Posted by Mike Palicz on Friday, September 3rd, 2021, 6:33 PM PERMALINK Follow @Mike_Palicz
Democrats may impose a national plastic tax to finance their $3.5 trillion ($3,500,000,000,000) tax and spending spree, according to a leaked Senate Finance Committee document.
The document lists a "Plastics Excise Tax" which will "impose a $.20 per pound fee on the sale of virgin plastic." Virgin plastic is a vital material in medical devices and products, clothing, toys, and thousands of household products. The authenticity of the document was confirmed by NBC News.
"The Democrats' tax on plastics is a tax on every middle income American 50 times a day," said Grover Norquist, president of Americans for Tax Reform. "For Dustin Hoffman in The Graduate, the answer was 'plastics.' The question was, 'What will Democrats tax next?'"
The proposed tax hike appears to be modeled off of legislation introduced in early August by Sen. Sheldon Whitehouse (D-Beach Club), one of the most progressive members of the Senate.
The burden of the tax would be borne by consumers in the form of higher prices for everyday household goods.
Violates President Biden’s $400,000 Tax Pledge
The national plastic tax would violate President Biden’s pledge not to raise any form of tax on anyone making less than $400,000 per year. Even the White House has raised this concern. A recent Reuters story detailing Democrats proposed carbon border tax claimed, “the White House is concerned the Democrats' proposal will raise prices on a host of consumer goods, from cars to appliances, and conflict with Biden's pledge not to tax any American earning less than $400,000 per year.” The same logic applies to the plastic tax now under consideration.
Additional Taxes Democrats Plan to Impose:
Trillions in new tax increases on working families and small businesses. The recently-passed budget resolution is the first step toward the Biden plan to raise taxes by $3 trillion over the next decade. Some of these tax increases include:
$80 billion in new IRS funding to hire 87,000 new agents. This would allow the IRS to audit and harass small businesses and American families for an additional $787 billion. It would hire enough new IRS agents to fill Nationals Park twice.
It would help implement the Biden plan to create a new comprehensive financial account information reporting regime which would force the disclosure of any business or personal account that exceeds $600.
Not only would this include the bank, loan, and investment accounts of virtually every individual and business, but it would also include third-party providers like Venmo, CashApp, and PayPal.
New IRS funding will also be a boon to the union that represents IRS employees. This union, the National Treasury Employees Union (NTEU), shovels 97 percent of their money into Democrat campaign coffers.
IRS employees also regularly perform union work on the taxpayer’s dime. In 2019, 1,421 IRS and other Treasury Department employees spent 353,820 hours of taxpayer-funded union time (TFUT), costing the federal government $17.27 million.
Socialist healthcare policies such as H.R. 3, the Pelosi plan to impose new taxes and government price controls on American medical innovation. This legislation creates a 95 percent excise tax on manufacturers and imposes an international reference pricing scheme that directly imports foreign price controls into the U.S.
This proposal will reduce access to new, lifesaving and life-preserving medicines. According to research by the Galen Institute, the U.S. had access to 90 percent of new cures launched between 2011 and 2018, a rate far greater than comparable foreign countries. For instance, The United Kingdom had access to 60 percent of medicines, Japan had 50 percent, and Canada had just 44 percent.
It will also threaten high-paying manufacturing jobs across the country at a time when we are just emerging from the economic wreckage from the pandemic. Pharmaceutical manufacturers invest $100 billion in the U.S. economy every year, directly supporting 800,000 jobs including jobs in every state.
Trillions in new welfare spending that will allow the federal government to promote woke policies. This includes:
This $3.5 trillion spending package is a reckless proposal that will lead to increased taxes on working families and small businesses and trillions in new spending on welfare programs and woke policies.
Americans for Tax Reform urges all Members of Congress to oppose all of the above tax increases.
Photo Credit: Third Way
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Posted by Mike Palicz on Friday, September 3rd, 2021, 6:33 PM PERMALINK Follow @Mike_Palicz
Democrats may impose a national plastic tax to finance their $3.5 trillion ($3,500,000,000,000) tax and spending spree, according to a leaked Senate Finance Committee document.
The document lists a "Plastics Excise Tax" which will "impose a $.20 per pound fee on the sale of virgin plastic." Virgin plastic is a vital material in medical devices and products, clothing, toys, and thousands of household products. The authenticity of the document was confirmed by NBC News.
"The Democrats' tax on plastics is a tax on every middle income American 50 times a day," said Grover Norquist, president of Americans for Tax Reform. "For Dustin Hoffman in The Graduate, the answer was 'plastics.' The question was, 'What will Democrats tax next?'"
The proposed tax hike appears to be modeled off of legislation introduced in early August by Sen. Sheldon Whitehouse (D-Beach Club), one of the most progressive members of the Senate.
The burden of the tax would be borne by consumers in the form of higher prices for everyday household goods.
Violates President Biden’s $400,000 Tax Pledge
The national plastic tax would violate President Biden’s pledge not to raise any form of tax on anyone making less than $400,000 per year. Even the White House has raised this concern. A recent Reuters story detailing Democrats proposed carbon border tax claimed, “the White House is concerned the Democrats' proposal will raise prices on a host of consumer goods, from cars to appliances, and conflict with Biden's pledge not to tax any American earning less than $400,000 per year.” The same logic applies to the plastic tax now under consideration.
Additional Taxes Democrats Plan to Impose:
Trillions in new tax increases on working families and small businesses. The recently-passed budget resolution is the first step toward the Biden plan to raise taxes by $3 trillion over the next decade. Some of these tax increases include:
$80 billion in new IRS funding to hire 87,000 new agents. This would allow the IRS to audit and harass small businesses and American families for an additional $787 billion. It would hire enough new IRS agents to fill Nationals Park twice.
It would help implement the Biden plan to create a new comprehensive financial account information reporting regime which would force the disclosure of any business or personal account that exceeds $600.
Not only would this include the bank, loan, and investment accounts of virtually every individual and business, but it would also include third-party providers like Venmo, CashApp, and PayPal.
New IRS funding will also be a boon to the union that represents IRS employees. This union, the National Treasury Employees Union (NTEU), shovels 97 percent of their money into Democrat campaign coffers.
IRS employees also regularly perform union work on the taxpayer’s dime. In 2019, 1,421 IRS and other Treasury Department employees spent 353,820 hours of taxpayer-funded union time (TFUT), costing the federal government $17.27 million.
Socialist healthcare policies such as H.R. 3, the Pelosi plan to impose new taxes and government price controls on American medical innovation. This legislation creates a 95 percent excise tax on manufacturers and imposes an international reference pricing scheme that directly imports foreign price controls into the U.S.
This proposal will reduce access to new, lifesaving and life-preserving medicines. According to research by the Galen Institute, the U.S. had access to 90 percent of new cures launched between 2011 and 2018, a rate far greater than comparable foreign countries. For instance, The United Kingdom had access to 60 percent of medicines, Japan had 50 percent, and Canada had just 44 percent.
It will also threaten high-paying manufacturing jobs across the country at a time when we are just emerging from the economic wreckage from the pandemic. Pharmaceutical manufacturers invest $100 billion in the U.S. economy every year, directly supporting 800,000 jobs including jobs in every state.
Trillions in new welfare spending that will allow the federal government to promote woke policies. This includes:
This $3.5 trillion spending package is a reckless proposal that will lead to increased taxes on working families and small businesses and trillions in new spending on welfare programs and woke policies.
Americans for Tax Reform urges all Members of Congress to oppose all of the above tax increases.
Photo Credit: Third Way
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Posted by Isabelle Morales on Friday, September 3rd, 2021, 10:20 AM PERMALINK Follow @IsabelleAliciaa
The U.S. economy added just 235,000 jobs in August. This is a far cry from estimates which predicted the economy would add 720,000 jobs. The US is still 5.2 million jobs short from its pre-pandemic employment.
8.4 million Americans are still out of work and millions of Americans are still underemployed. About 4.5 million workers are employed part-time for economic reasons, meaning they would prefer to work full-time, but cannot gain the hours needed to do so.
Not only has job growth been disappointing under the Biden administration, but inflation has been surging as well. Consumer prices increased by 5.4 percent on an annualized basis in July, according to the Bureau of Labor Statistics (BLS). In January 2021, before Joe Biden took over the presidency, annual inflation was at a stable 1.4 percent. If wages cannot keep up with inflation, purchasing power will continue to erode.
Given the economy remains weak, now is not the right time to impose Biden's multi-trillion tax hike on small businesses, working families, and investment.
- Biden’s tax hikes would eliminate one million jobs in the first two years and would eliminate 600,000 jobs per year over the first decade, according to a study by economists John W. Diamond and George R. Zodrow.
- President Biden and congressional Democrats want to raise the corporate rate to 28 percent, higher than communist China's 25 percent rate. A corporate tax hike would be borne by workers and consumers. As noted by Stephen Entin of the Tax Foundation, workers bear nearly 70 percent of the cost of a corporate tax through lower wages and fewer jobs. Further, a 2020 study by the National Bureau of Economic Research found that 31% of the corporate tax falls on consumers. This tax hike would hit many small businesses as well. Over one million C-corporations are classified as small businesses, defined by the Small Business Administration as any independent business with fewer than 500 employees.
- President Biden and congressional Democrats want to double the capital gains rate, making the average top capital gains rate 48.8 percent after state taxes. This tax hike will threaten business creation, business expansion, entrepreneurship, retirement savings, and jobs and wages.
- Democrats are also proposing the creation of a second Death Tax by repealing step-up in basis. This will impose the capital gains tax (which Biden has proposed raising to 43.4 percent) on the unrealized gains of every asset owned by a taxpayer when they die and will be imposed in addition to the existing 40 percent Death Tax. It will force predominantly family-owned businesses to downsize and liquidate assets, leading to fewer jobs, lower wages, and reduced GDP. In fact, 78 percent of small business owners say that Democrats’ repeal of step-up in basis would have crippling consequences for small businesses.
- Democrats have pushed for increasing the top income tax rate to 39.6 percent. This tax increase will hit small business that are organized as sole proprietorships, LLCs, partnerships and S-corporations. These “pass-through” entities pay taxes through the individual side of the tax code. Of the 26 million businesses in 2014, 95 percent were pass-throughs. Pass-through businesses also account for 55.2 percent, or 65.7 million of all private sector workers. More than half of all pass-through income would be taxed at this new, higher rate.
Today's disappointing jobs report shows that we still have a long way to go to fully recover from the economic damage the pandemic caused. With the U.S. economy still 5.2 million jobs short from pre-pandemic level, now is an especially bad time to impose $3.5 trillion in job-killing, growth-killing tax hikes.
Photo Credit: Andreas Klinke Johannsen
Posted by Bryan Bashur on Thursday, September 2nd, 2021, 5:58 PM PERMALINK
Last month, Senate Finance Chairman Ron Wyden (D-Ore.) introduced legislation that would severely increase the tax burden on the multi-trillion-dollar derivatives market. There is a chance that the looming $3.5 trillion budget reconciliation bill could include this tax hike on derivatives contracts, which would harm everyday investors trading on platforms such as Robinhood, SoFi, FTX, and CME Group.
Individuals who trade derivatives on brokerage apps will be negatively affected by this tax change. This is especially concerning since retail investing in equity options is on the rise. According to data from the Options Clearing Corporation, and reported by Reuters, in January U.S. equity options increased by 70%. Additionally, Robinhood alone has 18 million user accounts. In the second quarter of 2021, Robinhood made $180 million in order flow revenue. Out of that, $111 million was from options trading. That is over 60% of revenue from options.
It is safe to say that derivatives trading is not just for the rich. Anyone with a smart phone can buy or sell derivatives contracts. This is just another example of how technological advances are allowing retail investors to breach the traditionally closed off world of finance.
Senator Wyden’s legislation, the Modernization of Derivatives Tax Act of 2021 (S. 2621), imposes a tax burden that is two-fold.
First, the bill taxes derivatives transactions at ordinary income rates and applies the tax to unrealized gains for derivative transactions prior to completion of the contract. Thus, taxes will be required to be paid annually even if the derivatives contract has not been settled. This is incredibly alarming. Individuals will be required to pay taxes even when there has been no real gain from the derivative. What incentive do individuals have to invest in derivatives if they will constantly have to pay taxes for holding the asset even when no actual gains are being made? There will be very little incentive to invest at all.
Second, the bill could require investors who execute derivatives with respect to a stock position they hold, to recognize built-in gain on the stock, and potentially pay tax annually on the current market value (mark-to-market) of the stock position in perpetuity. Again, another provision that will certainly stymie private investment.
The provisions of this bill will only add to investors’ compliance burden.
The derivatives impacted by Wyden’s bill include certain futures contracts, swaps, and options.
Certain derivatives are currently taxed at a top rate of 23.8%. But changing statute to tax these transactions as ordinary income opens the tax burden to increase to upwards of 43.4% if the budget reconciliation bill raises the top rate to 39.6%. Not to mention additional state taxes.
Specifically, passage of Sen. Wyden’s bill could severely hamper any growth for the nascent cryptocurrency derivatives market in the United States. Overburdensome government regulation across the globe has already stymied Binance’s crypto derivatives services. The last thing the U.S. should do is follow suit and implement a tax regime that will raise taxes on individuals who participate in the derivatives markets through free online brokerage accounts.
Democrats falsely claim this measure will close tax loopholes for the super-rich. But make no mistake, this tax-grab will harm all individuals who trade futures, options, and swaps.
The Joint Committee on Taxation estimated that this bill would raise $16.5 billion over 10 years. However, raising $1.65 billion in revenue annually pales in comparison to the subsequent decline of derivatives trading overall that will likely occur in the $15.8 trillion derivatives market because of the increased tax burden. Enactment of Wyden’s bill will chill derivatives trading activity and may lower revenue for the federal government.
Members of Congress should oppose this tax increase and its potential inclusion in the budget reconciliation bill. “Closing loopholes” and cracking down on “tax avoidance” have become a recent clarion call of the Democratic party to raise taxes on middle-class Americans. But all retail investors should be aware that this new tax regime is not only going to affect the wealthy, it will affect you too.
Photo Credit: Tech Daily
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Posted by Drew Carlson on Thursday, September 2nd, 2021, 1:50 PM PERMALINK
Today Americans for Tax Reform released an updated list of the 50 states ranked by the size of their state government, using state spending as a percentage of state GDP as the metric for comparison. The state spending data comes from the National Association of State Budget Officers’ annual state spending surveys and the state GDP figures come from the U.S. Bureau of Economic Analysis.
In addition to looking at the size of all 50 state governments today, ATR examined how the sizes of all 50 state governments have changed over the past decade.
Size of State Governments Today (2019)
Fastest Growing State Governments of the Last 5 years:
Fastest Shrinking State Governments of the Last 5 years:
Fastest Growing State Governments of the Last 10 Years:
Fastest Shrinking State Governments of the Last 10 years:
Photo Credit: Martin Falbisoner
Posted by Karl Abramson on Wednesday, September 1st, 2021, 8:21 PM PERMALINK Follow @karlabramson
The philanthropic wing of American billionaire Mike Bloomberg, Bloomberg Philanthropies, has been exposed for effectively buying off the Food and Drug Administration (FDA) of the Philippines in exchange for the implementation of unpopular, anti-science policies related to tobacco and nicotine products. In a report approved by a committee of the Filipino legislature, lawmakers expressed outrage and demanded an investigation into the scheme, a signal that there may be more evidence yet to be presented regarding Bloomberg’s money-driven influence over Philippines’ FDA.
The report, which was overwhelmingly approved by the House Committee on Good Government and Public Accountability, outlined how FDA and Bloomberg Philanthropies colluded, using regulatory methods, to discriminate against the legal tobacco industry. In the process, Bloomberg Philanthropies and their associates at FDA violated Philippine law. There is now an opportunity for Philippine authorities to hold Bloomberg and his allies legally accountable for their infringements.
It has long been public knowledge that Mike Bloomberg holds radical anti-tobacco views. Unfortunately, his opinions extend to non-combustible nicotine products like e-cigarettes, Swedish snus, heated tobacco products (HTP’s), and pouches. E-cigarettes have been shown to be at least 95% less harmful than cigarettes, and an incredibly effective method of getting people who smoke to quit. Swedish snus is a clean tobacco product that exposes users to significantly less toxins than cigarettes and is the reason why Sweden has one of the lowest lung cancer rates in the world. Similarly, HTP’s reduce the user's exposure to harmful chemicals by heating, rather than burning, tobacco to create a vapor.
Mike Bloomberg, however, could care less about the lifesaving impacts that reduced harm alternatives have. His policy proposals make it clear thar he would prefer smokers die from their addiction than make the switch to a safer product. His actions in the Philippines are proof that he will stop at nothing to use his money to purchase influence over the policies of sovereign countries. As some have put it, Bloomberg utilizes a unique method of “philanthro-colonialism” to gain control over a country’s political system under the guise of “philanthropy” intended to improve the lives of their citizens.
Key findings from the report can be read below, while the full report can be accessed here.
The Committee determined that the decision by FDA to partner with Bloomberg Philanthropies was questionable due to Bloomberg’s “avowed policy to ban or restrict the use of tobacco and novel tobacco products”.
FDA failed to disclose, in detail, its receipt of foreign donation. This is a potential violation of Philippine law and the report calls on the State Auditor General to investigate the validity of FDA’s receipt.
In response to Bloomberg’s scheme, the Committee recommended the Filipino Congress pass a bill prohibiting foreign donors from engaging in donation-for-policy conspiracies with government offices.
Bloomberg Philanthropies violated Philippine law by not obtaining the necessary registration permits to lobby the government as a foreign agent. This is direct breach of the Foreign Agents Registration Act.
The report recommends mandating FDA and Ministry of Health to disclose all foreign donations with detailed receipts.
The report sends a strong warning to FDA that they must now act with full transparency. They cannot accept monetary grants from anti-tobacco groups, or any groups, in exchange for implementing predetermined policies. The decision to release the report now is timely as the Philippine Senate is currently considering a bill that would remove FDA’s ability to regulate e-cigarettes, vaping products, and HTP’s.
Supporters of government transparency are pushing for this bill to pass, as it would force Philippine authorities to consider the overwhelming science and data in support of these products. Should FDA be allowed to determine such regulations, that data would almost surely be pushed aside in favor of Bloomberg’s extremist ideology. The public health ramifications of that would be catastrophic.
Sadly, Bloomberg’s philanthro-colonialism is not unique to the Philippines. Bloomberg Philanthropies has donated more than three billion dollars to the World Health Organization, a significant portion of that going towards a “Bloomberg Initiative to reduce tobacco”.
In Armenia, where more than half of all men smoke cigarettes, restrictive vaping laws have begun to emerge. According to Armenia’s Health Minister, their funding for tobacco control comes from the World Health Organization, Bloomberg Philanthropies, and Campaign for Tobacco Free Kids (CTFK). CTFK receives nearly all their funding from Bloomberg Philanthropies.
In Vietnam, Bloomberg’s “deep collaboration with government and local organizations” resulted in a plan, currently under consideration, to completely prohibit all e-cigarettes. As a result, millions of Armenians and Vietnamese will unnecessarily die from cigarette smoking as they are actively being discouraged from making the lifesaving switch to vaping.
It is near certain that the same tactics Bloomberg utilized in the Philippines are being used by groups funded by him in dozens of other countries around the world. Those nations would be well served by enacting the same stringent policies protecting against pay-for-play schemes related to tobacco products, or any industry for that matter, as are currently under consideration in the Philippine Congress. As is evident in the Philippines, Vietnam, and Armenia, millions of lives depend on legislators taking a stand against the undue influence of foreign wealth over a nation’s domestic policies.
Photo Credit: Center for American Progress
Posted by Rowan Saydlowski on Wednesday, September 1st, 2021, 4:28 PM PERMALINK Follow @rsaydlowski
The European Union recently announced that it will be imposing a digital services tax (DST) in the bloc’s long-term budget under a new label of a “digital levy”.
The announcement was revealed this week by EU Budget Commissioner Johannes Hahn, who said the DST along with several other new taxes will be implemented to help Europe cover the cost of its massive government spending, effectively trying to make the United States pay for Europe’s COVID relief in addition to our own. Digital services taxes are discriminatory taxes that unfairly target large American technology companies that do business abroad and transfer American wealth to foreign governments.
The Trump Administration had opened an investigation into the European Union’s plans to implement a DST last year, but President Biden’s U.S. Trade Representative Katherine Tai ended the investigation shortly after she was appointed as trade chief in March. All other investigations into similar digital taxes concluded that they are discriminatory. In place of the investigation, the Biden Administration entered into negotiations at the Organization for Economic Cooperation and Development (OECD) that they claimed could eliminate DSTs from other countries while implementing a global minimum corporate tax rate instead.
The United States agreed to this global minimum tax––which would ban countries around the world from lowering their corporate tax rates below 15%––with no enforcement mechanism set in place to ensure that DSTs would not arise. Sure enough, Europe appears to already be reneging on their pledge to eliminate their digital tax plans in return for a global tax agreement. In a further attempt at obfuscation, European officials changed the term “digital tax” to their new term “digital levy” in order to argue that their DST is not actually a violation of the global agreement.
Brussels isn’t the only trading partner implementing DSTs now that the U.S. is wrapped up in the OECD’s global tax agreement. Tanzania also recently decided to implement a DST of their own, which will hurt U.S. companies operating in the African country. The dominoes certainly won’t end with Europe and Tanzania; more digital services taxes are likely to be crafted in countries around the world as American jobs and wealth are shipped abroad unimpeded by the Biden Administration.
It was a tremendous mistake for President Biden to enter into the destructive global minimum tax agreement that harms Americans without an enforceable method of preventing digital services taxes from arising or any clear benefit to the United States. The Biden Administration and Congress should reject the global tax agreement and OECD deal and renew their fight against DSTs to ensure that this mistake does not endure.
Photo Credit: Thijs ter Haar
Posted by John Kartch on Wednesday, September 1st, 2021, 1:37 PM PERMALINK Follow @johnkartch
"I'm trying to sound the alarm both economically and politically for Democrats."
Today on CNBC's SquawkBox, Democratic former North Dakota Sen. Heidi Heitkamp sent a warning to Democrats who are thinking about killing stepped-up basis. Taking away stepped-up basis -- as President Biden has proposed -- would impose a second Death Tax on the American people:
"I'm trying to sound the alarm both economically and politically for Democrats, that this is not a path to walk, which is taxing unrealized gain.
You can look at different strategies for stepped-up basis, for realizing some income tax when that asset is eventually sold, but the disruption that this would create for small family businesses and for farmers and for family assets is just not worth the pain. In fact, ironically when it's polled, 70% of democrats agree with me that death should not be the taxable event."
Click here or below to view the video clip:
Posted by Dennis Hull on Wednesday, September 1st, 2021, 12:37 PM PERMALINK
A bill to slash property taxes by at least $2 billion was passed unanimously by the Texas Senate Finance Committee this week on August 30, clearing the way for final approval by the Senate. This bipartisan tax relief plan, Senate Bill 91, takes aim at the state’s onerous school district Maintenance and Operations (M&O) taxes. Known as the “Robinhood Tax,” M&O property taxes are imposed by Texas municipalities and account for nearly half of the total annual property tax burden, totaling $56 billion last year.
SB 91 would allocate at least $2 billion and up to $4 billion in state dollars to pay down local M&O taxes, creating substantial tax relief for Texans. For the owner of a median $300,000 home, tax savings under the new bill will come out to about $200 next year, according to Senator Paul Bettencourt, the author and primary sponsor of the tax plan.
“Texans will see a reduction of at least 6.6 pennies on their school district tax rate in the 2022 property tax year,” said Bettencourt at Monday’s Finance Committee hearing. “Each billion available for compression will lower the M&O tax rate for all property owners in Texas.”
This new round of tax relief is contingent upon a revenue trigger being met. The total amount of tax savings under the new bill will depend on a key revenue estimate for the 2022-23 fiscal year, to be provided by the Texas Comptroller on June 1, 2022. If the Texas economy continues to grow at its current pace, school district M&O taxes could be lowered by as much as $4 billion as surplus state tax revenue subsidizes local property taxes.
Vance Ginn, chief economist at the Texas Public Policy Foundation, testified in favor of SB 91 at Monday’s hearing. Ginn points out that property taxes are inefficient, as they rely on subjective valuations by appraisal review boards, and can often force people out of their homes if not paid, meaning no one truly owns their property in Texas. Moreover, Ginn argues, property taxes tend to hurt low- and fixed-income earners the most. Booming housing markets, of which Texas has many, lead to rising home valuations and higher property taxes, regardless of the homeowner’s ability to afford the additional tax burden.
Not only is property tax relief clearly needed, Texans are demanding it. Recent polls show that 82% of Texans consider property taxes to be a “serious issue,” while more than two-thirds would be upset if no legislative action is taken to lower property taxes this year. Their concerns are valid; over the last 20 years, local property taxes have grown faster than the average taxpayer’s ability to pay for them, helping make Texas the state with the 7th worst property tax burden on homeowners.
By passing SB 91, Texas legislators can heed the advice of Americans for Tax Reform and its coalition partners to ease a crushing tax burden on Texas families. “Texans cannot afford to wait until 2023 for the Legislature to address these issues,” noted a joint statement released on Monday by the Texas Public Policy Foundation, the Texas Conservative Coalition Research Institute, and Americans for Tax Reform. “Not only is the burden too high, but the system is designed to allow insatiable local governments to keep squeezing every last dime out of taxpayers.”
SB 91 now awaits a full vote in the Texas Senate and subsequent votes in the House before it can go to Governor Greg Abbott’s desk. ATR will be following this legislation closely.
Photo Credit: LoneStarMike
Posted by Michael Mirsky on Tuesday, August 31st, 2021, 4:00 PM PERMALINK
A broad coalition of New Jersey business groups including the African American Chamber of Commerce and the Statewide Hispanic Chamber of Commerce wrote a letter to the New Jersey Congressional delegation voicing opposition to President Biden's proposed tax increases.
The letter, signed by 96 groups, laid out the economic pitfalls of raising the corporate tax rate and taxation of Global Intangible Low-Tax Income (GILTI).
As noted in the letter:
New Jersey already has the highest state corporate tax in the nation, and the contemplated federal increase would be additionally destructive to New Jersey’s economy, subjecting our corporations to among the highest tax rates in the world.
Similarly, this increase in the corporate rate will make New Jersey businesses uncompetitive with the rest of the world:
New Jersey’s combined rate, with the discussed federal increase to 25%, would be 33.6%. The worldwide average corporate tax rate is estimated at about 24%, so New Jersey could surpass that by about 40%.
The coalition also voiced their concerns over the proposed increase in the taxation of GILTI:
A GILTI increase will push multi-national businesses to leave New Jersey and seek out states with lower GILTI rates, because we are already a GILTI outlier in how harshly we treat it at the state level.
A less competitive corporate tax rate would exacerbate substantial affordability issues faced by New Jersey residents, including:
Having the highest property taxes in the nation, some of the highest personal income tax rates and the general high cost of living and doing business.
If these tax increases go into effect, it would be detrimental to the investments that New Jersey businesses so badly need:
Spending on innovation and infrastructure would be curtailed, and needed advancements in broadband, R&D and manufacturing capital would be stymied.
The letter concludes with a plea to the administration to consider the consequences of their near-sighted actions:
New Jersey businesses are at a critical juncture as we attempt to survive and recover from the impacts of COVID-19, and we ask you to help move our economy in the right direction – the opposite of this disastrous tax increase proposal.
A link to the full letter can be found here.
[See also: Biden Tax Hikes Largest Since 1968]
Posted by John Kartch and Michael Mirsky on Tuesday, August 31st, 2021, 3:03 PM PERMALINK Follow @JohnKartch
If Tester enacts a corporate income tax rate increase, he will have to explain why he just increased your utility bills
If President Biden and Senator Jon Tester hike the corporate income tax rate, Montana households and businesses will get stuck with higher utility bills as the country tries to recover from the pandemic.
Democrats plan to impose a corporate income tax rate increase to 28%, even higher than communist China's 25%. This does not even include state corporate income taxes, which average 4 - 5% nationwide.
Customers bear the cost of corporate income taxes imposed on utility companies. Corporate income tax cuts drive utility rates down, corporate income tax hikes drive utility rates up.
Electric, gas, and water companies must get their billing rates approved by the respective state utility commissions. When the 2017 Tax Cuts and Jobs Act cut the corporate income tax rate from 35% to 21%, utility companies worked with state officials to pass along the tax savings to customers, including at least two Montana utilities.
The savings typically come in the form of a rate reduction, a bill credit, or a reduction to an existing or planned rate increase.
According to a report published in the trade publication Utility Dive, customers nationwide were to receive a $90 billion utility benefit from the Tax Cuts and Jobs Act:
Estimates derived from 2017 annual SEC 10-K filings indicate that the 14-percentage-point reduction in the corporate tax rate enacted under the 2017 Tax Cuts and Jobs Act (TCJA) resulted in investor-owned utilities establishing significant regulatory liability balances, totaling approximately $90 billion to be refunded back to customers.
Americans for Tax Reform has compiled a 90-second nationwide utility savings video from local news reports which may be viewed here.
If Democrats now impose a corporate income tax rate increase, they will have to reckon with local news coverage noting utility bills are going up. A vote for a corporate income tax hike is a vote for higher utility bills as households try to recover from the pandemic.
Tax Cuts and Jobs Act Impact: Working with the Montana Public Service Commission, Montana-Dakota Utilities and NorthWestern Energy passed along tax savings to customers.
Montana-Dakota Utilities: As noted in a 2018 Montana Public Service Commission release:
The Montana Public Service Commission voted unanimously to approve an agreement for Montana-Dakota Utilities’ electric business to refund to consumers the benefits they received from the Tax Cuts and Jobs Act. The agreement, or Stipulation, calls for a $1.5 million consumer refund as a result of the TCJA.
NorthWestern Energy: As noted in this April 3, 2018 Billings Gazette article excerpt:
The tax savings stem from the Republican Tax Cuts and Jobs Act, which Congress passed in December and was signed into law by President Donald Trump. Federal corporate tax rates fell from 35 percent to 21 percent.
Regulated utilities like NorthWestern cannot pocket the savings, which must be shared with ratepayers, who also pay the utilities' taxes. NorthWestern has about 345,000 customers in Montana.
NorthWestern is proposing that its natural gas customers receive direct refunds for the entire $3.154 million in tax breaks associated with the utility’s natural gas business. The company’s electric customers would receive half of the $10.8 million in tax breaks associated with NorthWestern’s electric business. Half the money would be spent removing hazard trees that pose a fire or outage risk.
“With what we proposed, for a natural gas customer, it would be about $1.18 a month. An electricity customer would be 67 cents per month,” said Butch Larcombe, NorthWestern spokesman.
Conversely, if Biden and Democrats raise the corporate tax rate, they will add to the burden faced by working families. And any small businesses operate on tight margins and can't afford higher heating, cooling, gas, and refrigeration costs.
President Biden should withdraw his tax increases.
