Institute on Taxation and Economic Policy
Federal Tax Debate 2025

Federal Tax Debate 2025

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Top 1% to Receive $1 Trillion Tax Cut from Trump Megabill Over the Next Decade

July 3, 2025 • By Carl Davis

The Trump megabill will give the top 1 percent tax cuts totaling $1.02 trillion over the next decade. For comparison, the bill’s cuts to the Medicaid health care program will total $930 billion over the same period.

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The SALT Caucus, Fortunately, Comes Up Short

July 2, 2025 • By Michael Ettlinger

The endlessly debated cap on deductions for state and local taxes (SALT) has emerged in the GOP megabill largely unscathed—despite the efforts of Republican lawmakers from “blue” states. Those lawmakers are correct that the cap reduces the bill’s tax cuts for their wealthy constituents more than for those in other…

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Senate Megabill Takes Cap Off Unprecedented Private School Voucher Tax Credit, Potentially Raising Cost by Tens of Billions Relative to House Version

July 2, 2025 • By Carl Davis

The tax and spending legislation approved by the U.S. Senate would create an unprecedented, dollar-for-dollar federal tax credit designed to support private school vouchers. This tax credit has the potential to come with an enormous cost if private school groups are successful in convincing their supporters to participate.

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Local Tax Trends in 2025

July 1, 2025 • By Rita Jefferson

As federal aid ends and economic uncertainty grows, local governments face tough budget choices. Now is the time for localities to protect vulnerable residents and build stronger, more equitable fiscal foundations.

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Trump Megabill Will Give $117 Billion in Tax Cuts to the Top 1% in 2026. How Much In Your State?

June 30, 2025 • By Michael Ettlinger

The predominant feature of the tax and spending bill working its way through Congress is a massive tax cut for the richest 1 percent — a $114 billion benefit to the wealthiest people in the country in 2026 alone.

More Recent Work

Across the States

Tax Watch

State Tax Watch 2025

ITEP tracks tax discussions in legislatures across the country and uses our unique data capacity to analyze the revenue, distributional, and racial and ethnic impacts of many of these proposals. State Tax Watch offers the latest news and movement from each state.

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Learn more about state taxes across the country, read Who Pays?

State Rundown & On the Map

State Rundown 6/25: The Numbers Don't Lie, State Budget Edition

Many states are reaching their end-of-June budget deadlines, and major tax policy changes look to have big implications as states are forced, per federal policy,…

Taxes on Adult-Use Cannabis in Each State

Twenty-three states have legalized the sale of cannabis for general adult use, and sales are already underway in 21 of those states. Every state allowing…

State & Local Tax Policy

Local Tax Trends in 2025

July 1, 2025 • By Rita Jefferson

With Fiscal Uncertainty Looming, Louisiana Senate Did the Right Thing on Tax Bills

June 27, 2025 • By Neva Butkus

Alabama Sunsets its Expensive ‘No Tax on Overtime’ Policy

June 18, 2025 • By Neva Butkus

Expert's View

Carl Davis

Carl Davis
Research Director

The Geographic Distribution of Extreme Wealth in the U.S.

Excessive concentration of wealth runs counter to our national aspiration for genuine equality of opportunity, and it saps the vitality of our democracy through the consolidation of power and influence. Tax policy offers a powerful means of beginning to address our nation’s stark level of inequality, but current law is clearly falling short of its potential.

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