 a month and gas bills by about $1 a month in 2018, MGE spokesman Steve Schultz said. That totals about $8 million worth of credits, according to PSC calculations.
The money represents excess taxes the companies have been collecting from ratepayers. Utility rates, set in advance, anticipated a 35 percent corporate tax rate. But Congress, in its tax reform package, lowered the rate to 21 percent.
Superior Water, Light & Power: As noted in this May 29, 2018, Superior Telegram article excerpt:
Residential customers of Superior Water, Light & Power will receive a $31.80 lump-sum credit on July bills as a result of savings accrued from the tax law Congress passed last year, according to an order issued Thursday by the Public Service Commission.
Customers in all categories will receive lump-sum and ongoing credits for each provided service. The largest electrical customer will receive a $61,807 lump sum credit and other non-residential customers will receive lump-sum electric credits varying from $13.70 to $3,106 depending on customer classification, according to the PSC order.
SWL&P estimated its total customer credits this year at $1.322 million.
We Energies: As noted in this April 26, 2018, Milwaukee Journal Sentinel article excerpt:
We Energies electric customers will receive a one-time credit in July and a slight decrease in electric rates in subsequent months from a portion of the savings from the company's lower federal corporate tax rate, state regulators decided on Thursday.
The Public Service Commission determined that 20 percent of the immediate savings from the lower tax rate should be passed on to customers.
The remaining 80 percent of the savings will go toward paying down deferred costs that stood at $424.5 million as of Dec. 31 but that are not included in current rates.
"It will be a win-win for our customers — providing an immediate bill credit while also helping to reduce future rate increases," Cathy Schulze, a We Energies spokeswoman, said in an email.
Wisconsin Public Service Corporation: As noted in this December 19, 2019 Public Service Commission of Wisconsin document:
On March, 23, 2019, WPSC requested Wisconsin jurisdictional revenue increases of $48.6 million (4.9 percent) in 2020 and $48.6 million (4.9 percent) in 2021 for its electric operations and revenue increases of $7.2 million (2.4 percent) in 2020 and $7.1 million (2.4 percent) for its natural gas operations. To accomplish an effective rate increase of 4.9 percent in each year for WPSC’s electric operations (WPSC electric), WPSC sought approval to apply $16 million of unprotected tax benefits resulting from the federal 2017 Tax Cuts and Jobs Act (TCJA) for the benefit of customers in 2020, $21 million of 2018 WPSC deferred revenue sharing benefits to customers in 2020, $7 million of 2018 excess fuel collections in 2020, and another $24 million of unprotected tax benefits in 2021. To accomplish an effective rate increase of 2.4 percent in each year for WPSC’s natural gas operations (WPSC gas), WPSC sought approval to apply $7 million of unprotected tax benefits resulting from the TCJA for the benefit of customers in 2020
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.
ATR Applauds Rep. Van Taylor's Legislation to Safeguard American Taxpayers
Congressman Van Taylor (R-Texas), along with Congressman Lou Correa (D-Calif.), recently introduced H.R. 3364, the “Truth in Taxation Act,” bipartisan legislation that will require all legislation to clearly state if it cuts or increases taxes.
Americans for Tax Reform released a letter in support of this bill. If passed, this bill would ensure transparency, discourage hidden tax hikes within large spending bills, and hold politicians accountable.
Click here or see below to view the letter.
May 24th, 2021
Dear Congressman Taylor:
I write in support of H.R. 3364, the “Truth in Taxation Act,” bipartisan legislation you recently introduced with Congressman Lou Correa (D-Calif.). This bill would prohibit Congress from considering legislation which impacts federal taxes or fees unless it includes a statement explaining such increases or decreases. All members of Congress should support and co-sponsor this legislation.
The Truth in Taxation Act is a simple but important bill that will require all legislation to clearly state if it cuts or reduces taxes. This is a commonsense requirement that will help ensure more transparent lawmaking and prevent members of Congress from sneaking tax hikes into larger pieces of legislation.
The Truth in Taxation Act would prevent lawmakers from hiding away tax increases in 500-page bills, only for both legislators and the American people to find out about it later. After all, Democrats have already done this several times within the first few months of the new administration.
In the COVID-19 “relief” bill, the Democrats snuck in several tax increases, totaling $60 billion. These tax hikes were incorporated at the end of the legislative process, leaving little room for scrutiny and criticism.
It is imperative that there is transparency about the true cost of legislation. Lawmakers should be held accountable for the laws they introduce, vote for, and pass. A lack of accountability can facilitate new tax increases, as politicians can continue treating the American public like an endless jar of cash with no repercussions.
If lawmakers are serious about protecting taxpayers from tax increases, creating a more transparent government, and ensuring the impact of a law is understood before it is signed into law, they should co-sponsor and support your bill, the Truth in Taxation Act.
Onward,
Grover Norquist
President, Americans for Tax Reform
Photo Credit: United States Congress
RSC Budget Calls for Constraints on Spending and Taxpayer Protections
The Republican Study Committee Budget and Spending Task Force, led by Rep. Kevin Hern (R-Okla.) and Chairman Jim Banks (R-Ind.) released its FY2022 Budget.
In addition to nearly $2 trillion in tax cuts for working families and small businesses, the Budget also contains important institutional and constitutional protections for taxpayers, and vital constraints on spending. The Budget’s “Budget Process Reform” section calls for numerous reforms including a Balanced Budget Amendment, a cap on all revenues, and a permanent ban on earmarks.
The RSC Budget constrains federal spending through a Balanced Budget amendment, with the inclusion of taxpayer protections.
Specifically, the Budget calls for the adoption of a federal Balanced Budget Amendment (BBA) that would bar annual spending in excess of 20 percent of Gross Domestic Product (GDP). Importantly, the proposal includes provisions which prevent Congress from relying on tax hikes to balance the budget.
Capping spending at 20 percent requires government to live within its means. This strict spending cap is a significant step towards reining in the size of government and will help protect taxpayers from reckless and unnecessary government spending.
This Balanced Budget Amendment proposal is pro-taxpayer and will help put America on a path towards fiscal responsibility. This will force politicians to address Washington’s rampant spending problem by reducing spending.
The Budget would implement a joint revenue and spending growth cap.
Included in the Budget is a cap on all revenues as a percentage of nominal GDP. If this cap is exceeded, the federal government would be required to refund taxpayers, as the budget explains:
“In the event of a breach of this cap, treasury would be required to refund a percentage cut that equals the over-collected revenues. This refund would go to any person or entity that paid federal taxes and would be related to the total amount of taxes they paid. In this way the mechanism could not be used to force wealth redistribution.”
Many politicians are addicted to reckless, unchecked spending increases. Given this trend, protections are required to prevent wasteful spending and protect the earnings of working families. This cap would limit how much of the nation’s resources the federal government can seize and consume. This provision is especially important because the left's goal is to dramatically increase taxes and spending. President Biden's plan totals nearly $6 trillion in spending.
The Budget also permanently ban earmarks.
Earmarks are congressional provisions, often within large spending bills, directing funds to be spent on specific projects or programs. Funds would often be directed towards specific congressional districts, pressuring members into voting for legislation they wouldn't normally vote for.
Democrats recently brought back earmarks for the first time in a decade in order to gain a new tool to gain support for Biden's multi-trillion-dollar tax hikes and spending plans.
Earmarks are the currency of Congressional corruption and encourage the passing of legislation which was not adequate enough to garner real support. If a bill requires bribes, it simply should not become law.
The most infamous example of an earmark leading to frivolous spending is the “bridge to nowhere,” a project which began in 2005 when some members of Congress from Alaska requested funding to build the Gravina Island Bridge in exchange for their votes.
The bridge was going to connect the town of Ketchikan with a population under 9,000 to the Island of Gravina, an island with an airport and a population of 50. Despite the few number of residents and the availability of a ferry, taxpayers were going to fund the bridge for $320 million. While Congress put an end to this bridge project in 2015, other pork projects have been approved.
Citizens Against Government Waste lists the worst pork projects from 1991 to 2018 in its “Pork Hall of Shame.” Some examples include grasshopper research in 1999 for $7.3 million, combating Goth culture in 2002 for $273,000, and wool research in 2010 for $4.1 million.
Photo Credit: NASA HQ Photo
California Raises Tobacco Taxes...Again
Unfortunately for taxpayers in the Golden State, the California Department of Tax and Fee Administration (CDTFA) has decided to unilaterally increase the state’s tobacco tax by a whopping 11.5%. Each year, the CDTFA must reevaluate its tax rate for “Other Tobacco Products” (OTP). OTPs include pipe tobacco, cigars, and snuff. This new tax will go into effect July 1 of this year and will be re-evaluated and likely raised again by June 30, 2022.
This tax hike on OTPs will continue to disproportionally harm California’s most vulnerable populations. Data has demonstrated that tobacco tax increases have no statistically significant impact on smoking prevalence among those with household incomes of less than $25,000, and 72% of smokers come from low-income communities. Californians have already suffered incredible hardships due to the harsh, job-killing restrictions imposed on them by Democrats in Sacramento. This tax hike will further perpetuate financial stress on individuals who are already struggling to make ends meet.
Increased taxes on cigarettes and other tobacco products consistently result in lower than projected revenues. For example, when nearby Utah raised its tobacco tax, smuggled cigarettes doubled to over 20% of the market. In New York, smuggling has reached over 50% – and California is not far behind at 47.7% market share. As a result of these alternate unregulated markets, only three out of the 32 state tobacco tax increases studied met tax revenue estimates.
These tax hikes promote black markets for smuggled tobacco products. Most tobacco smuggling operations are run by multi-million-dollar organized crime syndicates who also engage in human trafficking and money laundering. In addition, profits from smuggling have been used to fund terrorist activity. The US State Department has explicitly called tobacco smuggling a “threat to national security.”
California is already one of the most highly taxed states in the nation, ranking 49th in the Tax Foundation’s 2021 Business Tax Climate Index. In addition to its harsh business tax climate, imposing regressive taxes - such as a tobacco tax hike - will only make the Golden State a less attractive place to live and will continue to drive businesses and families out of the state for better opportunities. The CDTFA must recognize this and begin implementing policies that will protect California taxpayers.
Photo Credit: jjkbach
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