Tax cuts help the poor and middle class in so many ways.


If you listen to Nancy Pelosi the poor and middle class are worse off because of the new tax bill. Her impression is that the tax bill is a “monumental, brazen theft from the American middle class.” She tells her “puppets,” the GOP tax bill is “Armageddon.”

(Of course, Pelosi is relying on the liberal Tax Policy Center for her tirades. The Tax Policy Center has shown that “on average, in 2027 taxes would change little for lower- and middle-income groups.” Be sure to read that carefully. For the next ten years the middle class will do well, but will lose that improvement in their lives if the DEMOCRATS DO NOT VOTE FOR AN EXTENSION of the Trump tax cuts.)

But how about the poor? They don’t pay income taxes. (They do pay “payroll” taxes, however.) How can a tax cut help them?

[Source: Power Companies Got a Tax Cut. Will Your Bill Reflect It? By Ben Casselman, Jim Tankersley and Brad Plumer – and please note this is from the NEW YORK TIMES (NYT)]

“The newly passed tax law could save Americans billions of dollars on their utility bills.” Which Americans pay the highest percentage of their spendable cash on utility bills? One doesn’t require a PhD in mathematics to realize this helps lowest income Americans the most. But here’s the proof.

Hey, Nancy! I hope that you noted the words “more regressive impact on low-income consumers.” Ergo (and I realize that Nancy’s computational skills are somewhat lacking) a reduction in utility bills is “progressive.”

What else does the NYT article state? In recent days, electric companies in Massachusetts, Illinois, Oregon and other states have announced plans to pass their tax cuts on to customers through lower rates. On Tuesday, Pepco, which provides power to nearly 300,000 customers in Washington, D.C., said it would cut rates beginning in the current quarter.

Other utilities might be forced to follow suit. In much of the country, investor-owned utilities have a monopoly on providing electricity and gas to homes and businesses. State regulators (in the most expensive states those “regulators” are ALL DEMOCRATS, so you judge the probabilities of lower rates – RF) allow them to charge rates high enough to recoup their costs — including the cost of paying taxes… Those regulators periodically scrutinize rates to ensure that they are reasonable. When taxes go down, so should customers’ utility bills. (Footnote)

Well, what do you know about that? Even the NYT has had to admit the benefits of lower taxes on business.

And thanks to HP for sending this to me.

Roy Filly

Footnote:

State regulators across the country have said they will make sure that actually happens. And in a letter to the Federal Energy Regulatory Commission on Tuesday, the attorneys general of several states, including Massachusetts, Texas and New York, asked the agency to act as well.

“This is a significant windfall for these entities,” said Attorney General Maura Healey of Massachusetts, who organized the appeal. “It’s entirely appropriate for that savings to be passed on to ratepayers.”

 

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About Roy Filly

Please read my first blog in which I describe myself and my goals.
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