Bonuses, Pay Raises and Benefits from AZ Business due to Tax Reform Now Exceed $200 Million Dollars!

With another surge of announcements from Arizona companies providing pay raises, bonuses and other benefits, over $200 Million dollars has now been put back into the pockets of Arizona employees and ratepayers as a result of federal tax reform.

As of January 25th, here is a list of Arizona companies that have rewarded employees with additional pay and benefits:

  • American and Southwest Airlines announced $1,000 bonuses for their nearly 15,000 employees in celebration of the GOP tax plan.
  • CEO Bob Parsons handed out $1.3 million in bonuses to his 725 employees at YAM Worlwide.
  • AT&T and Comcast provided $1,000 bonuses to hundreds in their Arizona workforce.
  • Bank of America will be giving $1,000 bonuses to their 10,000 Arizona employees that make up to $150,000 in total compensation.
  • Boeing has committed to $300 million to charitable investments, workforce training and infrastructure improvements benefiting their 3,600 Arizona employees.
  • Nationwide announced $1,000 bonuses and an increase of their 401(k)-matching contribution for their 1,900 Arizona employees.
  • Wells Fargo, with over 15,000 Arizona employees, announced the establishment of a $15 minimum wage, $400 million in charitable donations and $100 million in additional capital investment.
  • Wal-Mart has committed to providing their 35,000 Arizona employees a guaranteed minimum wage of $11/hour and bonuses up to $1,000.
  • APS announced that they intend to slash $119 Million from their utility rates, which would save the average homeowner $56 each year.
  • Verizon will provide 50 shares of restricted stock (valued at $53/share) to their 2,800 Arizona employees, a total value exceeding $7 Million dollars.
  • JP Morgan Chase will be giving a $750 bonus to their 10,000 Arizona employees and raise starting wages from $15 to $18 an hour.
  • Waste Management, Inc. is providing $2,000 bonuses to nearly 2,000 Arizona Employees that do not participate in a sales incentive or bonus plan.
  • Meridian Bank increased their base wage to $15/hour, increased charitable contributions and capital spending and added 20% to existing bonuses.
  • Comerica Bank will provide $1,000 bonuses to their 100+ Arizona non-officer employees and raised their base wage to $15/hour.
  • Home Depot announced bonuses up to $1,000 for its 10,000 Arizona employees
  • Western Alliance provided bonuses, pay raises and an increase in their 401(k)-matching contribution for their 700 Arizona employees.
  • Washington Federal, which has nearly 200 Arizona employees, has committed to 5% merit increases for employees making less than $100k and an substantial increase of training programs for their workers.
  • Starbucks announced pay raises, expanded benefits and company stock (valued at $500 for shop workers, $2,000 for managers) to their 4,000 Arizona employees.
  • FedEx, with 3,700 Arizona employees, will be giving bonuses, pay raises and a voluntary $1.5 Billion contribution to their company pension plan.

In total, over 100,000 Arizona workers are on the receiving end of bonuses, pay raises and other benefits thanks to the business tax cuts. Combined with the individual income tax reductions that will show up on paychecks next month, the direct financial benefit for Arizona taxpayers as a result of tax reform will be over $1 Billion dollars in 2018.

The Club will continue to expand the list of AZ companies rewarding their employees with bonuses, pay raises and benefits. If you know of a company not on the list, please email info@azfree.org so that the Club can include the good news on our tax cut victory tally.

ASU Law School Makes In-Kind Contribution to Goddard Initiative

It appears that Arizona State University may be providing taxpayer funded support to a ballot measure in violation of state law. In conjunction with the far-left National Lawyers Guild, the Sandra Day O’Conner School of Law is hosting a forum on the legal issues of “Dark Money” in Arizona politics.

Normally, giving a platform at ASU for liberal advocates to attack donor privacy wouldn’t be an issue, except that this event is much more than that.  The main speaker at the forum is Terry Goddard, the campaign chair for a statewide ballot initiative to require charities and non-profits that engage in electioneering to report their supporters to the government. If that weren’t enough, the event also invites students to “become involved in the petitioning and subsequent legal issues that may arise.”

All of this activity is direct electioneering occurring on a taxpayer funded University campus, being promoted on ASU’s taxpayer funded website.

Defenders of this forum will contend that this is a student event organized by the Lawyers Guild and that ASU is not formally backing the initiative. The problem with this defense is that a direct endorsement is irrelevant, what matters is if taxpayer resources are being illegally used to support or oppose a candidate or ballot measure.

The good news is that the Attorney General’s office has decided to intervene. In a letter sent today to the ASU Law School, the AG has informed the Dean that Arizona law prohibits the use of any “university resources, including the use or expenditure of monies, accounts, credits, facilities, computer hardware or software, webpages, personnel, buildings or any of thing of value for the purpose of influencing the outcome of an election.” (emphasis added). It is unclear if ASU responded to the letter or decided to let the event proceed as planned.

Granting space at a University facility and promoting the ballot measure on ASU’s website should not occur. If Mr. Goddard or other supporters of the ballot initiative want to hold a campaign event on campus, they should promote it on their own website and pay out of their own pocket to host the event.

Hopefully Attorney General Brnovich will keep the pressure on ASU and make sure that taxpayers were not forced to illegally support Goddard’s electioneering activities.

Club Urges Legislature to Return Money to Taxpayers

Today the Arizona Free Enterprise Club in partnership with several other organizations sent a letter to the Governor and members of the Legislature urging them to return any additional revenue generated from the Tax Cuts and Jobs Act passed in Washington D.C.  The letter was as follows:

On behalf of the undersigned organizations, we write to urge Governor Ducey and the legislature to return to the taxpayers any additional revenue being collected by the state as a result of federal tax reform.

There is little doubt that the Tax Cuts and Jobs Act passed in Washington DC represents a big win for Arizona workers and job creators. The TCJA provided long overdue tax relief, cutting both individual and corporate rates while simplifying the tax code.

Already the benefits of tax reform have born fruit, with over $175 million put back into the pockets of Arizona families through bonuses, wage increases, expanded benefits and utility rate cuts. This number will only grow larger as the individual tax rate reductions kick in next month. Coupled with increased business investment from the corporate rate cuts and full expensing, the prospects for a booming Arizona economy have never been higher.

While this is all good news, last week the Department of Revenue released their conformity report showing that Arizona taxpayers will end up paying as much as $250 Million more in state income taxes in FY 2019 as a result of the federal changes. The number could climb to over $300 million in FY 2020.

We understand that this tax increase was a result of historical conformity practices and was not caused by any direct action taken by Arizona policy makers. Nevertheless, conforming our tax code in a way that does not return this money back to hardworking taxpayers would be a disastrous income tax increase that would undo many of the benefits of tax reform.

That is why we urge state policy makers to return this money back to hardworking taxpayers and head off an unnecessary and economically destructive state income tax increase.  It is the right action to take to ensure that the recently enacted federal reforms deliver on their anticipated benefits.

Sincerely,

Scot Mussi                                                 Victor Riches
President                                                   President & CEO
Arizona Free Enterprise Club               Goldwater Institute

Tom Jenney                                               Farrell Quinlan
Senior Legislative Advisor                     Arizona State Director
Americans for Prosperity AZ                 NFIB

Grover Norquist
President
Americans for Tax Reform

 

 

Is the City of Tucson in the Business of Selling Insurance?

Is the City of Tucson in the Business of Selling Insurance?

Every household receives a lot of mail.  We rifle through this stack separating it into two piles: the mail we want or must deal with – bills and official notices – and ‘junk mail,’ usually made up of advertisements and promotions from businesses in which we are disinterested.

But what if you receive mail that looks like this:

It is a letter in an envelope with the City of Tucson’s logo.  It is typed on City of Tucson letterhead.  And it is signed, “Sincerely, City of Tucson.”

But it is in fact a letter from a private company selling a warranty product of your home’s water and/or sewer line that runs from the public utility connection to the home.

After weeding through the series of statements such as, “The City of Tucson has authorized [Service Line Warranties of America] to be made available to homeowners,” and “endorsed by the Tucson Mayor and Council” as well as the official City seals; no one could blame a homeowner for being confused.

Or irate.

Surely this is a scam. After all, how could the City of Tucson approve such a advertisement or be allowed to endorse a product and use the City’s logo like they are a professional athlete hawking sneakers?  Are they in the insurance business now?

It turns out this is completely legal, and Tucson isn’t the only municipality that has entered the endorsement business. In the last six years over 400 cities across the country have begun renting their logo out to private companies and endorsing products.

The city of Tucson has collected approximately $500,000 from their own agreement with the insurance provider.  The majority comes from the leasing of the logo, but the city also receives a kickback of 50 cents on every enrollee with 13,000-15,000 citizens enrolled in the program each year.

The idea for local governments to enter the endorsement business came from the National League of Cities and Towns, where a nationwide agreement exists between Service Line Warranties of America and the League to peddle this idea to all their member cities. Lest anyone thinks this is an altruistic endeavor on their part, the National League receives their own kickback for every policy sold.

Suffice to say, there are several reasons this practice should be outlawed immediately by the state legislature.

Government should NEVER endorse any product or service.

The substantive problem with this endorsement is not the product or service being sold, it is the government’s role in endorsing any product, service, or company to its constituents.

Our interactions with government usually include a coercive element.  The choice to pay our taxes or follow the law is not voluntary. That’s why whenever we get a letter in the mail from a government entity – we open it.

Contrast this with our relationship to entities in the free market.  They are completely voluntary.  Private companies are free to advertise, convince, and negotiate with us all they want.  And we are completely at will to ignore, engage, purchase, or renegotiate with them.  We throw away letters in the mail from businesses without even a second thought.

Governments mandate and private companies market.  For one to do the other is a fundamental erosion of our system and leads to corruption.

Just imagine if you received a letter with the seal of the Internal Revenue Service emblazoned on the front promoting a tax preparation program from H&R Block that has been endorsed by the IRS.  Even if the IRS didn’t send the letter itself, does anyone think this is a good idea?  Audit fearing taxpayers would be forced to wonder if they should continue to use Bob the accountant or switch over to the IRS’s preferred vendor.

Federal government has laws and codes strictly prohibiting their agencies and public officials from “endorsing,” giving “preferential treatment,” or giving “governmental sanction” to non-federal entities.  The fact that the State doesn’t have similar restrictions is baffling.

Picking winners and losers.

This policy also puts the government in the position to pick winners and losers.  They decide which businesses and which services will be allowed to use their logo for profiteering.  This is a very slippery slope.  Not only are they giving some businesses an “edge” in the marketplace, but they are using their authority, credibility, and public trust to “persuade” their citizens about what services or goods they should buy.

Hopefully this practice will end soon.  Representative Todd Clodfelter (LD 10) has drafted legislation this year to prohibit the State and all political subdivisions from promoting or making endorsements of non-public entities.

After all, government logos don’t belong to the government, but to taxpayers.  Seals are public property meant to convey only official government business.   It undermines and diminishes the very integrity of a government seal when we allow it to be sold to the highest bidder.

Federal Tax Reform Represents a Big Win for Arizona Taxpayers

Over $175 Million has already been put back into the pockets of AZ taxpayers, with more to come…

Now that the dust has settled and Congress has completed the most comprehensive overhaul of the US tax code since 1986, many Arizona taxpayers and business owners are nervously awaiting to see how the Tax Cuts and Jobs Act (TCJA) will affect them.

This is understandable—the tax code is extremely complicated and fraught with uncertainty, making it easy to believe even the most provable lies about the tax plan. The media could have done a better job separating fact from fiction, but they seemed more interested in being cheerleaders for the opposition than challenging the absurd claims being made from the likes of Nancy Pelosi and Chuck Schumer.

The good news is that benefits of the TCJA will be determined not by hyperbole but by results, and Arizona taxpayers are already winning big.

Tax Cuts for Hardworking Families

One of the biggest lies told about the GOP tax reform package was that it would result in tax increases for middle income families. This fable was repeated endlessly, despite the fact that even left leaning think tanks acknowledged that over 80 percent of US taxpayers would receive a tax cut.

In Arizona, the number will be even higher. With a combination of rate cuts, an increase in the standard deduction, the rollback of the State and Local Deduction (that primarily benefited wealthy individuals in high tax states) and the expansion of the child tax credit, the number of people receiving a cut will likely exceed 90 percent.

And the reductions will be substantial. According to the Tax Foundation, the average tax cut for a middle-income family in Arizona will be $2,500. In fact, when calculating different scenarios under TCJA it is difficult to find examples of households making less than $100,000 paying more. A family of 4 with a household income of $70,000 will see their tax bill slashed by approximately $1,900. A single person with one child making $50,000 will see a reduction of $500. A married couple with no kids making $90,000 would get a cut around $1,000.

Bonuses, Pay Raises, Additional Benefits and Utility Rate Cuts

One of the most pleasant surprises following the passage of TCJA has been the flood of announcements by Arizona employers providing bonuses, pay raises and other benefits as a result of tax reform. As of January 11th, an estimated 80,000 Arizona employees have received bonuses, new benefits and utility rate reductions as a result of the GOP tax cuts, totaling $175 Million Dollars. Here are some of the companies that have rewarded their Arizona employees and customers due to the GOP tax plan:

  • American and Southwest Airlines announced $1,000 bonuses for their nearly 15,000 employees in celebration of the GOP tax plan.
  • CEO Bob Parsons handed out $1.3 million in bonuses to his 725 employees at YAM Worldwide.
  • AT&T and Comcast provided $1,000 bonuses to hundreds of Arizonans in their workforce.
  • Bank of America will be giving $1,000 bonuses to their 10,000 Arizona employees that earn up to $150,000 in total compensation.
  • Boeing has committed to $300 million to charitable investments, workforce training and infrastructure improvements.
  • Nationwide announced $1,000 bonuses and an increase of their 401(k)-matching contribution for their 1,800 Arizona employees.
  • Wells Fargo, with over 15,000 Arizona employees, announced the establishment of a $15 minimum wage, $400 million in charitable donations and $100 million in additional capital investment.
  • Wal-Mart has committed to providing their 35,000 Arizona employees a guaranteed minimum wage of $11/hour and bonuses up to $1,000.
  • APS announced that they intend to slash $119 Million from their utility rates, which would save the average homeowner $56 each year.

These are not indirect benefits, this is cash going directly into the pockets of hardworking taxpayers and workers who need it most. Combined with the anticipated individual income tax rate reductions being calculated into paychecks beginning next month, the direct financial benefit for Arizona workers due to tax reform will be close to a billion dollars in 2018.

Expect the winning from tax reform to continue. Thanks to the corporate rate cuts, full expensing and repatriation, Arizona will experience billions more in new investment and job creation in the coming years.

So as the good news from TCJA continues to roll in, it will be interesting to watch opponents to tax  reform try to explain to business owners and hardworking taxpayers why more jobs and money in their wallet is bad for them. Their efforts up to this point haven’t been too convincing.