1,134 posts
State Tax Subsidies for Private K-12 Education
• By Carl Davis
This report explains the workings, and problems, with state-level tax subsidies for private K-12 education. It also discusses how the Internal Revenue Service (IRS) has exacerbated some of these problems by allowing taxpayers to claim federal charitable deductions even on private school contributions that were not truly charitable in nature. Finally, an appendix to this report provides additional detail on the specific K-12 private school tax subsidies made available by each state.
Offshore Shell Games 2016
• By Matthew Gardner, Richard Phillips
This study explores how in 2015 Fortune 500 companies used tax haven subsidiaries to avoid paying taxes on much of their income. It reveals that tax haven use is now standard practice among the Fortune 500 and that a handful of the country's wealthiest corporations benefit the most from this tax avoidance scheme.
New Jersey Policy Perspectives: Transportation-Funding Deal Endangers New Jersey’s Future & Fails the ‘Tax Fairness’ Test
• By ITEP Staff
After a months-long stalemate, New Jersey’s three most powerful policymakers announced late last Friday that they’d come to an agreement on investing in the state’s transportation networks. As part of the deal, the leaders have agreed to a large-scale package of tax cuts that would disproportionately benefit well-off New Jerseyans while further decimating the state’s […]
Comment Letter to FASB on Income Tax Disclosure
• By Richard Phillips
We appreciate the Financial Accounting Standards Board's (FASB) ongoing review of its accounting standards to ensure that financial statements are "facilitating clear communication of information that is important to financial statement users." Overall, the changes to disclosure requirements proposed by FASB in the exposure draft would represent a significant step forward toward providing users of financial statements the clarity that they need. We believe, however, that the exposure draft does not go far enough in…
State Tax Codes as Poverty Fighting Tools
• By Aidan Davis, Meg Wiehe
Despite this unlevel playing field states create for their poorest residents through existing policies, many state policymakers have proposed (and in some cases enacted) tax increases on the poor under the guise of "tax reform," often to finance tax cuts for their wealthiest residents and profitable corporations.
Property Tax Circuit Breakers
• By Aidan Davis, Meg Wiehe
State lawmakers seeking to make residential property taxes more affordable have two broad options: across-the-board tax cuts for taxpayers at all income levels, such as a homestead exemption or a tax cap, and targeted tax breaks that are given only to particular groups of low- and middle-income taxpayers. One such targeted program to reduce property taxes is called a "circuit breaker" because it protects taxpayers from a property tax "overload" just like an electric circuit…
Reducing the Cost of Child Care Through State Tax Codes
• By Aidan Davis, Meg Wiehe
Low- and middle-income working parents spend a significant portion of their income on child care. As the number of parents working outside of the home continues to rise, child care expenses have become an unavoidable and increasingly unaffordable expense. This policy brief examines state tax policy tools that can be used to make child care more affordable: a dependent care tax credit modeled after the federal program and a deduction for child care expenses.
Rewarding Work Through State Earned Income Tax Credits
• By Aidan Davis, Lisa Christensen Gee, Meg Wiehe
The Earned Income Tax Credit (EITC) is a policy designed to bolster the earnings of low-wage workers and offset some of the taxes they pay, providing the opportunity for struggling families to step up and out of poverty toward meaningful economic security. The federal EITC has kept millions of Americans out of poverty since its enactment in the mid-1970s. Over the past several decades, the effectiveness of the EITC has been magnified as many states…
Options for a Less Regressive Sales Tax
• By Carl Davis
Sales taxes are one of the most important revenue sources for state and local governments; however, they are also among the most unfair taxes, falling more heavily on low- and middle-income households. Therefore, it is important that policymakers nationwide find ways to make sales taxes more equitable while preserving this important source of funding for public services. This policy brief discusses two approaches to a less regressive sales tax: broad-based exemptions and targeted sales tax…
News Release: U.S. Should Take a Page from European Commission’s Book And Crack Down on Corporate Tax Avoidance
• By ITEP Staff
Following is a statement by Matt Gardner of the Institute on Taxation and Economic Policy regarding the European Commission’s ruling today that the Apple Corporation must pay as much as €13 billion ($14.5 billion) in back taxes due to an illegal tax break granted by the Irish government. “The European Commission action is a chastening […]
How State Tax Changes Affect Your Federal Taxes: A Primer on the “Federal Offset”
• By Dylan Grundman O'Neill
Read this brief in PDF here. State lawmakers frequently make claims about how proposed tax changes would affect taxpayers at different income levels. Yet too many lawmakers routinely ignore one important consequence of their tax reform proposals: the effect of state tax changes on their constituents’ federal income tax bills. Wealthier taxpayers in particular can […]
Indexing Income Taxes for Inflation: Why It Matters
• By Dylan Grundman O'Neill
Read brief in PDF here. All of us experience the effects of inflation as the price of the goods and services we buy gradually goes up over time. Fortunately, as the cost of living goes up, our incomes often tend to rise as well in order to keep pace. But many state tax systems are […]
West Virginia Center on Budget and Policy: Modernizing West Virginia’s Marijuana Laws
• By ITEP Staff
“Over the last two decades, states across the country have modernized their marijuana laws to reflect the growing evidence that doing so will help reduce criminal justice costs, help treat some medical conditions, and boost tax revenues and their state’s economy. As of 2016, four states and the District of Columbia have legalized the recreational […]
The Folly of State Capital Gains Tax Cuts
• By Dylan Grundman O'Neill, Meg Wiehe
Read the brief in a PDF here. The federal tax system treats income from capital gains more favorably than income from work. A number of state tax systems do as well, offering tax breaks for profits realized from local investments and, in some instances, from investments around the world. As states struggle to cope with […]
Achieving Sustainable Infrastructure Revenue with Gas Tax Reform
• By Carl Davis
This brief outlines the causes of Louisiana's infrastructure revenue shortfall and offers recommendations for how the state can achieve "sufficient increased levels of recurring funding to address the transportation backlog in highway and bridge maintenance needs in Louisiana," as per the Task Force's mandate.
Why Sales Taxes Should Apply to Services
• By Carl Davis
Read this Policy Brief in PDF here. General sales taxes are an important revenue source for state governments, accounting for close to one-third of state tax collections nationwide. But most state sales taxes have a damaging structural flaw: they typically apply to most sales of goods, such as books and computers, but exempt most services […]
Income Tax Offers Alaska a Brighter Fiscal Future
• By Aidan Davis, Carl Davis
Read this report in PDF. This month, Alaska legislators regroup in yet another special session where they will consider legislation to address a yawning budget gap created by declining oil tax and royalty revenues. Through the use of his veto pen, Gov. Bill Walker has partially addressed the gap with cuts to state spending and […]
Sales Tax Holidays: An Ineffective Alternative to Real Sales Tax Reform
• By Meg Wiehe
This brief was updated July 2018 Read this Policy Brief in PDF here. Sales taxes are an important revenue source, composing close to half of all state tax revenues.[1] But sales taxes are also inherently regressive because the lower a family’s income, the more the family must spend on goods and services subject to the […]
Ryan Tax Plan Reserves Most Tax Cuts for Top 1 percent, Costs $4 Trillion Over 10 Years
• By ITEP Staff
A new distributional analysis of Republican Speaker of the House Paul Ryan’s “A Better Way” policies finds that the plan would: • Add $4 trillion to the national debt over a decade. • Overwhelmingly benefit the top 1 percent of tax payers while resulting in a net loss for the bottom 95 percent of taxpayers. • Slash corporate […]
State Corporate Tax Disclosure: Why It’s Needed
• By Lisa Christensen Gee
Few state tax trends are as striking as the rapid decline of state corporate income tax revenues. As recently as 1986, state corporate income taxes equaled 0.5 percent of nationwide Gross State Product (GSP) (a measure of statewide economic activity). But in fiscal year 2013 (the last year for which data are available), state and local corporate income taxes were just 0.33 percent of nationwide GSP--representing a decline of over 30 percent.
How Long Has it Been Since Your State Raised Its Gas Tax?
• By Carl Davis
An updated version of this report has been published with data through July 1, 2017. Read this Policy Brief in PDF form Many states’ transportation budgets are in disarray, in part because they are trying to cover the rising cost of asphalt, machinery, and other construction materials with a gasoline tax rate that is rarely […]
State Treatment of Itemized Deductions
• By Dylan Grundman O'Neill, Meg Wiehe
Read this Policy Brief in PDF Form Map of State Treatment of Itemized Deductions Thirty-one states and the District of Columbia allow a group of income tax breaks known as “itemized deductions.” [1] Itemized deductions are designed to help defray a wide variety of personal expenditures that affect a taxpayer’s ability to pay taxes, including charitable […]
Michigan League for Public Policy: Review tax expenditures to help fix Michigan’s broken revenue stream
• By ITEP Staff
“Michigan has a budget problem, and simply put, there just isn’t enough money to go around. Michigan has experienced crisis after crisis—the Great Recession, nearly record-high unemployment, municipal financial emergencies, the city of Detroit’s bankruptcy, the Flint water crisis and the financial struggles of Detroit Public Schools to name a few. In attempting to fix […]
West Virginia Center on Budget and Policy: New Revenues to Balance the Budget Don’t Have to be Regressive
• By ITEP Staff
“Last week, Governor Tomblin finally issued the call for the legislature to come back into a special session to balance the FY 2017 budget. The special session will begin today, May 16th, and the governor will once again submit a budget proposal for the legislature to consider. During the regular session, Governor Tomblin proposed $130 […]
Oklahoma Policy Institute: New bill would devastate a key tax credit for Oklahoma working families
• By ITEP Staff
“Yesterday, a letter signed by more than 150 Oklahoma clergy was delivered to lawmakers and Governor Fallin, urging them not to slash key tax credits for working families to fix the state’s revenue problems. They were joined by numerous non-profit and foundation leaders who spoke out against cuts to the Earned Income Tax Credit, Child/Child […]
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