Rep. Nunes Introduces Legislation to Index Capital Gains Taxes to Inflation
Congressman Devin Nunes (R-Calif.) today introduced H.R. 6444, legislation to index the calculation of capital gains taxes to inflation. The legislation, known as the Capital Gains Inflation Relief Act, would end the taxation of inflationary gains leading to the creation of more wealth and a stronger economy.
All Members of Congress should support and co-sponsor this pro-growth legislation.
"Ending the taxation of inflationary gains will have clear, immediate economic benefits and will increase the wealth of Americans across the country," said Grover Norquist, President of Americans for Tax reform. "The value of all property in America would increase. Trillions in land, buildings and share of stock would move to higher and better use. The capital gains tax on the increased number and amount of sales would dramatically increase federal revenues."
Under current law, the capital gains tax fails to account for gains that are based on inflation. This unfairly exposes taxpayers to additional taxation. For example, an investor makes a capital investment of $1,000 in 2000 and sells that investment for $2,000 in 2017 will be taxed for a $1,000 gain at a top capital gains tax rate of 23.8 percent. After adjusting for inflation, the “true gain” is much lower – just $562. (1,000 in the year 2000 equals $1,438 in 2017, according to the Bureau of Labor Statistics Inflation Calculator).
This “inflation tax” has real world consequences. For instance, property owners may be dis-incentivized from selling their property because of higher levels of taxation. According to a 2013 analysis by the Tax Foundation on individual capital gains taxes, the average effective rate excluding gains from inflation between 1950 and 2012 was 42.5 percent, nearly twice today’s 23.8 percent top capital gains tax rate.
Congressman Nunes should be applauded for his leadership in working to end the taxation of inflationary gains.
At the same time, the inflation tax can and should be ended through the regulatory authority of the Treasury Secretary.
The Treasury Department has the legal authority to index capital gains taxes to inflation, as noted by Lawyers Charles J. Cooper, Michael A. Carvin and Vincent Colatriano in a 1993 legal memo published in Virginia Tax Review, and again by Cooper and Colatriano in a 2012 legal memo published in the Harvard Journal of Law and Public Policy.
This effort also has historic support for this effort:
- Larry Kudlow, the Director of the National Economic Council, supports using Treasury’s regulatory authority to index capital gains taxes to inflation. In a CNBC op-ed published on August 11, 2017, he described indexation as a way to promote economic growth and prosperity:
- President Trump's absolutely best economic policy so far has been his relentless rampage against onerous, burdensome, costly, prosperity-killing regulations on business. And the taxation of inflationary capital gains fits right in there. It is an unfair and misguided policy that punishes risk and success. The president should use his executive authority — as he so often has to drain the swamp — to remove this prosperity-killing practice.
- President Trump's absolutely best economic policy so far has been his relentless rampage against onerous, burdensome, costly, prosperity-killing regulations on business. And the taxation of inflationary capital gains fits right in there. It is an unfair and misguided policy that punishes risk and success. The president should use his executive authority — as he so often has to drain the swamp — to remove this prosperity-killing practice.
- Current and former members of Congress, led by Vice President Mike Pence, support indexing capital gains taxes to inflation. Pence introduced legislation in 2007 with 88 co-sponsors including now-Office of Management and Budget Director Mick Mulvaney, House Speaker Paul Ryan (R-Wis.) and House Ways and Means Chairman Kevin Brady (R-Texas).
- Senator Ted Cruz (R-Texas) has introduced legislation indexing capital gains taxes to inflation. This legislation is co-sponsored by Senators Pat Toomey (R-Pa.) and Jim Inhofe (R-Okla.).
To learn more information about indexing capital gains to inflation and who is supporting it, please go to https://www.atr.org/indexing-capital-gains-taxes-inflation-resources.
Photo Credit: Daily Caller
$5 Per Dozen: Massachusetts Families Face Crippling Egg Shortage
Some call it "Egg Armageddon." Others predict "temporary chaos." Whatever you choose to call it, breakfast enthusiasts in Massachusetts should beware: a spectacular shortage of eggs is on the way.
Starting on January 1, every company selling eggs in Massachusetts must provide at least 1.5 square feet of floor space for each egg-laying hen. Voters overwhelmingly approved an animal welfare law mandating these new standards in 2016, by a 78–22% margin.
But voters did not think this through, and lawmakers have been far too slow in their response. As a result, even five years after the law was approved, very few egg suppliers comply with the rigorous new standards. In fact, Massachusetts will have the strictest rules for egg sales in the country. All other states only require 1 square foot per hen, rather than 1.5. Moreover, every national organization that certifies cage-free eggs also uses 1 square foot as their standard.
Egg suppliers have found it impossible to meet a substantially higher standard just for Massachusetts consumers. Doing so before the New Year is undoubtedly out of the question. While local Massachusetts farms largely comply with the law, out-of-state commercial farms are not, meaning virtually all out-of-state eggs would be banned. This unacceptable situation threatens to bring the entire industry to its knees and cost consumers dearly.
Bill Bell, who runs the New England Brown Egg Council, estimates that over 90% of eggs in Massachusetts would become illegal on January 1. Families could be forced to shell out as much as $5 for a dozen eggs in that scenario. David Radlo, a former president of the Egg Council, worries that many residents will head to nearby Connecticut, Rhode Island, or New Hampshire – not just to buy eggs, but their entire cart of groceries.
"Many residents will be forced to cross state borders to buy their eggs," Radlo said. "Grocers near the state's borders will lose business. In addition, eggs that are available will be far more costly, affecting retail consumers, Massachusetts bakers, restaurants, and all institutions with food service departments."
Now that the law is just one month from taking effect, state legislators are frantically trying to pass an update to the law that would avert the looming shortage of eggs. The House and Senate have each passed their version of legislation modifying the 2016 voter-approved law. Both would mandate only 1 square foot of space per hen, in line with standards in other states.
Yet minor differences between the House and Senate bills have created a standoff over the final version. Since lawmakers are now in "informal session," it only takes one lawmaker to stop the bill from being approved, and compromise has proven elusive.
The egg industry and animal rights groups have formed an unlikely alliance over the fast-approaching shortage. After facing off over the original 2016 animal rights law, groups like the Animal Legal Defense Fund and the Animal Rescue League of Boston are joining forces with the New England Brown Egg Council to pressure lawmakers to finally change the law after months of failed negotiations.
But their window of opportunity is quickly closing. If lawmakers cannot secure a compromise modifying the voter-approved animal rights law by the end of December, Massachusetts families and grocers will endure an Egg Apocalypse of epic proportions – and they will only have themselves to blame.
Photo Credit: Photospublicdomain.com
More from Americans for Tax Reform
Rep. Fischbach and Sen. Lee’s STOP the GRINCH Act Would Help Mitigate the Supply Chain Crisis
In order to address the supply chain crisis, Congresswoman Michelle Fischbach (R-Minn.) and Senator Mike Lee (R-Utah) have introduced the “Surpassing Temporary Obstructions at Ports and Guaranteeing Resources to Increase the Nation’s Commercial Health Act (STOP the GRINCH Act).” This bill would authorize several regulatory waivers in order to allow the supply chain to recover without unnecessary government barriers.
Because of shutdowns, stimulus checks, and federal unemployment insurance, which paid Americans to stay at home, America is facing a supply chain crisis. On the West Coast, there is a massive backlog of vessels waiting to unload their cargo, but there are simply not enough laborers and truckers to keep up with demand. Now, Americans are experiencing consumer product shortages, which could be an even more severe problem as the holiday season has begun.
In the height of the COVID-19 pandemic, every state and the federal government issued hundreds of regulatory waivers to deal with the economic and physical strain the virus created. The STOP the GRINCH Act would continue this regulatory relief through the following reforms:
- Requires the Federal Motor Carrier Safety Administration (FMCSA) to temporarily waive trucking hours of service requirements for truck drivers and motor carriers who are transporting cargo directly to or from a U.S. port. Currently, there is an 11-hour driving limit after 10 consecutive hours off duty, a 14-hour limit in which a driver may not drive beyond the 14th consecutive hour after coming on duty, following 10 consecutive hours off duty, and a requirement that drivers take a 30 minute break for every 8 hours of driving. Also, drivers may not drive after 60/70 hours on duty in 7/8 consecutive days.
- Requires the FMCSA to allow drivers down to age 18 to receive a temporary commercial driver's license (CDL) for transport to and from a U.S. port (1 year sunset). Currently, 18-year-old drivers can currently acquire a CDL, but cannot drive across state lines or haul hazardous materials until they are 21 years old.
- Requires the Coast Guard and the Transportation Security Administration to jointly prioritize and expedite the consideration and hiring of Transportation Worker Identification Credentials applications for workers at U.S. ports, providing ports with much-needed labor.
- Requires the Department of Homeland Security to provide temporary waivers of the Jones Act for vessels that are transporting cargo from a U.S. port to a U.S. port to relieve supply chain backlogs.
- Requires the Secretaries of Agriculture, Interior, and Transportation to consult ocean carriers, ports, railroads, and truckers to identify and designate plots of federal land that could temporarily (no more than 6 months) be used for the storage and transfer of empty cargo containers.
- Requires the Secretary of Defense to take an inventory of intermodal equipment and permit trucking companies to lease such equipment.
In addition to causing consumer product shortages, the supply chain crisis has also contributed to rising prices across the nation.
The consumer price index increased by 6.2 percent on an annualized basis before seasonal adjustment in October, a 31-year high, according to the Bureau of Labor Statistics (BLS). Already, low-income families are struggling because of rising costs. According to a new Gallup poll, 71 percent of low-income households have reported experiencing financial hardship due to rising prices. Of the 71 percent, 28 percent of low-income households say they have experienced “severe hardship” due to rising prices, and 42 percent say they have experienced “moderate hardship.”
At this point, it is unacceptable for the government to sit back while Americans’ lifesavings and wages lose value and their access to goods is dwindled. One of the best ways to address this issue is to roll back existing, burdensome mandates that only exacerbate the crisis. Lawmakers should cosponsor and support H.R. 6028, the STOP the GRINCH Act.
Photo Credit: "Cargo ship in port" by Andres Alvarado is licensed under CC BY-SA 2.0.
More from Americans for Tax Reform
Lawmakers Should Support Rep. Lesko’s “Tax Deadline Simplification Act”
To simplify tax deadlines for self-employed people and business owners, Representative Debbie Lesko (R-Ariz.) recently introduced H.R. 4214, the Tax Deadline Simplification Act. This legislation is cosponsored by Reps. Brad Schneider (D-Ill.), David Schweikert (R-Ariz.), Ed Case (D-Hawaii).
Taxpayers not subject to withholding taxes, such as self-employed people and business owners, must make estimated tax payments each quarter to the Internal Revenue Service (IRS).
However, despite being called “quarterly payments” the dates do not coincide with calendar year quarters nor are they evenly spaced. These quarterly payments fall on January 15th, April 15th, June 15th, and September 15th. These uneven intervals make it more difficult for taxpayers to estimate the correct tax they owe, leading to potential noncompliance, or even overpayment.
Additionally, because the dates do not coincide with calendar year quarters, many taxpayers have trouble remembering each date. Disproportionately, this confusion affects self-employed workers, small businesses, and independent contractors. This needless complecxity an even lead to small business owners and independent contractors being subjected to costly scrutiny from the IRS and treated as if they were tax cheats.
Rep. Lesko’s bipartisan legislation, effective at the beginning of the next taxable year if passed, would set the estimated tax installment deadlines 15 days after the end of each actual calendar quarter: January 15th, April 15th, July 15th, and October 15th:
SEC. 2 QUARTERLY INSTALLMENTS FOR ESTIMATED INCOME TAX PAYMENTS BY INDIVIDUAL.
(a) IN GENERAL. – The table contained in paragraph (2) of section 6654(c) of the Internal Revenue Code of 1986 is amended –
(1) by striking “June 15” and inserting “July 15”, and
(2) by striking “September 15” and inserting “October 15”.
(b) EFFECTIVE DATE. – The amendments made by this section shall apply to installments due in taxable years beginning after the date of the enactment of this Act.
These changes would make it easier for taxpayers to estimate their tax burden and remember the payment dates, as it coincides with the calendar most business already operate under. All lawmakers should support this commonsense piece of legislation.
Photo Credit: "Debbie Lesko" by Gage Skidmore is licensed under CC BY-SA 2.0.
More from Americans for Tax Reform
City of Fairfax Wants to Tax the Rain
Is there anything that can’t be taxed? In the city of Fairfax, lawmakers want to charge residents for the privilege of having rain fall on their property.
Formally known as a “stormwater utility fee,” the Rain Tax will extend to everyone and everything with a roof, parking lot or driveway in Fairfax. Homeowners, small businesses, HOAs, non-profits, churches, and even disabled veterans, who were previously un-taxed, will feel the sting of a new monthly tax. City officials say the tax is needed to pay for maintenance of stormwater drainage infrastructure.
But money is not the issue for Fairfax. The City has already spent about $400,000 – twenty percent of an entire year’s worth of stormwater management funds – on advertising to convince residents that a Rain Tax is a good idea.
Now, the City wants another $4.48 million from families and businesses in 2022. By 2027, residents will be paying $5.58 million in new taxes, simply for having a roof over their heads.
The amount that residents will be charged depends entirely on the surface area of their roof, driveway, parking lot, gravel and concrete surfaces – any “manmade feature” that creates runoff during a storm. Under this proposal, important considerations like property valuations, annual income, and the ability of a resident to pay the fee are irrelevant. The bigger your roof and driveway, the bigger your tax bill will be.
Historically, Rain Taxes are incredibly unpopular. Maryland tried a statewide version of the Rain Tax in 2013. For years, the city of Baltimore and Maryland’s nine largest counties were forced to charge their residents for every square foot of impervious surfaces on their properties.
Along with being intrusive and frivolous, the Rain Tax was implemented differently in each county, making it difficult for Marylanders to correctly follow the law. For example, Charles County levied a flat fee of $43 per property, while Montgomery County charged fees ranging from $29 to $265 depending on the total area of impervious surfaces.
A year after signing the Rain Tax into law, Governor Martin O’Malley saw his chosen successor lose to Republican Larry Hogan in an embarrassing upset. In fact, Maryland’s Rain Tax was so unpopular that a repeal of the law was passed almost unanimously just two years later. Only one state delegate voted to uphold the tax.
For residents struggling with rising inflation, and small businesses battling a historic shortage of labor, a Rain Tax will only make life more difficult in the City of Fairfax. Lawmakers should look to surplus General Fund revenue or existing real estate tax funds to support stormwater management programs, as they have done for years, rather than impose a new burdensome tax on families and businesses.
Photo Credit: W.carter, CC0, via Wikimedia Commons
More from Americans for Tax Reform
Poll: Voters Say IRS Enlargement Will Hit Middle Class
By a 2-1 margin, voters believe additional IRS funding for auditing and tax law enforcement will impact the middle-class, despite Democrats’ claims that it would be aimed at the wealthy. According to a new poll by HarrisX, 58 percent of voters believe that the Democrats’ plan to supersize the IRS would impact the middle class, compared to just 23 percent who believe it’d be limited to the wealthy.
Out of nearly $80 billion in new IRS funding in Democrats’ reconciliation bill, $44.9 billion, more than half, will go directly towards “enforcement.” The agency will receive a comparatively meager $1.93 billion in funding for “taxpayer services” which include things like pre-filing assistance and education, filing and account services, and taxpayer advocacy services. That is a 23-1 ratio of spending on “enforcement” vs. “taxpayer services.”
President Biden and congressional Democrats have claimed that this increase and enforcement will be limited to the wealthy.
Respondents were asked the following:
Do you think the additional IRS funding for auditing and tax law enforcement, which is supposed to be aimed at wealthy, would be limited to that group or would the middle class also be impacted?
58 percent of respondents said that increased enforcement will impact the middle class, while just 23 percent believed it would be limited to the wealthy.
Voters in key demographics agreed that the additional funding would impact the middle class:
- 76 percent of Republicans
- 56 percent of independents
- 65 percent of male voters
- 52 percent of female voters
- 59 percent of voters with 4+ years of post-high school education
- 61 percent of suburban voters
- 61 percent of rural voters
The poll-takers are correct, as the bill will fund 1.2 million more annual IRS audits; about half will hit households making less than $75k.
As previously reported by CNBC, experts say a fattened-up IRS would go after small businesses that necessarily depend on cash transactions:
Certain small businesses may face an audit under the plan. “I think the industries that should be concerned are those in cash,” said Luis Strohmeier, a Miami-based CFP and partner at Octavia Wealth Advisors.
[He expects the agency to scrutinize cash-only small businesses like restaurants, retail, salons and other service-based companies.]
The wealthy and large corporations already have armies of lawyers and accountants that ensure they legally take advantage of the plethora of credits and deductions offered by the tax code. Further, the IRS already audits the largest corporations at high rates.
The IRS will go after easier targets to find this money instead: businesses and individuals without legal teams and accountants. New IRS enforcement will fall on American families and small businesses, not the “rich.”
The poll was conducted between November 29 - December 1 among 1,848 registered voters. The sampling margin of error of this poll is plus or minus 2.3 percentage points and results reflect a nationally representative sample of registered voters.
Photo Credit: Van Tay media licesned for free use.
More from Americans for Tax Reform
Wisconsin Residents Won’t Have To Worry About State Taxes Going Up If Rebecca Kleefisch Is Elected Governor
Former Wisconsin Lt. Governor Rebecca Kleefisch signed the Taxpayer Protection Pledge this week in her bid to be the Badger State’s next governor. The Pledge, sponsored by Americans for Tax Reform, commits gubernatorial signers to oppose and veto any and all efforts to enact net tax hikes.
Americans for Tax Reform offers the Pledge to all candidates for state and federal office. Fourteen incumbent governors and over 1,000 state legislators have signed the Pledge. Rebecca Kleefisch joins 15 sitting Wisconsin state legislators and four members of the state’s congressional delegation who have made this important commitment to taxpayers.
Incumbent Wisconsin Governor Tony Evers (D) has made it clear he does not share Kleefisch’s commitment to defending taxpayers. In fact, Governor Evers kicked off this year proposing to raise state taxes as part of his executive budget. Governor Evers’ proposed budget would’ve raised taxes by a billion dollars over the next biennium. The Republican controlled Wisconsin House and Senate not only put a stop to Evers’ billion dollar tax hike this year, they convinced him to swallow a budget that actually cut taxes.
By signing the Taxpayer Protection Pledge, Rebecca Kleefisch makes it clear she would be a governor whose administration would allow state legislators to resume and build upon he considerable progress that’s been made over the past decade in reducing Wisconsin’s tax burden. Wisconsin’s average state and local tax burden has dropped from 12.2% of income in 1999, the nation’s fifth highest at the time, to 10.3% today, the nation’s 23rd highest. This progress has been made thanks in large part to the tax relief and Act 10-facilitated spending restraint enacted by then-Governor Scott Walker, Lt. Governor Kleefisch, and the Republican-run Wisconsin Legislature during the last decade.
“I want to thank and congratulate Rebecca Kleefisch for taking the Taxpayer Protection Pledge,” said Grover Norquist, president of Americans for Tax Reform. “Were Rebecca Kleefisch to be elected governor, that would allow Republican lawmakers to build upon the progress they made during the Walker years, such as with reforms that reduce the state’s still uncompetitive top income tax rate. But first and foremost, under a Kleefisch administration Wisconsin taxpayers would not have to worry about their state tax burden going up. The same comfort would not be there should Tony Evers get another four years in office. By signing the Pledge, Rebecca Kleefisch has demonstrated that she understands the problems of hard-working Wisconsin taxpayers in a way that Tony Evers does not.”
The Taxpayer Protection Pledge is a public, written commitment by elected officials or candidates to the taxpayers of his or her state or district. The Pledge is a commitment to oppose and veto or vote against any net tax increase. All candidates for federal and state office have been offered the Pledge each election cycle since 1986.
Stolen Taxpayer Files: Senate Finance Republicans Send Letter to IRS Commissioner Demanding Answers by Dec. 15
Senate Finance ranking member Mike Crapo (R-Idaho) and 13 of his Republican colleagues sent a detailed letter to IRS commissioner Charles Rettig urging him to probe the theft of private taxpayer files of thousands of Americans spanning a period of 15 years. The Dec. 1 letter, which comes nearly six months after progressive news outlet ProPublica published the stolen information, calls out the agency for its foot-dragging in determining the source of the breach.
The letter criticizes Rettig for the agency's slow response to a serious violation of the privacy of American taxpayers. The Senators wrote:
Despite clear and ongoing evidence of a threat of a data breach, in response to a letter sent to you by Senators Grassley and Crapo, you responded in part that “We do not yet know whether there has been a data breach or a threat of a data breach.” Your letter of September 13, 2021, also notes that “We do not yet have any information concerning the source of the alleged taxpayer information published by ProPublica.”
On Tuesday, Treasury Secretary Janet Yellen said -- for at least the fifth time -- that she still does not know the source of the IRS leaks.
The letter points out how the IRS does not have proper safeguards in place to protect confidential taxpayer data. As the letter notes:
Even before ProPublica began publishing articles utilizing taxpayer information, significant issues with IRS IT systems were well documented. In fact, the struggles of the IRS to modernize IT systems is something of an old chestnut in tax policy circles. Aside from a reliance on COBOL which is referred to as “geriatric code,” it is also reported that the “IRS main software "Master File" was developed in 1962 and uses nine-track tape for data storage. None of the IRS programs have ever been that well coordinated.”
Crapo and his colleagues go on to say that IRS contractor relationships introduce additional security vulnerabilities that have not been adequately addressed. The Treasury Inspector General for Tax Administration recently recommended that the IRS implement end-to-end encryption in transferring taxpayer data to Private Collection Agencies to protect taxpayers against unauthorized access and disclosure. Despite the recommendation, the letter notes that “PCA information residing at the IRS had not been encrypted in the production environment.”
The lack of competence on the part of the IRS is especially shocking in light of their request for unprecedented funding. The letter points out that:
the IRS and Treasury are advocating for an unprecedented, nearly $80 billion, amount of mandatory funding from general taxpayer resources. In the funding scheme being advocated, the IRS is to be provided with a mandatory stream of $80 billion, after which the IRS would report to Congress on how it plans to use the funds—that is; fund now, plan later. Such a scheme, in the face of ongoing alleged privacy leaks of what appear to be IRS information, the source(s) of which no federal agency appears to have any knowledge, and in the face of known serious deficiencies in IRS data protections, defines irresponsibility.
The letter concludes with a series of questions about the agency’s response to these leaks, including how many employees have been tasked with this investigation, what is the status of IRS’s efforts to resolve the 120 open GAO recommendations, how many contractors has the IRS provided taxpayer information to that has not been encrypted over the past year and the past 10 years, and how much of their requested funding would the IRS plan to use on additional digital surveillance of taxpayers.
Given their failure to protect sensitive taxpayer information, every American should be concerned about the Democrats' proposal to increase the size and scope of the IRS.
The PDF of the letter can be found here.
Photo Credit: United States Senate
Ohio Considers Mandating Union-Only Workers at Refineries
Ohio’s four oil refineries could face onerous new requirements to hire union-only workers under a recently introduced bill.
Refineries often use construction crews to complete turnaround projects, in which the entire processing capacity of a plant is taken offline for inspection, improvements, and catalyst regeneration. Turnarounds are already expensive, constituting the most significant portion of a plant’s yearly maintenance budget. As production is shut down, efficiency is key: companies lose revenue every day the facility is not in operation. But HB 235 would impose even higher costs and regulatory burdens on turnarounds and other construction projects as refineries are forced to contract with crews of union workers.
While the word “union” is never mentioned in the legislative text, the bill recognizes only participants and graduates of registered, government-approved apprenticeship programs. That means apprentices in similar programs recognized by the refining industry, but not registered with the Ohio government, cannot count toward the new mandatory quotas.
Apprentices of industry-recognized programs graduate with specialized knowledge and experience, as well as comprehensive safety training. Trade groups, corporations, non-profits and educational institutions collaborate to provide competitive training programs for future industry employees. But the bill unfairly treats these apprentices as inferior workers by banning them from construction projects in the refining industry, putting them at a disadvantage despite no real difference in ability.
Proponents of HB 235 say that the bill accounts for non-union workers. It is true that Class B skilled journeypersons – trade workers who have acquired at least 10,000 hours in on-the-job experience – may also count toward the new mandatory quotas. However, 5 years of experience is a high and unnecessary bar to set for construction crews in one of the safest manufacturing industries in the nation.
Known as the High Hazard Training Certification Act, HB 235 asserts that workplace safety is a major concern in the refining industry and that additional union workers would fix the problem. Yet this notion is a slap in the face to Ohio refiners, which consider safe operations their number one core operating value. In fact, the industry itself is remarkably safe: compared with more than 500 other manufacturing industries, the U.S. refining industry boasts the lowest injury and illness rates, according to the Bureau of Labor Statistics. The data simply do not support a blanket ban on an entire class of apprentices, especially in the name of safety.
While HB 235 will have little impact on worker safety, it will interfere with efficient operations at Ohio’s four refineries by mandating high quotas of union workers. Beginning in 2022, the bill requires 45% of workers hired for construction projects to have completed registered apprenticeship training. That quota will increase rapidly through 2024, when 80% of project workers must be graduates of a government-approved program. Most industry-recognized apprentices, who have the same skills, will have to find a job somewhere else.
Meanwhile, the refineries will have to sacrifice significant time and resources to meticulously ensure their quotas are being met. After all, the bill intimidates companies into compliance with harsh penalties. Refineries that do not fulfill their government-mandated quota of union workers face a hefty fine of $10,000 per worker for every day they are not in compliance.
To make matters worse, HB 235 requires each contractor and subcontractor to submit a compliance report on all workers for every project at an Ohio refinery. Contractors are also expected to maintain a massive database of employee records for up to 3 years after completion of a project, allowing the state to comprehensively enforce its union worker requirements. Information contained in compliance reports will include the names and addresses of the refinery owner and operator, the name and address of all subcontractors working on a construction project, proof certification, and a numerical breakdown of the different types of union apprentices who worked on a project, among several other provisions.
As America’s labor shortage continues to jam production, Ohio legislators should reject this proposal to burden refineries with needless government mandates and financial penalties in order to address a problem that doesn’t exist. House Bill 235 will not only challenge the economic viability of operating Ohio’s refineries but will also jeopardize the safety of their workers, and their surrounding communities, by taking away their rights to hire the best in the business.
IMAGE credit: WikiMedia Commons
URL: https://upload.wikimedia.org/wikipedia/commons/0/01/Aerial_of_Badak_NGL_natural_gas_refinery.jpg
DescriptionAerial photo by PT Badak NGL
Date23 January 2019, 13:29
SourceAerial of Badak NGL natural gas refinery
Authorconsigliere ivan from Bontang, Indonesia
Photo Credit: WikiMedia Commons
More from Americans for Tax Reform
Poll: Majority of Voters Believe Energy Taxes in Reconciliation Bill Will Increase Consumer, Small Business Energy Costs
Voters overwhelmingly believe that the two energy taxes included in Democrats’ reconciliation bill will increase energy prices and home heating costs. According to a new poll by HarrisX, 66 percent of voters believe these energy taxes will increase energy costs, compared to just 12 percent of voters who do not think it will increase costs.
Within Democrats’ “Build Back Better” bill are two new energy taxes – one on methane emissions from natural gas production and one on crude oil production.
One provision of the bill imposes a 16.4 cents per barrel tax on crude oil and petroleum products beginning in 2022, a $12.77 billion tax. This tax would be pegged to inflation, meaning the tax would be increased automatically every year without Congress ever having to vote again.
The second provision is an $8 billion energy tax on natural gas production that would be phased in, beginning at $900/ton of methane emissions in 2023 and rising to $1,500/ton for emissions reported in 2025.
The poll was conducted between November 29 - December 1 among 1,848 registered voters. The sampling margin of error of this poll is plus or minus 2.3 percentage points and results reflect a nationally representative sample of registered voters.
Respondents were asked the following:
Congress has proposed two new energy taxes - one on methane emissions from natural gas production and one on crude oil production. Do you think these taxes will be passed onto consumers and small businesses in the form of higher energy prices and home heating costs or not?
66 percent of respondents said they believed these taxes would be passed onto consumers and small businesses in the form of higher energy costs, while just 12 percent said that the taxes would not be passed on.
This consensus remained consistent amongst key demographics including:
- 74 percent of Republicans
- 64 percent of Democrats
- 62 percent of independents
- 65 percent of Biden voters
- 76 percent of male voters
- 58 percent of female voters
- 77 percent of voters with 4+ years of post-high school education
- 67 percent of suburban voters
- 68 percent of rural voters
These proposals come at a time when gasoline prices have increased 49.6 percent in the past 12 months, 6.1 percent in October alone. Americans are facing average gas prices of $3.49 per gallon, marking 12 straight months of rising gas prices and the highest retail gas prices since August of 2014.
This winter, the U.S. Energy Information Administration forecasts that Americans will be paying 30 percent more for natural gas, 43 percent more for heating oil, 6 percent more for electricity, and 54 percent more for propane. If the weather is colder than normal, Americans could be paying even more.
Inevitably, imposing new energy taxes will exacerbate this problem.
Energy taxes are extremely regressive, given that higher costs disproportionately hurt low-income families. Thus, these tax hikes are clear violations of President Biden’s pledge not to raise any form of tax on anyone making less than $400,000 per year. Officials within the administration have repeatedly admitted taxes that raise consumer energy prices are in violation of the pledge.
Already, low-income families are struggling because of rising costs nationwide. According to a new Gallup poll, 71 percent of low-income households have reported experiencing financial hardship due to rising prices. Of the 71 percent, 28 percent of low-income households say they have experienced “severe hardship” due to rising prices, and 42 percent say they have experienced “moderate hardship.”
Instead of helping solve Americans’ real and tangible problems, the Biden administration and congressional Democrats seem willing to exacerbate them to fund a bill packed with earmarks, wasteful spending, and special interest giveaways.
Photo Credit: "Pumping Gas" by Micheal Kappel is licensed under CC BY-NC 2.0.
More from Americans for Tax Reform
Washington Sued Over Long-Term Care Law
Washington recently passed a new law mandating that workers sign up with the state’s long-term care program, the WA Cares Fund, and pay a payroll tax to finance it. This will be the nation’s first long-term care law. However, some are alleging that this law is not only burdensome but illegal.
On November 9, opponents of the law filed a class-action lawsuit to stop the payroll tax from taking effect this January. The lawsuit alleges that the long-term care law violates the Employee Retirement Income Security Act (ERISA) and federal protections for older workers.
The law imposes a .58% payroll tax to pay for the WA Cares Fund in exchange for a benefits program where, starting in 2025, workers who have trouble with at least three “activities of daily living” can receive funds for care such as installing wheelchair ramps, rides to the doctor, and in-home care. The program comes with a lifetime cap of $36,500, though the government can adjust this based on inflation.
To access these funds, a worker must have paid into the program for a total of ten years with at least five being uninterrupted, or three of the previous six years. The program also requires recipients to reside within Washington to receive the benefits. The only way someone can opt-out of the program is if they had a long-term care plan already in place by November 1st.
According to the suit, the restrictions on who can access the funds run afoul of ERISA, a federal law mandating specific standards for most retirement and health plans in the private sector. ERISA has a nonforfeiture rule which prevents workers from being denied benefits from a program they paid into.
This is a problem for the long-term care law since Idaho or Oregon residents who work in Washington must pay the tax but cannot access the benefits. Washington residents who paid into the program but retired to another state are similarly barred. The suit claims that these restrictions violate the nonforfeiture rule since these workers paid for the benefit but cannot use it.
The lawsuit also accuses the WA Cares Fund of age discrimination since older workers won’t be eligible for the benefits if they’re within ten years of retirement. Not only does this mean the law fails to help the sort of people it was written for, but the lawsuit claims it also violates the Older Workers Benefit Protection Act.
Finally, the lawsuit claims that the treatment of Idaho and Oregon workers violates the Equal Protection Clause of the Constitution since they are being treated disparately compared to their fellow workers. The district attorney of Idaho held similar views, issuing a cease-and-desist order to Jay Inslee concerning the tax against Idaho residents.
The order declares, “The Program is discriminatory and unconstitutional as to Idaho residents who work in Washington. To avoid legal action, please ensure that Washington refrains from implementing or enforcing the program against Idaho residents.”
The WA Cares Fund is yet another poorly conceived government welfare program. It claims to want to help people, whether they like it or not but then bars them from the same benefits it promised while taking their money. It is a poor law being used as a pretext for yet another tax.
Photo Credit: “Washington State Capitol” by Steve Voght is licensed under CC BY-SA 2.0.
More from Americans for Tax Reform
State news
Top Stories
