ITEP's Research Priorities
Bloomberg BNA: Tax Breaks Plentiful for Second Amazon HQ Even Without Bids
March 27, 2018
Amazon also benefits at the state and local level when it comes to sales tax, according to a report released March 26 by the Institute on Taxation and Economic Policy based in Washington, D.C. In seven states—Alabama, Alaska, Idaho, Iowa, Mississippi, New Mexico, and Pennsylvania—Amazon is either not collecting local taxes or charging a lower […]
Trends We’re Watching in 2018, Part 3: Improvements to Tax Credits for Workers and Families
March 26, 2018 • By Aidan Davis
This has been a big year for state action on tax credits that support low-and moderate-income workers and families. And this makes sense given the bad hand low- and middle-income families were dealt under the recent Trump-GOP tax law, which provides most of its benefits to high-income households and wealthy investors. Many proposed changes are part of states’ broader reaction to the impact of the new federal law on state tax systems. Unfortunately, some of those proposals left much to be desired.
Amazon Maintains Sales Tax Advantage over Local Businesses
March 26, 2018 • By ITEP Staff
This report concludes that lack of consistent sales tax collection is contributing to an unlevel playing field for local businesses “because millions of shoppers are able to pay less tax if they choose to buy from out-of-state companies over the Internet rather than at local stores.” It recommends that states explore reforms to bring their sales tax policies into the digital age.
Amazon and Other E-Retailers Get a Free Pass from Some Local-Level Sales Taxes
March 26, 2018 • By Carl Davis
A new ITEP analysis reveals that in seven states (Alabama, Alaska, Idaho, Iowa, Mississippi, New Mexico, and Pennsylvania), the nation’s largest e-retailer, Amazon.com, is either not collecting local-level sales taxes or is charging a lower tax rate than local retailers. In other states, such as Colorado and Illinois, Amazon is collecting local tax because it has an in-state presence, but localities cannot collect taxes from other e-retailers based outside the state.
Many Localities Are Unprepared to Collect Taxes on Online Purchases: Amazon.com and other E-Retailers Receive Tax Advantage Over Local Businesses
March 26, 2018 • By Carl Davis
Online retailer Amazon.com made headlines last year when it began collecting every state-level sales tax on its direct sales. Savvy observers quickly noted that this change did not affect the company’s large and growing “marketplace” business, where it conducts sales in partnership with third-parties and rarely collects tax. But far fewer have noticed that even on its direct sales, Amazon is still not collecting some local-level taxes.
Unintended Consequences of the New Tax Bill Keep Cropping Up
March 23, 2018 • By Dacey Anechiarico
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.
State Rundown 3/22: Some Spring State Tax Debates in Full Bloom, Others Just Now Surfacing
March 22, 2018 • By ITEP Staff
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,…
Philadelphia Inquirer: Philly’s proposed property-tax increase to fund schools is actually bad for city kids
March 22, 2018
Already throughout Pennsylvania, those making less than $20,000 are paying a much greater share in taxes (at 12 percent) than those making more than $426,000 (at just 4.2 percent), according to the Institute on Taxation and Economic Policy. City officials’ proposing to drive up property taxes as a way to finance new city largesse — […]
Bloomberg Law: Arkansas Tax Reform Body Unveils List of Sales Taxes for Scrutiny
March 22, 2018
Arkansas Gov. Asa Hutchinson (R) Feb. 12 told lawmakers that he would seek a cut to the state’s top marginal tax rate, which effectively jump started the task force’s search for revenue to pay for the cuts, estimated to cost $180 million in annual revenue, Boch said. Outside groups, including the Heritage Foundation’s Institute on […]
Idaho Center for Fiscal Policy: Considerations on House Bill 675
March 21, 2018
A proposal before the Legislature seeks to amend the child tax credit that was created through recent legislation passed by both chambers and signed by the Governor. This analysis presents the effect of the revised credit amount proposed in House Bill 675 together with the provisions of House Bill 463 on Idaho families, as enacted. […]
Colorado Fiscal Institute: Forecast Five: March 2018 Revenue Estimates
March 20, 2018
As a result of TCJA, Legislative Council estimates the state will see increased revenue of $196.5 million in FY 2018-2019, and $329.8 million in increases in FY 2019-2020. However, new analysis from the Institute on Taxation and Economic Policy suggests the revenue increase next year could be closer to $28 million.
Iowa Fiscal Partnership: Passing Through a Special Break for Wealthiest Filers
March 19, 2018
The tax bill that recently passed the Iowa Senate included a provision from the recent federal tax cut bill that provides preferential tax treatment for certain kinds of business income earned mostly by the highest income taxpayers. The “Qualified Business Income Deduction” (QBID) provides a 20 percent exemption of that income from the personal income tax.
Iowa Fiscal Partnership: Passing through a special break
March 19, 2018
The tax bill that recently passed the Iowa Senate included a provision from the recent federal tax cut bill that provides preferential tax treatment for certain kinds of business income earned mostly by the highest income taxpayers. The “Qualified Business Income Deduction” (QBID) provides a 20 percent exemption of that income from the personal income […]
Bangor Daily News: Wealth Hasn’t Trickled Down, It’s Surged Upward
March 17, 2018
Along the same lines, Republicans claim that reductions in the corporate tax rate will lead to higher wages for workers. Evidence suggests this isn’t true, either. After Reagan signed a tax overhaul in 1986 that reduced the country’s corporate tax rate from 46 percent to 34 percent, wages fell for four years. Despite this data, […]
Christian Science Monitor: In Blue States, ‘Tax the Rich’ Isn’t So Simple Anymore
March 16, 2018
The upset that governors like Cuomo and others are voicing is understandable, says Meg Wiehe, deputy director of the Institute on Taxation and Economic Policy, a left-leaning research group. These states see they’re getting the short end of the stick from the federal law, and they suspect that Republican motives were at least partly political. […]
Iowa Fiscal Partnership: Governor’s Plan Sets Stage For Service Cuts
March 16, 2018
Iowa’s General Assembly opened with promises from legislative leadership and the Governor for tax reform. We noted key opportunities to assure a fairer and sustainable system in a brief report last fall, “Introduction to 2018: What should be part of tax reform? And what should not?”[i] These options remain; some are gaining attention — such as the elimination of federal deductibility and the closing of sales tax loopholes — and some are not.
Fiscal Times: Liberals and Conservative Agree Sneaky Tax Breaks Have to Go
March 16, 2018
There was rare agreement across the political spectrum at the House Ways and Means Tax Policy subcommittee hearing this week, with policy experts from Heritage Foundation, the Institute on Taxation and Economic Policy, the Center for American Progress, Taxpayers for Common Sense and the Committee for a Responsible Federal Budget supporting the elimination of “tax […]
E.I.T.C. Spells LOVE for Kids and Families in Arkansas
March 16, 2018
Many people in our state work at low-paying jobs. Arkansans who work hard for little money pay a much higher share of their income to state and local taxes compared to the wealthiest. That’s not the way it should be. Fortunately, there is a great option for Arkansas (just ask the 29 other states that are already using it!) that can help turn things around for working families. That option is a state-level Earned Income Tax Credit (or EITC). At Arkansas Advocates for Children and families, we are so in love with the Earned Income Tax Credit that we decided to sing about it.
The Public Interest Consensus Against the Tax Extenders
March 15, 2018 • By Richard Phillips
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.
Georgia Budget & Policy Institute: Lawmakers Approve Major Tax Plan, Still Reviewing Several Tax Breaks
March 15, 2018
A range of tax bills are still in the pipeline at the General Assembly after lawmakers already approved a sweeping package of income tax cuts. Georgia’s 2018 General Assembly advanced 11 pieces of tax legislation by the Feb. 28 Crossover Day milestone that affect state revenues if approved by the House, Senate and the governor. […]
State Rundown 3/14: States Turn Fiscal Focus Inward
March 14, 2018 • By ITEP Staff
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…
ITEP Testimony on “Post Tax Reform Evaluation of Recently Expired Tax Provisions”
March 14, 2018 • By Richard Phillips
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”
Boeing Paid Tax Rate of 8.4% in Previous Decade, But Trump to Speak About Why It Needed His Corporate Tax Cut
March 14, 2018 • By Matthew Gardner
For the second time in seven months, President Trump will visit a Boeing factory to hype corporate tax cuts. He’s chosen the wrong poster child. If there was something preventing the aerospace giant from expanding its business before the Trump-GOP tax law, it certainly wasn’t taxes. Boeing made headlines in 2016 only because after years of paying zero in federal taxes, it finally paid something. Over 10 years (2008 to 2017), the company paid an effective federal tax rate of 8.4 percent on $54.7 billion of U.S. profits.
New Jersey Policy Perspective: Op-Ed: Tax Law Requires More Than ‘SALT Cap’ Workarounds
March 14, 2018
If you live in a high-wealth and high-tax state like New Jersey, the news gets worse. For the first time in 100 years, taxpayers may no longer deduct their full state and local taxes (“SALT” for short) from the income on which federal taxes are owed. The deductible ceiling is set at $10,000, so if you pay more than that with property and income taxes combined, your taxable income will increase by a bit.
Trends We’re Watching in 2018, Part 2: State Revenue Shortfalls and the Impact on Education and Other Services
March 12, 2018 • By Aidan Davis
Many states struggle with a need for revenue, yet their lawmakers show little will to raise taxes to fund public services. Revenue shortfalls can prove to be a moving target. Some states with expected shortfalls are now seeing rosier forecasts. But as estimates come in above or below projections, states continue to grapple with how and whether to raise the revenue necessary to adequately fund key programs. Here are a few trends that are leading to less than cushy state coffers this year.
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