December 16, 2017
The final Trump-GOP tax law provides most of its benefits to high-income households and foreign investors while raising taxes on many low- and middle-income Americans. The bill goes into effect in 2018 but the provisions directly affecting families and individuals all expire after 2025, with the exception of one provision that would raise their taxes. To get an idea of how the bill will affect Americans at different income levels in different years, this analysis focuses on the bill’s impacts in 2019 and 2027.
March 23, 2018
Due to its rushed passage in a matter of weeks, without public hearings or enough time even for basic proofreading, the Tax Cuts and Jobs Act (TCJA) contains numerous unintended consequences that Congress is now scrambling to fix. The authors of the new law have openly admitted that the law includes major mistakes. One of the most prominent drafting errors is what is now known as the “grain glitch,” which temporarily created a huge incentive for farmers to sell their products to cooperatives over businesses taking other forms.
March 22, 2018
The onset of spring this week proved to be fertile ground for state fiscal policy debates. A teacher strike came to an end in West Virginia as another seems ready to begin in Oklahoma. Budgets were finalized in Florida, West Virginia, and Wyoming, are set to awaken from hibernation in Missouri and Virginia, and are being hotly debated in several other states. Meanwhile Idaho, Iowa, Maryland, and Minnesota continued to grapple with implications of the federal tax-cut bill. And our What We’re Reading section includes coverage of how states are attempting to further public priorities by taxing carbon, online gambling, opioids, and inequality itself.
March 15, 2018
The Heritage Foundation, the Institute on Taxation and Economic Policy (ITEP), and the Committee for a Responsible Federal Budget (CRFB) routinely disagree on a wide range of policy issues, but a recent Ways and Means Tax Policy Subcommittee hearing revealed they all agree that the continual and unpaid-for extension of temporary tax breaks needs to end.
March 14, 2018
With many state legislative sessions about halfway through, the ripple effects of the federal tax-cut bill took a back seat this week as states focused their energies on their own tax and budget issues. Major proposals were released in Nebraska and New Jersey, one advanced in Missouri, and debates wrapped up in Florida, Utah, and Washington. Oklahoma and Vermont are considering ways to improve education funding, while California, New York, and Vermont look to require more of their most fortunate residents. And check in on “what we’re reading” for resources on the online sales tax debate, the role of property taxes in racial inequity, and more.
March 14, 2018
Statement of Richard Phillips, Senior Policy Analyst
Institute on Taxation and Economic Policy
Before the Committee on Ways and Means Subcommittee on Tax Policy
Hearing on “Post Tax Reform Evaluation of Recently Expired Tax Provisions”
As state legislative sessions swing into high gear, the recently enacted Tax Cuts and Jobs Act (TCJA) is figuring prominently in policy discussions, with officials examining how the bill affects their states and weighing the necessary policy responses.
Before the recent tax law passed, profitable corporations were subject to a 35 percent federal income tax rate on their U.S. profits. Although lobbyists complained about this rate for years, this report (which examines eight years of corporate data) reveals many profitable corporations exploited loopholes and paid no where near the official corporate tax rate.
Under the new law, corporations' accumulated offshore earnings will be taxed at a rate of 15.5 percent and all other offshore earnings at a rate of 8 percent. This change gives corporations a more than $413 billion tax break on the trillions they were sheltering offshore.
This report specifically examines the state and local tax contributions of undocumented immigrants who are currently enrolled or immediately eligible for DACA and the fiscal implications of various policy changes.
ITEP's Who Pays? report assesses the fairness of state and local tax systems, examining the share of income paid in state and local taxes by people across the economic spectrum. The new federal tax law is expected to effect changes in many state tax codes this year. ITEP staff continues to monitor and analyze tax policy in all 50 states and plans to update this report in late 2018.
Whether it’s at the state or federal level, ITEP produces careful research and in-depth analyses of tax policies, and provides a voice for working people in tax policy debates. State advocates, policymakers and media often use our work to inform public discourse on current and proposed tax policies.
ITEP’s federal policy resources provide quantitative and qualitative research and analysis on current tax policies, proposals, and reform options. Its distributional analyses highlight how tax proposals will affect low-income, middle-class and wealthy Americans nationally and in all 50 states.
State taxes pay for essential public services, from education to health care. But the ideal design of a tax system is complicated. ITEP’s state policy resources offer insights into central issues, including the impact of state tax systems on individuals, families, and businesses. Its work also analyzes the sustainability of revenue sources over time.
Corporate Tax Research
ITEP’s corporate tax research examines the tax practices of Fortune 500 companies. Besides its corporate study on average effective tax rates paid by the nation’s largest, most profitable corporations, ITEP produces research on subjects such as offshore cash holdings, tax haven abuse, executive stock options and other tax loopholes.
The truth is, if lawmakers truly wanted to craft a tax overhaul that would benefit working people most, they would have started from fundamentally different principles and developed policies that would provide true tax relief for all working families while shutting down favorable tax treatment for rich people.