Protecting Trump corporate tax rate top priority for taxpayers
President Biden and congressional Democrats want to raise the federal corporate income tax rate to 28% from the current Trump rate of 21%.
Any increase in the corporate income tax rate will directly raise the cost of utility bills.
Customers directly bear the cost of corporate income taxes imposed on utility companies.
Investor-owned electric, gas, and water companies must get their billing rates approved by the 50 respective state utility commissions. The commissions are required by law to build the cost of taxes into the utility rates and publish details of their utility rate decisions.
“Households are getting pummeled with high inflation and now Biden’s threatened corporate income tax rate hike would drive their costs even higher,” said Grover Norquist, president of Americans for Tax Reform. “Any lawmaker flirting with Biden’s corporate tax rate increase needs to explain to their constituents why they wish to impose even higher utility bills.”
When the 2017 Tax Cuts and Jobs Act cut the corporate income tax rate from 35% to 21%, utilities worked with state utility officials to pass along the tax savings to customers.
To document the relationship between the corporate tax rate and utility rates, Americans for Tax Reform undertook a 50-state review of utility commission documents and local news sources. ATR found at least 300 publicly documented examples of utilities passing tax savings along to customers.
With the Biden tax increase, you can expect a movement in the opposite direction.
The TCJA utility savings came in the form of a rate reduction, a bill credit, or a reduction to an existing or planned rate increase.
ATR also compiled a 90-second nationwide utility savings video from local news reports which may be viewed here.
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.
If Democrats now impose a corporate income tax rate increase, they will have to reckon with constituents and local news coverage noting utility bills are going up.