December 16, 2017
The final tax bill that Republicans in Congress are poised to approve would provide most of its benefits to high-income households and foreign investors while raising taxes on many low- and middle-income Americans. The bill would go into effect in 2018 but the provisions directly affecting families and individuals would 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.
January 12, 2018
From the outset, states—particularly wealthier states—objected to the GOP’s proposal to limit SALT deductions in part because it reduces the amount of state and local taxes that the federal government essentially picks up for taxpayers (by allowing a SALT deduction, the federal government is, in effect, paying part of taxpayers’ state and local tax bill), which could hinder states’ ability to raise revenue. Simply focusing on SALT, though, misses the bigger picture. The fact remains that the overall tax bill disproportionately benefits higher-income taxpayers even with the $10,000 SALT cap in place. Responding to federal tax cuts that disproportionately benefit the rich with state proposals that help bestow more tax cuts on upper-income taxpayers is irrational.
January 12, 2018
Last night, Yahoo reported that 81 corporations had announced pay raises and bonuses that they claim result from the Trump-GOP tax law’s reduction in the official corporate tax rate from 35 percent to 21 percent. Of these 81 corporations, 13 were included in ITEP’s most recent corporate tax study, which focuses on the Fortune 500 companies that were profitable every year from 2008 through 2015. These 13 companies had a combined effective tax rate of just 19.1 percent, which undermines the idea that the federal corporate tax rate was holding back their ability to pay workers.
January 12, 2018
As states continue to sift through wreckage of the federal tax cut bill to try to determine how they will be affected, two things should be clear to everyone: the richest people in every state just got a massive federal tax cut, and federal funding for shared priorities like education and health care is certain to continue to decline. State leaders who care about those priorities should consider asking those wealthy beneficiaries of the federal cuts to pay more to the state in order to minimize the damage of the looming federal funding cuts, but so far policymakers in Idaho, Iowa, Michigan, Missouri, Nebraska, South Carolina, and elsewhere are choosing instead to sing their same old tax-cutting tune. As the facts come into better focus, hopefully these leaders will change that tune.
January 12, 2018
The Walmart corporation announced this week that it will increase its minimum wage to $11 an hour, in a move that the company attributed to the major corporate tax cut signed into law by President Trump last month. The $300 million the company will spend on the wage boost is just a fraction of the more than $2 billion a year ITEP estimates Walmart could net from the corporate tax rate cuts that took effect January 1—but even so, the company felt the need to make the wage boost more affordable by simultaneously closing 63 Sam’s Club stores and laying off thousands of employees. For all the press fanfare surrounding the wage announcement, the quiet layoffs are likely a more meaningful indicator of what awaits the American worker in the wake of the Trump tax cuts.
January 11, 2018
If President Trump is indeed a deal maker, then he should dismantle Congress’s decision to rely on private debt collectors as a substitute for the Internal Revenue Service. This decision, championed for years by Sens. Charles Grassley, R-Iowa, and Chuck Schumer, D-New York, is a lousy deal for everyone–American taxpayers, the federal government–except private debt collectors.
ITEP researchers have produced new reports and analyses that look at various pieces of the tax bill, including: the share of tax cuts that will go to foreign investors; how the plans would affect the number of taxpayers that take the mortgage interest deduction or write off charitable contributions, and remaining problems with the bill in spite of proposed compromises on state and local tax deductions.
Profitable corporations are subject to a 35 percent federal income tax rate on their U.S. profits. But many corporations pay far less, or nothing at all, because of the many tax loopholes and special breaks they enjoy.
It is almost always the case that profits reported by American corporations to the IRS as earned in tax havens were actually earned in the United States or another country with a tax system similar to ours.
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 by examining the share of income paid in state and local taxes by people across the economic spectrum.
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.