West Virginia Examples of Tax Reform Good News

Posted by John Kartch on Sunday, December 1st, 2019, 4:30 AM PERMALINK Follow @JohnKartch

Thanks to the Tax Cuts and Jobs Act enacted by congressional Republicans and President Trump, 90 percent of American wage earners have higher take-home pay. And employers of all sizes are hiring, raising pay, increasing benefits, upgrading equipment and expanding operations.

Below are several examples of tax reform good news in West Virginia. (Additions to this list can be sent to jkartch@atr.org)

Eagle Manufacturing (Wellsburg, West Virginia) – Creating new jobs and purchasing new equipment:

The company traditionally has sought to buy used equipment at low prices when replacement of machinery was necessary, according to Trimmer.

“Because of that tax break, we can invest and buy our next machines,” he said. “My department is now looking to buy a $2 million machine, rather than a 1990 classic. It will pay for itself in a short manner of time.”

Trimmer said the company is about to sign some government contracts that will put Eagle cabinets and metal products on the next generation of U.S. naval destroyers.

This could result in as many as 25 jobs being created, he said. – May 3, 2018, The Intelligencer article excerpt

Doss Enterprises (Jane Lew, West Virginia) – Hiring new employees and purchasing new equipment:

The benefits of the Tax Cuts and Jobs Act are evident just from looking around the Doss facility, Capito said.

“When I saw their board of (new) hires, there must have been 20 or 30 names on there, just April and May,” she said.

The company has chosen to reinvest its tax savings in its employees and into new equipment, Capito said.

“All of the employees are seeing (it) in their paychecks,” she said. “(Doss) has also bought some new equipment with his money, which is a great investment. He’s going to be hiring at least another 30 people.” – May 2, 2018, WVNews.com article excerpt

Warwood Tool (Wheeling, West Virginia) – Creating a new line of products:

The tax cuts have given the company and its customers enough optimism for the future that Warwood Tool is developing a new line of products. – May 3, 2018, The Intelligencer article excerpt

West Virginia American Water (Charleston, West Virginia) – The utility will pass tax savings on to customers:

West Virginia American Water Company announced a settlement plan last week which — if approved by the PSC — would result in an average savings of $3.77 a month for water and sewer customers in the state.

Panhandle Cleaning and Restoration (Wheeling, West Virginia) – Purchasing new trucks and equipment:

While Panhandle is often called upon for clean-up services after national disasters, Contraguerro told Jenkins the company relies on its day-to-day operations. Their employees, trucks and equipment are called to local homes and businesses each day following water-line breaks or other incidents, and Panhandle doesn’t wait for hurricanes to hit, he said.

The company plans to invest the money it receives from the tax cuts into more trucks and equipment.

“We will be reinvesting in the business,” he told Jenkins. “There is a huge benefit to reinvesting.” -- May 3, 2018, The Intelligencer article excerpt

Potomac Edison (Martinsburg, West Virginia) - The utility is passing on tax savings to customers:

‘More than 85,000 Potomac Edison customers in the Eastern Panhandle should see lower bills in the coming weeks thanks to federal tax reforms adopted in December.

The West Virginia Public Service Commission announced Friday that it approved rate reduction settlements for utility companies totaling almost $85 million annually, starting next month.

"Bottom line: starting Sept. 1, the tax reduction will lower bills for typical ... residential customers by nearly $2 per month," FirstEnergy spokesman Todd Meyers wrote in an email on Friday. FirstEnergy is the parent company of Potomac Edison.

"That means our average residential customer using 1,000 kilowatt-hours per month will see their monthly (bill) fall to $108.25 from $110.22," - August 24, 2018, Herald Mail Media

Davis Trust Company (Elkins, West Virginia) - 3% across the board pay raises (on top of existing compensation structure.)

Appalachian Power Co. (Milton, West Virginia) – the utility will pass along tax reform savings to customers.

Appalachian Power Company saved $235 million dollars from the federal tax cuts and the company is proposing passing the money back to its customers in a variety of ways.

The multi-pronged proposal is in a filing with the state Public Service Commission due Wednesday. The PSC is requiring all utilities to tell it their tax cut savings and what they plan to do with it.

West Virginia Consumer Advocate Jackie Roberts told MetroNews the money clearly belongs to the customers.

“They (the utilities) had taxes in their rates and now the taxes in their rates have significantly decreased—so they shouldn’t be able to keep collecting and keeping those higher taxes in their rates,” Roberts said.

Appalachian Power Company Communications Director Jeri Matheney agrees–the $235 million Appalachian Power will save belongs to its customers.

“It is customer money. What we propose to do is provide a method to keep rates as stable as possible over the longterm and as much as possible eliminate the need for rate increases,” Matheney said.

The Appalachian Power distribution proposal for West Virginia customers includes:

–$131 million to completely offset the company’s fuel and vegetation control program funding request that was part of an April filing with the PSC

–$19 million reduction in the company’s base rate case filed earlier this month (taking the $115 million request down to $96 million)

–$51 million to reduce next year’s fuel recovery cost rate case

–$1 million for a pilot economic development grant program

–$30.1 million to return to customers over the next three years – May 30, 2018, MetroNews article excerpt

U-Haul (81 locations in West Virginia) – $1,200 bonuses for full-time employees, $500 for part-time employees.

Citizens Bank of West Virginia (Elkins, West Virginia) -- $1,000 bonuses for all 66 employees:

Citizens Bank of West Virginia issued a bonus of $1,000 to each of their 66 employees, joining a number of U.S. companies to pass along savings from the federal tax reform to its staff. The announcement was made in a surprise staff meeting by the bank’s president & chief executive officer.

“One of the best investments we can make is in our employees who are dedicated to making sure our customers have great banking experiences at Citizens,” said President & CEO Nathaniel S. Bonnell. “This $66,000 investment demonstrates our thanks and appreciation to our team for their tireless efforts and commitment to the bank.”

The bank’s board of directors said it was an easy decision to reward the dedicated and hard-working employees of Citizens Bank. “There are several ways we will put the tax savings to work for Citizens,” stated Board Chairman Max L. Armentrout. “However, we are most excited about paying this bonus to the great employees we have working at our bank, serving our customers and shareholders.”

Employee reaction was overwhelming as they were excited to have $1000 checks arrive the same day as the announcement.

“This was totally unexpected!” said Assistant Trust Officer Crystal Kimbleton as she choked back tears. “This check will definitely help with upcoming high school graduation and college expenses.”

“It’s the best day ever!” exclaimed Alec Rader, Deposit Operations Administrative Assistant. “One thousand dollars, a pizza luncheon – this is not how I was expecting this day to go; what a great surprise!”

Head Teller Amanda Riffle stated she was totally speechless and shocked. “This money is going to go a long way in helping me pay down my college loan. It’s greatly appreciated!”

“I’m so grateful and it’s so amazing!” stated teary-eyed Mortgage Loan Processor Anita Jones. “I am going home to Indonesia this summer and this money will help tremendously with the cost of that trip!” Anita has not been home in nine years.

Lisa Plum, Deposit Operations Administrative Assistant II, says the employees of Citizens couldn’t ask to work for a better organization. “This was just wonderful news. I’m now going to be able to take a vacation this year that was not going to happen. We are so fortunate to work for a bank that cares so much for their employees.”

The overall sentiment of the employees throughout the bank was shock and gratitude. – Feb. 2018 Citizens Bank of West Virginia statement

Walmart – West Virginians employed at 43 Walmart stores received tax reform bonuses, wage increases, and expanded maternity and parental leave. Walmart employees who adopt children will be given $5,000 to help cover expenses.

AT&T -- $1,000 bonuses to 880 West Virginia employees; Nationwide, $1 billion increase in capital expenditures:

Today, Congress approved legislation representing the first comprehensive tax reform in a generation. The President is expected to sign the bill in the coming days.

Once tax reform is signed into law, AT&T* plans to invest an additional $1 billion in the United States in 2018 and pay a special $1,000 bonus to more than 200,000 AT&T U.S. employees — all union-represented, non-management and front-line managers. If the President signs the bill before Christmas, employees will receive the bonus over the holidays.

“Congress, working closely with the President, took a monumental step to bring taxes paid by U.S. businesses in line with the rest of the industrialized world,” said Randall Stephenson, AT&T chairman and CEO. “This tax reform will drive economic growth and create good-paying jobs. In fact, we will increase our U.S. investment and pay a special bonus to our U.S. employees.”

Since 2012, AT&T has invested more in the United States than any other public company. Every $1 billion in capital invested in the telecom industry creates about 7,000 jobs for American workers, research shows. -- Dec. 20, 2017 AT&T Inc. press release

Home Depot - S ix locations in West Virginia , bonuses for all hourly employees, up to $1,000.

Lowe's -- 2,000 employees at 18 stores in West Virginia. Employees will receive bonuses of up to $1,000 based on length of service; expanded benefits and maternity/paternal leave; $5,000 of adoption assistance.

Ryder (Three locations in West Virginia) -- Tax reform bonuses for employees.

Starbucks Coffee Company (25 locations in West Virginia) – $500 stock grants for all retail employees, $2,000 stock grants for store managers, and varying plan and support center employee stock grants. Nationally, 8,000 new retail jobs; an additional wage increase this year, totaling approximately $120 million in wage increases, increased sick time benefits and parental leave.

T.J. Maxx – Four stores in West Virginia – Tax reform bonuses, retirement plan contributions, parental leave, enhanced vacation benefits, and increased charitable donations:

The 2017 Tax Act benefited the Company in the fourth quarter and full year Fiscal 2018. The Company expects to continue to benefit from the 2017 Tax Act going forward, primarily due to the lower U.S. corporate income tax rate. As a result of the estimated cash benefit related to the 2017 Tax Act, the Company is taking the following actions:

Associates

A one-time, discretionary bonus to eligible, non-bonus-plan Associates, globally
An incremental contribution to the Company’s defined contribution retirement plans for eligible Associates in the U.S. and internationally
Instituting paid parental leave for eligible Associates in the U.S.
Enhancing vacation benefits for certain U.S. Associates

Communities

Made meaningful contributions to TJX’s charitable foundations around the world to further support TJX’s charitable giving – Feb. 28, 2018 The TJX Companies Inc. press release excerpt

Cintas (Multiple locations in West Virginia) -- $1,000 bonuses for employees of at least a year, $500 for employees of less than a year.

Chipotle Mexican Grill (Multiple locations in West Virginia) - Bonuses ranging from $250 to $1,000; increased employee benefits; nationally, $50 million investment in existing restaurants.

Comcast (Multiple locations in West Virginia) -- $1,000 bonuses; nationally, at least $50 billion investment in infrastructure in next five years.

FedEx (Multiple locations in West Virginia) – Accelerated and increased compensation; pension plan contributions:

“FedEx Corporation is announcing three major programs today following the recently enacted U.S. Tax Cuts and Jobs Act:

Over $200 million in increased compensation, about two-thirds of which will go to hourly team members by advancing 2018 annual pay increases by six months to April 1st from the normal October date. The remainder will fund increases in performance- based incentive plans for salaried personnel.
A voluntary contribution of $1.5 billion to the FedEx pension plan to ensure it remains one of the best funded retirement programs in the country.
Investing $1.5 billion to significantly expand the FedEx Express Indianapolis hub over the next seven years. The Memphis SuperHub will also be modernized and enlarged in a major program the details of which will be announced later this spring.

FedEx believes the Tax Cuts and Jobs Act will likely increase GDP and investment in the United States. – Jan. 26 2018, FedEx press release

McDonald’s (101 locations in West Virginia) – Increased tuition investments which will provide educational program access for 400,000 U.S. employees. $2,500 per year (up from $700) for crew working 15 hours a week, $3,000 (up from $1,050) for managers, and more:

McDonald’s Corporation today announced it will allocate $150 million over five years to its global Archways to Opportunity education program. This investment will provide almost 400,000 U.S. restaurant employees with accessibility to the program as the company will also lower eligibility requirements from nine months to 90 days of employment and drop weekly shift minimums from 20 hours to 15 hours. Additionally, McDonald’s will also extend some education benefits to restaurant employees’ family members. These enhancements underscore McDonald’s and its independent franchisees’ commitment to providing jobs that fit around the lives of restaurant employees so they may pursue their education and career ambitions.

The Archways to Opportunity program provides eligible U.S. employees an opportunity to earn a high school diploma, receive upfront college tuition assistance, access free education advising services and learn English as a second language.

“Our commitment to education reinforces our ongoing support of the people who play a crucial role in our journey to build a better McDonald’s,” said Steve Easterbrook, McDonald’s President and CEO. “By offering restaurant employees more opportunities to further their education and pursue their career aspirations, we are helping them find their full potential, whether that’s at McDonald’s or elsewhere.”

Accelerated by changes in the U.S. tax law, McDonald’s increased investment in the Archways to Opportunity Program includes:

Increased Tuition Investment:
- Crew: Eligible crew will have access to $2,500/year, up from $700/year.
- Managers: Eligible Managers will have access to $3,000/year, up from $1,050.
- Participants have a choice for how they apply this funding – whether it be to a community college, four year university or trade school. There is no lifetime cap on tuition assistance – restaurant employees will be able to pursue their education and career passions at their own pace. The new tuition assistance is effective May 1, 2018 and retroactive to January 1, 2018.
Lowered Eligibility Requirements: Increase access to the program by lowering eligibility requirements from nine months to 90 days of employment. In addition, dropping from 20 hours minimum to 15 hours minimum (roughly two full time shifts) per week to enable restaurant employees more time to focus on studies.
Extended Services to Families: Extension of Career Online High School and College Advisory services to restaurant employees’ family members through existing educational partners Cengage and Council for Adult and Experiential Learning (CAEL).
Additional Resources: Career exploration resources for eligible restaurant employees to be available later this year.
Creation of an International Education Fund: Grants to provide local initiatives and incentives in global markets to further education advancement programs.

“Since its inception, Archways to Opportunity was meant to match the ambition and drive of restaurant crew with the means and network to help them find success on their own terms,” said David Fairhurst, McDonald’s Chief People Officer. “By tripling tuition assistance, adding education benefits for family members and lowering eligibility requirements to the equivalent of a summer job, we are sending a signal that if you come work at your local McDonald’s, we’ll invest in your future.”

After launching in the U.S. in 2015, Archways to Opportunity has increased access to education for over 24,000 people and awarded over $21 million in high school and college tuition assistance. Graduates have received college degrees in Business Administration, Human Resources, Communications, Accounting, Microbiology and more. – March 29, 2018 McDonald’s Corporation press release excerpt

Note: If you know of other West Virginia examples, please email John Kartch at jkartch@atr.org

The running nationwide list of companies can be found at www.atr.org/list

More from Americans for Tax Reform

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Alabama Examples of Tax Reform Good News

Texas Examples of Tax Reform Good News

RSC GEAR Report Gives 100+ Powerful Solutions For Smaller Government

Posted by Tom Hebert on Friday, February 14th, 2020, 11:00 AM PERMALINK Follow @tomhebertdc

The Republican Study Committee’s (RSC) Government, Efficiency, Accountability, and Reform (GEAR) Task Force recently released a report highlighting more than one hundred commonsense solutions to move the federal government in a smaller, smarter direction.

RSC Chairman Rep. Mike Johnson (R-La.) and GEAR Task Force Chairman Rep. Greg Gianforte (R-Mont.) should be commended for their efforts in creating this extensive plan of action.

The report identifies three central problems that plague federal bureaucracy, the first being power. Runaway federal bureaucrats have seized power from Congress, and that has opened the floodgates for abuse of power in agencies like the IRS.

The GEAR report calls for a restoration of the proper balance of power between Congress and the Executive Branch. Notably, the report recommends (among many proposals):

Enacting the REINS Act, which would require Congress to pass a joint resolution for any major rule within 70 days of promulgation before the rule takes effect. This legislation would fundamentally change the rule-making process and save taxpayers money by expanding Congressional oversight on major rules.
Expanding use of the Congressional Review Act (CRA), which allows Congress to roll back recently promulgated regulations under an expedited parliamentary process. Expanding CRA use will allow Congress to use its rightful constitutional power to prevent the implementation of harmful, costly regulations.
Codifying that CRAs apply to “regulatory dark matter,” which would encompass so-called “guidance documents” that function as de-facto regulations. The RSC plan gives Congress an expedited avenue to strike down initiatives that do not follow the CRA process.
Enact the Article I Restoration Act, which would require federal regulations to expire every three years if not specifically authorized.

Of course, restoring the proper balance of power is only the first step in constraining runaway bureaucrats. Step two is reforming government practices with a special focus on eliminating waste. The report has many suggestions large and small for eliminating waste, including:

Improving metrics for regulatory decision-making. In the private sector, managers do not make strategic decisions without evidence. The RSC plan would hold bureaucracy to the same standard and encourage Congress to modernize the government’s collection of metrics to ensure policymakers are informed by the best data available.
Utilize excess federal office space. As of 2016, federal agencies own 3,120 vacant buildings and 7,859 underutilized buildings. The GEAR Task Force recommends that agencies sell unused buildings and lease office space (when appropriate) to like-minded organizations instead of letting the buildings waste taxpayer dollars for absolutely no reason. Citizens Against Government Waste projects that these reforms would save taxpayers $15 billion over the next five years.
Stop paying dead people. In 2016, the Social Security Administration (SSA) paid out $37.7 million in benefits to 746 dead veterans. In 2015, the SSA Inspector General identified 6.5 million individuals listed as being 112 years of age or older without any recorded death information. Embarrassingly enough, the SSA has failed to curb these improper payments to deceased individuals. GEAR Task Force Chairman Rep. Greg Gianforte (Mont. – At Large) has introduced legislation that would provide a framework for SSA to partner with state and local agencies to collect and disseminate death data.

Finally, the GEAR Task Force recommends that the federal government realign its personnel policies with those of the private sector. Namely, the report proposes:

Modernizing the hiring process so that hiring managers can efficiently and effectively recruit highly qualified candidates to fill jobs. On average, it takes federal agencies three times longer than the private sector to hire employees. The RSC plan recommends that Congress focus on two goals in streamlining the hiring process –– empowering hiring managers to recruit outside of OPM recommendations, and automating human resource functions to more efficiently utilize taxpayer funds.
Enact the MERIT Act so that managers can more easily remove toxic federal employees. Currently, it takes over 300 days to remove a bad employee due to the myriad red tape associated with the process. The MERIT Act offers a framework to realign firing procedures on the federal level with the efficient practices of the private sector. Additionally, the MERIT Act also limits retirement compensation and allows managers to recoup bonuses from employees who were later found to commit workplace violations.
Provide mandatory removal of federal employees who commit crimes. In 2016, the VA demoted (but kept on staff) an individual who was convicted of assisting an armed robbery. This plan would fully empower agencies to terminate serious criminals.
Ban taxpayer-funded union work. Under current law, federal employees are paid for engaging in union activity while on the job. The RSC plan would eliminate this and make it a fireable offense.
Enact merit-based pay in federal agencies, which would allow managers to reward employees based on performance. Under current law, there is barely a merit-based component to the existing compensation system, and federal workers are paid based on seniority and demonstrating an “acceptable level of competence.” The RSC plan recommends moving towards a merit-based pay system that rewards exception and highly-skilled employees with appropriate compensation.

The RSC GEAR Task Force report on commonsense government reform is a powerful plan of action for when Republicans take back the House majority in November. The plan is chock-full of reforms that will rein in runaway bureaucracy and leave the American people with a smaller, better, more efficient government.

Photo Credit: Joe deSousa

Posted by Samantha Capriotti on Thursday, February 13th, 2020, 12:10 PM PERMALINK

Senator Pat Toomey (R-PA) has introduced the Accelerate Long-Term Investment Growth Now (ALIGN) Act to allow businesses to fully deduct business assets at the time of purchase, rather than depreciate them over an extended period of time. This provision, also known as 100 percent depreciation, was created by the 2017 Tax Cuts and Jobs Act for five years, but begins to phase out at the end of 2022.

Toomey’s bill will make full expensing permanent and should be supported by all Senators.

The ALIGN Act is co-sponsored by Senators Mike Braun (R-Ind.), Shelley Moore Capito (R- W.Va.), Kevin Cramer (R-N.D.), Ted Cruz (R-Texas), Cory Gardner (R-Colo.), Jim Inhofe (R-Okla.), James Lankford (R-Okla.), Jerry Moran (R-Kan.), David Perdue (R-Ga.), Rob Portman (R-Ohio), Jim Risch (R-Idaho), Marco Rubio (R-Fla.), Tim Scott (R-S.C.), and Thom Tillis (R-N.C.).

Full expensing gives businesses a zero percent effective rate on new investments, which incentivizes more capital flowing into the economy, leading to stronger growth. In contrast, the old system of depreciation required businesses to deduct the cost of new investments over multiple years depending on the asset they purchase, as dictated by complex and arbitrary IRS rules.

These rules create needless complexity, increased compliance costs, and could force business owners to make decisions based on tax reasons over business reasons. In fact, businesses spent over 448 million hours and $23 billion each year complying with this system when it was last in effect.

Moving to full expensing as Toomey has proposed would increase GDP by 0.9 percent, creating 172,300 additional full time jobs, according to the Tax Foundation.

Full expensing has bipartisan support. For instance, the Obama White House supported the policy and noted that it lowers the effective tax rate which encourages businesses to increase investment, create more jobs, and lift wages.

Toomey’s bill also includes a fix to allow qualified improvement property to be immediately expensed, fixing an inadvertent error in the tax bill. While this fix is bipartisan and has strong support in both the House and Senate, Democrats have so far refused to let this proposal have a vote or be attached to a broader legislative vehicle.

Toomey’s ALIGN Act is a commonsense, bipartisan proposal that will increase economic growth and build on the success of the TCJA. All Senators should support this important legislation to make full business expensing permanent.

Photo Credit: Gage Skidmore

Posted by Alex Hendrie on Thursday, February 13th, 2020, 12:00 PM PERMALINK

Congresswoman Terri Sewell (D-Ala.) and Congressman Adrian Smith (R-NE) recently introduced important legislation to rein in the Center for Medicare and Medicaid Innovation (CMMI). This legislation, H.R. 5741, the “Strengthening Innovation in Medicare and Medicaid Act,” is cosponsored by Reps. Tony Cardenas (D-CA), John Shimkus (R-Ill.), Kurt Schrader (D-Ore), and Brad Wenstrup (R-Ohio).

These members should be applauded for introducing this legislation. Additionally, all members of Congress should support and co-sponsor this legislation.

CMMI was created under Obamacare with the goal of increasing efficiency of healthcare programs. The agency was tasked with conducting demonstrations over new health care delivery and payment models in Medicare, Medicaid, and the Children’s Health Insurance Program with the intent of reducing healthcare costs.

However, in its relatively short history, CMMI has pushed demonstrations with little evidence they would result in savings, while strong-arming healthcare providers and patients into participating.

The agency is also not under the normal appropriations process – Obamacare gave CMMI $10 billion every decade in perpetuity. As a result, Congress is limited in its ability to conduct routine, necessary oversight.

H.R. 5741 would help bring much needed oversight to CMMI through the imposition of several guardrails. For instance, the legislation would:

Require a public notice and comment process for any new demonstration. There are currently no requirements for public input.
Create a privileged process for Congress to block the implementation of a demonstration within 45 days of a proposed expansion from Phase 1 to Phase 2.
Set limitations on any demonstration including requiring a test to be no longer than five years and only as many participants as necessary to obtain a statistically valid sample.
Allow providers and suppliers to opt-out a demonstration if it would cause undue economic hardship.
Require monitoring of the impact any demonstration is having on beneficiaries and health disparities.

These reforms are a good first step towards reining in CMMI by providing much needed transparency, congressional oversight and stakeholder engagement.

Photo Credit: Kevin Simmons

Posted by Olivia Grady on Thursday, February 13th, 2020, 6:58 AM PERMALINK

Today, Americans for Tax Reform released a letter urging Senators to vote against H.J. Res. 76.

To read the letter, click here or read below:

Dear Senators:

On behalf of Americans for Tax Reform (ATR) and millions of taxpayers nationwide, I urge you to vote against H.J. Res. 76, which would nullify a recent Department of Education rule.

On September 23, 2019, the Department of Education finalized its “Borrower Defense Institutional Accountability” rule. This rule is a great victory for American students, taxpayers, and schools, and it provides some much-needed common sense reforms.

The rule helps students by giving a clear standard for discharging student loans when a school has committed a misrepresentation. It also ensures that the Department uses facts, evidence, and due process to determine if a school has misrepresented itself. This helps students and schools. Further, in order to reach a decision more quickly, this rule ends the unlawful ban on arbitration. Finally, the rule helps students complete their education even if there is a school closure.

The rule also benefits American taxpayers by ensuring that the relief that the Department gives to a student is related to the financial harm that the student has suffered. As a result of these provisions, this rule saves American taxpayers $11.1 billion over ten years. This is in stark contrast to President Obama’s 2016 Department of Education rule that was projected to cost up to $40 billion over ten years.

Finally, the Department of Education did not consider this rule lightly. In fact, the Department spent over two years working on this rule. During this time, the Department held public hearings and responded to tens of thousands of public comments.

Because the Department of Education’s rule helps students and taxpayers and was carefully considered with public comment, Senators should vote against H.J. Res. 76.

Sincerely,

Grover G. Norquist

President

Posted by Olivia Grady on Wednesday, February 12th, 2020, 8:57 AM PERMALINK

On February 5^th, the Maine Heritage Policy Center (MHPC) filed an amicus brief at the U.S. Supreme Court on behalf of Professor Jonathan Reisman in Reisman v. Associated Faculties of the University of Maine. Americans for Tax Reform (ATR) and the Center for Worker Freedom (CWF) were honored to join MHPC and ten other nonprofit organizations in support of the First Amendment rights of state government workers.

The rights of state government workers, like Professor Reisman, are currently being violated. Many of these workers are forced to accept “representation” by labor unions even though they are not members of these organizations, nor do they support them. These unions have control over the workers’ wages, hours and the terms and conditions of employment. The workers are not allowed to negotiate their own terms and conditions of employment with their employer, nor can these workers choose other unions to represent them. This is known as exclusive representation. Exclusive representation or forcing workers to accept the speech of labor unions as their own is a violation of the First Amendment rights of free speech and association. The Reisman case would restore the First Amendment freedoms of these workers by ending exclusive representation.

The Reisman case began in 2018 when the Buckeye Institute filed a complaint with the United States District Court for the District of Maine. Jonathan Reisman, a professor of Economics and Public Policy at the University of Maine at Machias, argued that Maine’s law allowing a union to become the exclusive bargaining representative for public employees violates his First Amendment rights. The court unfortunately dismissed the action, citing the 1977 Supreme Court case Abood v. Detroit Board of Education. Professor Reisman appealed to the First Circuit, and that court affirmed the district court’s decision. Professor Reisman has now filed a petition for certiorari at the U.S. Supreme Court.

Interestingly, Professor Reisman is not the only one challenging exclusive representation. This case is actually one of three cases where the Buckeye Institute is representing state employees who are seeking to end exclusive representation. Kathy Uradnik of Minnesota was the first to challenge exclusive representation after the Supreme Court’s Janus v. AFSCME decision, and Jade Thompson of Ohio is also challenging exclusive representation. In the Uradnik case, the plaintiff is Kathy Uradnik, a professor of political science at St. Cloud State University in Minnesota. Her union, the Inter Faculty Organization, discriminated against nonunion faculty members by forbidding them from joining the Faculty Senate or serving on any faculty search, service or governance committee. This ban reduced their ability to obtain tenure and participate in their University.

Another plaintiff, Jade Thompson, a Spanish teacher in Ohio, also experienced similar discrimination. Her union, the Marietta Education Association, also excluded nonunion members from key committees. In addition, the union required that seniority determine who was fired during layoffs.

These cases are the next step to protect the rights of workers after the Supreme Court’s 2018 decision in Janus v. AFSCME decision. That case ensured that government workers are not forced to support unions that they have chosen not to join. These cases ensure that government workers are not represented by organizations that they do not support.

ATR and CWF strongly urge the Supreme Court to consider the Reisman case and restore the First Amendment rights of these workers.

Posted by Alex Hendrie on Wednesday, February 12th, 2020, 8:00 AM PERMALINK

Recent reports indicate that the Senate may consider the Prescription Drug Pricing Reduction Act (PDPRA) in the coming months. This legislation that would impose another price-setting mechanism on the U.S. healthcare system.

While supporters continue to call for full Senate consideration of this proposal, lawmakers should reject the PDPRA. The bill disrupts the existing structure of Medicare Part D and does nothing to directly help seniors.

The PDPRA imposes an inflationary rebate penalty on Medicare Part D drugs. This provision would force manufacturers to pay the government a 100 percent fee when the list price of a drug increases faster than inflation.

This provision is problematic because Part D is a system that relies on competition between several stakeholders, namely pharmacy benefit managers (PBMs), insurers, and drug manufacturers. The penalty is imposed on one Part D stakeholder, the drug manufacturer, after the price has been negotiated between several stakeholders. Essentially, the government is handcuffing the ability of manufacturers to negotiate on a level playing field with insurers and PBMs.

The Proposal Undermines Part D Competition

Some PDPRA supporters claim that this policy is nothing more than the government placing a cap on the subsidies that manufacturers receive. This is misguided –– the federal government does not pay subsidies to drug manufacturers.

The government makes payments to insurers based on the negotiated price of a drug which includes substantial discounts off the list price. In actuality, this policy will disrupt existing negotiation in Part D. In fact, as noted by Doug Badger, this policy is “at odds with the Part D program’s reliance on private entities to negotiate discounts on behalf of seniors.”

Instead of having the government directly provide care, Medicare Part D leverages competition between pharmacy benefit managers (PBMs), pharmaceutical manufacturers, plans, and pharmacies to provide coverage to seniors. This lowers costs and maximizes access for seniors.

At the core of this program is the non-interference clause which prevents the Secretary of Health and Human Services (HHS) from interfering with the robust private-sector negotiations. The Congressional Budget Office has even said that there would be a “negligible effect” on Medicare drug spending from ending non- interference.

This structure has been successful in driving down costs. Since it was first created, federal spending has come in 45 percent below projections - the CBO estimated in 2005 that Part D would cost $172 billion in 2015, but it has cost less than half that – just $75 billion. Monthly premiums are also just half the originally projected amount, while 9 in 10 seniors are satisfied with the Part D drug coverage.

Existing Part D Negotiation Already Protects Against Price Increases

“Price protection rebates” negotiated between PBMs and manufacturers are an example of existing Part D negotiation. Today, almost 100 percent of medicines are subject to these rebates.

Under these agreements, any price increase past a predetermined threshold results in increased rebates from the manufacturers to the PBM.

In effect, this establishes a private sector ceiling or cap on the amount by which the price of a medication can increase.

On the other hand, the inflationary rebate penalty could create a perverse incentive for manufacturers to automatically increase the list price of their drugs each year to keep pace with inflation.

There is Strong Opposition from Conservative Groups and Senators

While supporters of PDPRA claim that the bill is bipartisan, there is significant opposition on the right.

An amendment to strip out the inflationary rebate penalty – the key provision of PDPRA – was supported by 13 out of 15 Republican Senators on the Finance Committee when it was offered in July.

The amendment was offered by Senator Pat Toomey (R-Pa.) and supported by Senators Mike Crapo (R-Idaho), Pat Roberts (R-Kan.), Mike Enzi (R-Wyo.), John Cornyn (R-Texas), John Thune (R-S.D.), Johnny Isakson (R-Ga.), Rob Portman (R-Ohio), Tim Scott (R-S.C.), James Lankford (R-Okla.), Steve Daines (R-Mont.), and Todd Young (R-Ind.)

There is also strong opposition from conservative groups. Almost 20 conservative groups including ATR wrote in opposition to PDPRA when the legislation was released in July.

The Rebate Penalty Does Nothing to Directly Help Seniors

Not only is the proposal unpopular and disruptive to Part D, it would do little to directly help reduce seniors drug costs. Any revenue generated from this penalty goes directly into government coffers, not to seniors that may need help affording their medicines.

The proposal may actually have the opposite effect of crowding out the existing rebates and discounts which flow through to patients.

In sum, the inflationary rebate penalty imposes a price-fixing mechanism into the Medicare Part D system by forcing manufacturers to pay a 100 percent fee if the list price of a drug increases faster than inflation. The revenue generated from this penalty would go straight to the government, and would do nothing to directly reduce drug costs. Congress should reject the PDPRA.

Photo Credit: Flickr

Posted by James Setterlund on Tuesday, February 11th, 2020, 2:52 PM PERMALINK

Americans for Tax Reform signed a coalition letter alongside other free-market organizations to encourage the Securities and Exchange Commission to abandon its plans to regulate the use of certain financial products and implement additional sales-practice rules between broker-dealers, investment advisors and their clients. The proposed rule will place onerous and unnecessary qualification requirements on American investors before they can freely purchase or sell certain securities openly traded in public markets.

The SEC plans to re-introduce a 2015 Obama era regulation that will inherently restrict investors ability to purchase a specific type of Exchange Traded Fund. Known as “geared” ETFs, these products are “leveraged”, meaning they typically offer investors the opportunity to earn two – three times the daily rate of return of a benchmark like the S&P 500. Like any investment product, they carry some form of risk, paired with the opportunity to earn higher returns. Geared ETFs have been available for investors to own for over 25 years, and are commonly purchased as short-term investments, rather than the buy and hold strategy of investing in government bonds that earn small but steady return from the interest on the bond.

If the SEC moves forward with its proposed regulation, the rule will require broker-dealers to collect detailed personal information. After the information is collected, the broker-dealer is then empowered to determine if their client or perspective client is “capable” of understanding the risks of this product. If the broker-dealers or investment advisors determine clients do not meet this arbitrary “capability” standard, clients and investors will be prohibited from purchasing these funds and denied an opportunity to own products that may help them achieve the higher rates of return they desire.

Furthermore, the recently implemented Regulation Best Interest laws already empower broker-dealers to decide what’s best for their clients, and the implementation of these proposed rules will only further burden investors. If the proposal is implemented in its current form, the SEC will have effectively placed themselves between investors and their trusted brokers or advisors allowing investors to only choose from options the government deems appropriate.

Photo Credit: arsheffield

Posted by Isabelle Morales on Tuesday, February 11th, 2020, 10:19 AM PERMALINK Follow @isabellealiciaa

ATR president Grover Norquist joined Stuart Varney on Fox Business Network's Varney & Co. on Monday to discuss Tax Cuts 2.0 and the 2020 Democratic candidates' policy proposals.

Norquist pointed out that all of the Democrats' proposed fiscal policies would roll back the growth we've seen under the current administration and make Americans' life savings worth less.

Norquist said:

"Everything the Democrats want to do—everything—will make your 401k worth less. This is the 401k/IRA election because the President's policies have made your life savings worth significantly more than you expected.

So, efforts to cut taxes and expand the availability of 401k/IRA-style savings remind people, not only how well you've done, but that we can do better... The Democrats will take away that which gave us this growth and this comeback."

Click here to watch the interview.

Posted by Alex Hendrie on Tuesday, February 11th, 2020, 8:00 AM PERMALINK

Democrats have wrongly argued that the Tax Cuts and Jobs Act has enabled corporations to avoid paying their taxes. Far-left politicians like Representative Alexandria Ocasio Cortez (D-NY) and self-avowed socialist Bernie Sanders (I-Vt.) have repeatedly raised this point.

Democrats on the Ways and Means Committee are now following this theme with a hearing called “The Disappearing Corporate Income Tax.”

There are two fundamental problems with the Democrat criticism. First, Democrats ignore the many benefits to workers and the economy from the Trump Tax Cuts. Secondly, they ignore the simple reason that some corporations are paying less than the statutory 21 percent rate – the existence of numerous credits and deductions that are designed to promote investment and job creation.

It is also important to note that companies are not using “loopholes” to lower their tax liability. They are following the law exactly as written and are paying state and local taxes as well as payroll taxes – sometimes totaling billions of dollars per year.

Many of the tax provisions that lower corporations’ effective rates are non-controversial and have bipartisan support. For instance, businesses are currently allowed to immediately deduct the cost of business assets purchased. This provision, known as full business expensing, has been supported by the Obama White House. In fact, as noted in an Obama White House document, expensing is designed to lower the effective tax rate of a business:

“A policy of allowing an immediate deduction (or ‘expensing of investment costs’) has an alternative rationale, which is to lower the effective tax rate on income derived from business investments, and thereby encourage additional demand for capital goods.”

The Organisation for Economic Co-operation and Development (OECD) has recognized that full business expensing increases GDP.

Similarly, the R&D credit was first created under President Reagan as a temporary provision and was extended by Congress more than a dozen times. It was made permanent in 2015 on a bipartisan basis and was signed into law by President Obama.

In advocating for this provision, the Obama White House noted that every $1 in tax reduction from the R&D credit creates $2 in benefits to the economy and that 80 percent of the credit is directly attributable to salaries of U.S. workers performing U.S. based research.

While the tax cuts did lower the corporate rate from 35 percent to 21 percent, this brought the U.S. rate in line with the rest of the developed world. The U.S. rate is 25.89 percent after accounting for the state corporate tax, while the average rate in the 36-country OECD is 23.52 percent.

This tax cut has also benefited the American economy and workers. Businesses have created 100,000 jobs in 34 of the 38 months that Trump has been President and the unemployment rate has been below 4 percent for 23 consecutive months. Wage growth has been at or above 3 percent for the past 18 months, according to the Bureau of Labor Statistics (BLS).

Americans are also seeing their savings increase. When Donald Trump was elected President, the Dow Jones sat at 18,332. It is now at above 29,000, an increase of more than 60 percent. This stock market growth benefits the 100 million 401(k)s, the 46.4 million households that have an individual retirement account, and the nearly $4 trillion in public pension funds, half of which is invested in stocks.

This good news is not just anecdotal – there are numerous examples of companies providing increased benefits or pay raises to their employees and of utility companies reducing rates.

Businesses have responded to the tax cuts by creating new employee benefit programs including adoption programs, workforce development programs, and education programs. For example:

Walmart and Lowes now provide $5,000 to help cover the cost of adopting a child.
Express Scripts in Missouri has created a $30 million education fund for their employees’ children.
Boeing provided $100 million in workforce development programs
McDonald’s employees who work just 15 hours a week, receive $1,500 worth of tuition assistance every year per year.

Companies have also reduced utility bills for Americans across the country. Utility companies in all 50 states are passing on the tax savings in the form of lower rates for customers. This means lower electric bills, lower gas bills, and lower water bills for Americans than if the corporate rate cut had not occurred. For example:

Arizona Public Service reduced rates by $119 million for its 2.7 million customers.
Entergy Louisiana returned $105 million in savings to consumers.
Kansas City Power and Light returned $100 million in annual savings to customers.
Massachusetts-based Unitil gave $1.6 million in rebates to customers.

Businesses have increased wages and bonuses to their employees. For example:

Wells Fargo raised base wages from $13.50 to $15.00 per hour.
AT&T provided $1,000 bonuses to 200,000 employees.
Cigna raised base wages to $16 per hour.
Apple provided $2,500 employee bonuses in the form of restricted stock.

Posted by John Kartch on Monday, February 10th, 2020, 6:36 PM PERMALINK

Tonight, President Trump will be holding a rally in Manchester, New Hampshire. New Hampshire residents are raking in the benefits of the Tax Cuts and Jobs Act, signed into law by Trump.

On Dec. 22, 2017 Trump signed the tax cuts into law. Thanks to the Tax Cuts and Jobs Act:

Tax cut: Every income group in every New Hampshire congressional district saw a tax cut.

Doubled child tax credit: 88,860 New Hampshire households are benefiting from the TCJA’s doubling of the child tax credit.

Standard deduction: 481,950 New Hampshire households are benefiting from the TCJA’s doubling of the standard deduction.

Obamacare individual mandate tax relief: 32,610 New Hampshire households are benefiting from the TCJA’s elimination of the Obamacare individual mandate tax. Most households hit with this tax made less than $50,000 per year.

Lower utility bills: As a direct result of the TCJA’s corporate rate cut, New Hampshire residents are paying lower utility bills. Lower electric, water, and gas bills help households each month, and also help small businesses operating on slim profit margins. Granite State Electric (Liberty Utilities) customers are saving on their utility bill because of the TCJA.

Connection (Merrimack, New Hampshire) -- $1,000 bonuses:

Connection (PC Connection, Inc.; NASDAQ: CNXN), a leading technology solutions provider to business, government, and education markets, today announced that it will pay a $1,000 cash bonus to each employee in consideration of their efforts for the year ended December 31, 2017.

"We are pleased to be able to provide this special reward to our valued employees for their hard work and commitment to excellence," said Timothy McGrath, CEO and President.

The Company is still evaluating all the provisions of the Tax Cuts and Jobs Act enacted on December 22, 2017, which effected numerous changes in existing tax law, including a permanent reduction in the federal corporate income tax rate. The rate reduction takes effect on January 1, 2018, and the Company currently anticipates that the net impact on its tax provision and cash taxes paid will be beneficial. -- Feb. 7, 2018 Connection press release

Franklin Savings Bank -- branch locations in Concord, Bristol, Franklin, Gilford, Merrimack, and Tilton – $1,000 bonuses:

Franklin Savings Bank announced today that it will use a portion of its tax savings to provide employees with a special bonus in recognition of their contribution to the continued success of the bank. FSB will benefit from the reduction in corporate tax rates, and has chosen to share the savings with its employees. All employees will receive a $1,000 bonus.

“Our employees consistently go ‘above and beyond’ for our customers and the communities we serve,” said Ron Magoon, President & CEO. “This bonus is another opportunity to thank them for their outstanding commitment, dedication and service.” – Feb. 26 2018, Franklin Savings Bank press release excerpt

Portsmouth Brewery (Portsmouth, New Hampshire) – The founder of the brewery said that the tax cut allowed the company to hire more employees and invest in new equipment:

"For a small brewery like us, we make about 1,000 barrels a year,” said Peter Egelston, founder of Portsmouth Brewery. “So saving $3.50 per barrel, you can do the math, that's about $3,500 in savings. That may not sound like a lot of money, but it is."

The tax cut was set to expire at the end of 2019, but with support from Congress, Trump signed a one-year extension.

"That's money going back into small businesses, and it's being used to invest in equipment,” said Egelston. “It's being used to hire more people. It's being used in a lot of different ways. That’s a choice each individual business can make. When they get a windfall like a reduced tax rate, they can either keep that money in the business or they can pass it along to the consumer in the form of lower prices." – Jan. 1, 2020, WMUR article.

Waste Management Inc. (Multiple locations in New Hampshire) -- $2,000 bonuses:

In light of the meaningful contributions of its employees and the new U.S. corporate tax structure, the company will distribute US $2,000 in 2018 to every North American employee not on a bonus or sales incentive plan; that includes hourly and other employees.

“We are about to get a tax benefit as our U.S. corporate tax rate goes from 35 percent to 21 percent. In considering how to best spend that, we wanted to find a way to help grow our economy, which in turn, will help grow our business, and give some of the tax savings back to those hardworking employees who do not get the opportunity to participate in our salaried incentive plans,” said Jim Fish, president and chief executive officer, Waste Management.

“So, we are offering each North American hourly full-time employee and salaried employee who does not participate in any sales incentive or bonus plan during 2018, a cash bonus of US $2,000 to show our appreciation to so many of our valued employees while growing our business and returning a good portion of the tax savings directly to the overall economy,” he continued. – Jan. 10 2018, Waste Management Inc. press release excerpt

Pentucket Bank -- branch locations in Hampstead and Salem -- $500 bonuses, increased wages, and increased educational opportunties.

Apple (Apple store locations in Manchester, Nashua, Salem) - $2,500 employee bonuses in the form of restricted stock units; Nationwide, $30 billion in additional capital expenditures over five years; 20,000 new employees will be hired; increased support of coding education and science, technology, engineering, arts, and math; increased support for U.S. manufacturing.

AT&T -- $1,000 bonuses to 171 New Hampshire employees; Nationwide, $1 billion increase in capital expenditures:

Today, Congress approved legislation representing the first comprehensive tax reform in a generation. The President is expected to sign the bill in the coming days.

T.J. Maxx – 16 stores in New Hampshire – tax reform bonuses, retirement plan contributions, parental leave, enhanced vacation benefits, and charitable donations:

Associates

A one-time, discretionary bonus to eligible, non-bonus-plan Associates, globally
An incremental contribution to the Company’s defined contribution retirement plans for eligible Associates in the U.S. and internationally
Instituting paid parental leave for eligible Associates in the U.S.
Enhancing vacation benefits for certain U.S. Associates

Communities

Made meaningful contributions to TJX’s charitable foundations around the world to further support TJX’s charitable giving. – Feb. 28, 2018 The TJX Companies Inc. press release excerpt

Best Buy -- Nine store locations in New Hampshire -- $1,000 bonuses for full-time employees; $500 bonuses for part-time employees. Over 100,000 employees will receive bonuses:

Best Buy is the latest major corporation to hand out bonuses to its employees as a result of the recently passed corporate tax reform.

In a letter sent to employees Friday afternoon, CEO Hubert Joly said full-time employees will receive a one-time bonus of $1,000 and part-time employees $500.

All permanent employees who are not on an existing bonus plan will receive the additional funds. The bonuses are expected to show up in their paychecks this month.

In all, more than 100,000 of Best Buy’s 125,000 employees in the U.S., Mexico and Canada are slated to receive the extra payouts.

In addition, Best Buy is making a one-time contribution of $20 million to the Best Buy Foundation to help further expand its teen tech centers and Geek Squad Academies across the U.S.

“Our goal was simple: to say ‘thank you’ to more than 100,000 of our employees and help accelerate our work to bring much needed technology training to 1 million underserved teens a year,” said Jeff Shelman, a Best Buy spokesman. — Feb. 2 2018, Minneapolis Star Tribune

Granite State Electric (Liberty Utilities) (Salem, New Hampshire) – The utility will pass along tax cuts savings to customers:

In this order, the Commission approves a distribution revenue decrease for Liberty Utilities, passing on to ratepayers the benefits of reduced corporate taxes resulting from recent changes to state and federal tax laws. This order also approves Liberty’s proposal to forego other distribution rate increases that were scheduled to take effect June 1, 2018, as a way to pass additional benefits of corporate tax reductions on to customers. – http://www.puc.state.nh.us/Regulatory/Orders/2018orders/26139e.pdf

Cintas (Chelmsford, New Hampshire) -- $1,000 bonuses for employees of at least a year, $500 for employees of less than a year.

Home Depot -- 20 locations in New Hampshire, bonuses for all hourly employees, up to $1,000.

Lowe's --1,000 employees at 13 stores in New Hampshire; Employees will receive bonuses of up to $1,000 based on length of service, for 260,000 employees; expanded benefits and maternity/parental leave; $5,000 of adoption assistance.

Ryder (Three locations in New Hampshire) – Tax reform bonuses.

CarMax (Location in Manchester, New Hampshire) – $250-$1,500 bonuses depending on length of service:

“The nation’s largest retailer of used cars, announced plans to provide one-time bonuses to most hourly and commissioned full-time and part-time associates as a result of the recently passed Tax Cuts and Jobs Act of 2017. Bonus amounts will vary from $200 up to $1,500 based on length of service with the company.” – Feb 23. 2018, EPR Retail News article excerpt

Walmart - New Hampshire employees at 27 Walmart stores received tax reform bonuses, wage increases, and expanded maternity and parental leave. Walmart employees who adopt children will be given $5,000 to help cover expenses.

Starbucks Coffee Company (Multiple locations in New Hampshire) – $500 stock grants for all retail employees, $2,000 stock grants for store managers, and varying plan and support center employee stock grants. Nationally, 8,000 new retail jobs; an additional wage increase this year, totaling approximately $120 million in wage increases, increased sick time benefits and parental leave.

FedEx (Multiple locations in New Hampshire) – Accelerated and increased compensation; pension plan contributions:

“FedEx Corporation is announcing three major programs today following the recently enacted U.S. Tax Cuts and Jobs Act:

Over $200 million in increased compensation, about two-thirds of which will go to hourly team members by advancing 2018 annual pay increases by six months to April 1st from the normal October date. The remainder will fund increases in performance- based incentive plans for salaried personnel.
A voluntary contribution of $1.5 billion to the FedEx pension plan to ensure it remains one of the best funded retirement programs in the country.
Investing $1.5 billion to significantly expand the FedEx Express Indianapolis hub over the next seven years. The Memphis SuperHub will also be modernized and enlarged in a major program the details of which will be announced later this spring.

FedEx believes the Tax Cuts and Jobs Act will likely increase GDP and investment in the United States. – Jan. 26 2018, FedEx press release

Chipotle Mexican Grill (Multiple locations in New Hampshire) – Bonuses ranging from $250 to $1,000; increased employee benefits; $50 million investment in existing restaurants.

Comcast (Multiple locations in New Hampshire) -- $1,000 bonuses; nationwide, at least $50 billion investment in infrastructure in next five years.

U-Haul (Multiple locations in New Hampshire) – $1,200 bonuses for full-time employees, $500 for part-time employees.