October 17, 2018
A new ITEP analysis reveals that many states traditionally considered to be “low-tax states” are actually high-tax for their poorest residents. The “low tax” label is typically assigned to states that either lack a personal income tax or that collect a comparatively low amount of tax revenue overall. But a focus on these measures can cause lawmakers to overlook the fact that state tax systems impact different taxpayers in very different ways, and that low-income taxpayers often do not experience these states as being even remotely “low tax.”
October 11, 2018
A newly released report by Prosperity Now and the Institution on Taxation and Economic Policy, Race, Wealth and Taxes: How the Tax Cuts and Jobs Act Supercharges the Racial Wealth Divide, finds that the TCJA not only adds unnecessary fuel to the growing problem of overall economic inequality, but also supercharges an already massive racial wealth divide to an alarming extent.
- blog November 16, 2018
November 16, 2018
State policymakers, voters, and observers have been reflecting on this year’s campaigns and looking ahead to how the policy opportunities in their states have shifted as a result. For example, Arkansas’s governor sees a fresh chance to slash income taxes on the state’s wealthiest residents, while the governor-elect of Illinois will be doing just the opposite, launching into a promised effort to shore up the state’s budget by asking the wealthy to pay more. New York and Virginia residents may end up with buyers’ remorse after Amazon accepted their combined $2 billion tax subsidy offers for its HQ2 project. And even more states are considering legalizing medical and recreational cannabis as the early-adopting states continue to see handsome revenue returns.
- ITEP Work in Action November 16, 2018
- press release November 14, 2018
November 14, 2018
The cap on federal tax deductions for state and local taxes (SALT) that is in effect now under the Tax Cuts and Jobs Act (TCJA) is a flawed provision but repealing it outright would be costly and provide a windfall to the rich. Congress should consider replacing the SALT cap with a different type of limit on deductions that would avoid both of these outcomes. Using the ITEP microsimulation tax model, this report provides revenue estimates and distributional estimates for several such options, assuming they would be in effect in 2019.
New 50-State Analysis: Poorest 20 percent pays a 50 percent higher effective state and local tax rate than the top 1 percent
ITEP’s sixth edition of Who Pays? A Distributional Analysis of the Tax System in All 50 States finds that most state and local tax systems continue to tax low- and middle-income households at higher rates than the wealthy.
Since 2000, tax cuts have reduced federal revenue by trillions of dollars and disproportionately benefited well-off households. From 2001 through 2018, significant federal tax changes have reduced revenue by $5.1 trillion, with nearly two-thirds of that flowing to the richest fifth of Americans.
The $2 trillion 2017 Tax Cuts and Jobs Act (TCJA) includes several provisions set to expire at the end of 2025. GOP leaders have introduced a bill informally called “Tax Cuts 2.0” or “Tax Reform 2.0,” which would make the temporary provisions permanent. The Institute on Taxation and Economic Policy (ITEP) has state-by-state analyses as well as other resources that explain this legislation and its consequences.
This analysis finds that extending the temporary tax provisions in 2026 would not be aimed at helping the middle-class any more than TCJA as enacted helps the middle-class in 2018.
As taxpayers across the country find ways to circumvent the cap on SALT deductions, the IRS has proposed regulations to end "charitable donations" in the name of tax avoidance. ITEP expert Carl Davis shares resources for what you need to know about the SALT cap workarounds.
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.