2014

State Tax Codes As Poverty Fighting Tools

Read the Report in PDF Form The Census Bureau released data in September showing that the share of Americans living in poverty remains high. In 2013, the national poverty rate was 14.5 percent, a slight drop from last years’ rate...

Sales Tax Holidays: An Ineffective Alternative to Real Sales Tax Reform

Sales taxes are an important revenue source, comprising close to half of all state revenues in 2013. But sales taxes are also inherently regressive because the lower a family's income, the more of its income the family must spend on things subject to the tax.

Options for Progressive Sales Tax Relief

See the 2016 Updated Brief Here Read the Policy Brief in PDF Form Sales taxes are one of the most important revenue sources for state and local governments—and are also one of the most unfair taxes. In recent years, policymakers...

State Estate and Inheritance Taxes

For much of the last century, estate and inheritance taxes have played an important role in helping states to adequately fund public services in a way that improves the progressivity of state tax systems. While many of the taxes levied by state and local governments fall most heavily on low-income families, only the very wealthy pay estate and inheritance taxes. Recent changes in the federal estate tax, however, culminating in the "fiscal cliff " deal of early 2013, have forced states to reevaluate the structure of their estate and inheritance taxes. Unfortunately, the trend of late has tended toward weakening or completely eliminating state estate taxes. This policy brief discusses inheritance and estate taxes and how states can adopt these important components of a progressive tax structure.

Pay-Per-Mile Tax is Only a Partial Fix

The gasoline tax is the single largest source of funding for transportation infrastructure in the United States, but the tax is on an unsustainable course. Sluggish gas tax revenue growth has put strain on transportation budgets at the federal and state levels, and has led to countless debates around the country about how best to pay for America's infrastructure.

STAMP is an Unsound Tool for Gauging the Economic Impact of Taxes

The Beacon Hill Institute (BHI), a free-market think tank located at Suffolk University, frequently uses its State Tax Analysis Modeling Program (STAMP) to perform analyses purporting to show that lowering taxes, or not raising them, will benefit state economies. But STAMP suffers from a number of serious methodological problems and should not be relied upon by anybody seeking to underĀ­stand the economic impacts of state tax policies.

State Gasoline Taxes: Built to Fail, But Fixable

An updated version of this brief was published on February 9, 2017.   Read this report in pdf. Every state levies taxes on gasoline and diesel fuel, usually just called “gas taxes.” These taxes are an important source of state...

The Federal Gas Tax: Long Overdue for Reform

The federal gas tax is a critical source of funding for the nation's transportation system, but its design is fundamentally flawed. In recent years, the consequences of those flaws have become increasingly obvious, as the federal government has struggled to fund a 21st century transportation network with a gas tax that has predictably failed to keep pace with the nation's growing infrastructure needs. This ITEP Policy Brief explains how the federal gas tax works, its importance as a transportation revenue source, the problems confronting the gas tax, and the reforms that are needed to overcome these problems.

Improving Tax Fairness with a State Earned Income Tax Credit

The simplest, most effective, and most targeted way to begin to counteract regressive state tax codes is a refundable state Earned Income Tax Credit (EITC). Twenty-five states and the District of Columbia already have some version of a state EITC. Each one is modeled on the federal credit, making it easy for taxpayers to claim and simple for state tax officials to administer. This report explains how all states - even those who already have some form of the credit - can use the state EITC as a tool for improving the fairness of their state tax code.

Gas Tax Hits Rock Bottom in Ten States

In most states, the gasoline tax is set at a fixed number of cents per gallon of gas. South Carolina drivers, for example, have been paying 16 cents per gallon in state tax for more than a quarter century.1 But while this type of fixed-rate gas tax may appear to be flat over time, its lack of change in the face of inflation means that its "real" value, or purchasing power, is steadily declining. In ten states, this decline has brought the state's inflation-adjusted gas tax rate to its lowest level in the state's history.

Most Americans Live in States with Variable-Rate Gas Taxes

The federal government and many states are seeing shortfalls in their transportation budgets in part because the gasoline taxes they use to generate those funds are poorly designed. Thirty-two states and the federal government levy "fixed-rate" gas taxes where the tax rate does not change even as the cost of infrastructure materials inevitably increases over time. The federal government's 18.4 cent gas tax, for example, has not increased in over twenty years. And almost half the states (24) have gone a decade or more without a gas tax increase.

Tennessee Hall Tax Repeal Would Overwhelmingly Benefit the Wealthy, Raise Tennesseans' Federal Tax Bills by $60 Million

A new analysis performed using the ITEP Microsimulation Tax Model shows that the vast majority of Tennesseans would see very little benefit from Hall Tax repeal. Nearly two-thirds (63 percent) of the tax cuts would flow to the wealthiest 5 percent of Tennessee taxpayers, while another quarter (23 percent) would actually end up in the federal government's coffers. Moreover, if localities respond to Hall Tax repeal by raising property taxes, some Tennesseans could actually face higher tax bills under this proposal.

90 Reasons We Need State Corporate Tax Reform

As states struggle with tough budget decisions about funding essential public services, profitable Fortunate 500 companies are paying little or nothing in state income taxes thanks to copious loopholes, lavish giveaways and crafty accounting, a new study by Citizens for Tax Justice and the Institute for Taxation and Economic Policy reveals.

The Sorry State of Corporate Taxes

Many of America's Most Profitable Corporations Pay Little or No Federal Income Taxes; Multinationals Pay Higher Rates Abroad Than in the U.S.