Vice President Kamala Harris wants to raise the U.S. corporate income tax rate to 35%, up from the current Trump rate of 21%.
This will directly raise the cost of utility bills.
Customers bear the cost of corporate income taxes imposed on utility companies.
Electric, gas, and water companies subject to the corporate income tax have their billing rates set by the 50 state utility commissions. The commissions are required to build the cost of taxes into the utility rates.
“The Kamala Harris corporate income tax rate hike will saddle Americans with even higher utility bills,” said Grover Norquist, president of Americans for Tax Reform. “Households are getting pummeled with high inflation and now Kamala’s threatened corporate income tax rate hike would drive their costs even higher.”
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 following passage of TCJA. ATR found at least 300 publicly documented examples of utilities passing tax savings along to customers. Utility bills would be even higher today without TCJA.
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.
Likewise, the Kamala Harris corporate tax rate increase will be paid by utility customers on their monthly bills.
Originally published by Americans for Tax Reform. Republished with permission.
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