Institute on Taxation and Economic Policy

ITEP's Research Priorities

Policy Matters Ohio: Out-of-Step

August 26, 2014

Changes to the Ohio EITC this summer doubled the credit, but poor design choices mean that most low-income working families won’t get the benefit. Read the full report

Policy Matters Ohio: The Great Ohio Tax Shift

August 18, 2014

Tax overhauls in the past nine years have slashed average tax bills for the top 1 percent by more than $20,000, while the bottom three-fifths pay more as a group. Read the full report

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Sales Tax Holidays: An Ineffective Alternative to Real Sales Tax Reform

August 5, 2014 • By Meg Wiehe

Sales taxes are an important revenue source, comprising close to half of all state revenues in 2013. But sales taxes are also inherently regressive because the lower a family's income, the more of its income the family must spend on things subject to the tax.

Fiscal Policy Institute: NYS Can Help Low-income Working Families with Children by Increasing its Earned Income Tax Credit

August 1, 2014

It comes as no surprise to working families that New York State’s tax system is fundamentally unfair. Low- and middle-income workers pay, on average, a much higher share of their income in state and local taxes than the highest income earners. According to analysis by the Washington, D.C.-based Institute on Taxation and Economic Policy, the […]

Missouri Budget Project: Earned Income Tax Credit: A Targeted Tax Change with Significant Impact

July 31, 2014

The federal Earned Income Tax Credit (EITC) is a federal tax credit for low- and moderate-income working people. It encourages and rewards work as well as offsets federal payroll and income taxes. Read the Full Report (PDF)

New Mexico Voices for Children: New Mexico’s Capital Gains Deduction: A Capital Loss for New Mexicans

July 31, 2014

Legislation enacted in 2003 that allows New Mexicans with capital gains income to deduct half of that income from their state taxes has failed as an economic development tool. Further, it makes the state’s overall tax system lean more heavily on low-income families and exemplifies the need for a more robust accounting of tax giveaways. […]

New Mexico Voices for Children: Citizen’s Guide to New Mexico’s Tax System

July 31, 2014

Citizen’s Guide to the New Mexico State BudgetThis guide focuses on the operating budget—the annual spending for ongoing programs and services that affect the lives of every New Mexico resident. Read the Full Report (PDF)

Maryland Center on Economic Policy: Recent EITC Expansion in MD will Make Taxes More Fair, Reduce Inequality

July 31, 2014

Working Marylanders with the lowest earnings will pay slightly less of their income in taxes — 9.9 percent compared to 10.1 percent now – once the expansion of the state’s Earned Income Tax Credit is fully phased in, according to a new study. That’s a small change, and the top 1 percent of income earners […]

Voice for Illinois for Children: Congress Must Act to Stop Corporate Inversions

July 30, 2014

A number of high-profile U.S. corporations have, or are reportedly considering, corporate “inversions,” where they move their “headquarters” overseas to avoid paying U.S. corporate income taxes. Unless Congress acts, federal and state governments are set to lose, at minimum, tens of billions in revenue to support urgent priorities such as schools, roads and bridges, and […]

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Options for Progressive Sales Tax Relief

July 30, 2014 • By Meg Wiehe

See the 2016 Updated Brief Here Read the Policy Brief in PDF Form Sales taxes are one of the most important revenue sources for state and local governments—and are also one of the most unfair taxes. In recent years, policymakers nationwide have struggled to find ways of making sales taxes more equitable while preserving this […]

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State Estate and Inheritance Taxes

July 21, 2014 • By Meg Wiehe

For much of the last century, estate and inheritance taxes have played an important role in helping states to adequately fund public services in a way that improves the progressivity of state tax systems. While many of the taxes levied by state and local governments fall most heavily on low-income families, only the very wealthy pay estate and inheritance taxes. Recent changes in the federal estate tax, however, culminating in the "fiscal cliff " deal of early 2013, have forced states to reevaluate the structure of their estate and inheritance taxes. Unfortunately, the trend of late has tended toward weakening…

Policy Matters Ohio: Cuts and Breaks

July 7, 2014

Most of the $400 million-plus in tax cuts for Fiscal Year 2015 will go the affluent. The Mid-Biennium Review also continues with an unfortunate Ohio tradition of permitting or enlarging tax benefits to special, narrow groups of taxpayers. Read the Full Report

Iowa Policy Project: Immigrants in Iowa

July 7, 2014

Undocumented immigrants pay an estimated $64 million in state and local taxes, according to a new Iowa Policy Project report. The authors suggest immigration reform that expands work authorization or access to citizenship would increase the already significant contribution to Iowa by all immigrants — documented or not. Read the Full Report  

Center on Wage and Employment Dynamics: Ten Dollars or Thirteen Dollars?

July 7, 2014

In this report we compare the effects of $10 (AB10) and $13 (SB935) minimum wage levels in California. We show that AB10 restores some of the ground lost by low-paid workers in recent years, but it maintains the inflation-adjusted minimum wage at about the same level as in 1988. The Leno bill, SB935, goes much […]

Georgia Budget & Policy Institute: Fix Education, Other Vital Services With Viable State Revenue Options

June 27, 2014

Georgia continues to wrestle with the fallout of relying on a revenue system that can’t raise enough money to meet the needs of a modern, growing state. Hospitals are closing, traffic is gridlocked and local school districts are cutting calendar days and increasing class sizes. Public investments in education, transportation and other vital services are […]

New Jersey Policy Perspective: Highest-Income New Jerseyans Would Still Pay Lowest Share of Income to Taxes After Proposed Changes

June 27, 2014

Read the Full Report  

Maine Policy Review: The Distributional Effects of Recent Changes to Maine’s Tax System

June 11, 2014

Both classical economic theory and recent empirical research support the notion that taxes should be progressive: that the wealthiest citizens should pay a larger share of their income in taxes than the middle class, and the middle class should pay a larger share of their income in taxes than the poor. Like every other state […]

Arise Citizens’ Policy Project: Out of Step – Alabama’s Unusual State Tax System

June 11, 2014

Taxes are the tools that Americans use to pay for education, public health, transportation and other elements of the common good. Just as states differ in the scale of services offered, they also differ on the ways to pay for those services. Some states lean on property taxes to fund public services, while others rely […]

Washington Budget & Policy Center: Flawed Economic Model Hurts Washington State

June 11, 2014

An economic model frequently cited by some Washington state lawmakers to justify their opposition to tax increases distorts the impact of tax proposals on state economies, according to a new study from the non-partisan Institute on Taxation and Economic Policy (ITEP). The report makes it clear the Beacon Hill Institute’s State Tax Analysis Modeling Program […]

Michigan League for Public Policy: Road fix must protect low-income families

June 9, 2014

“It’s clear that Michigan must come up with a solution to repair its broken roads. A funding solution that requires a higher sales tax, however, will be especially difficult for lower-income working families who already pay a greater share of their income in state and local taxes. Read the Full Report

Wisconsin Budget Project: Recent Tax Cuts Deliver Little to People Who Earn the Least

June 3, 2014

Three major tax cut packages passed by the Wisconsin legislature in the last year have delivered relatively little benefit to the lowest earners, who are struggling to make ends meet. In dollar amounts, the largest tax cuts went to the Wisconsin taxpayers who earned the most. If state lawmakers want to cut taxes for Wisconsin […]

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Pay-Per-Mile Tax is Only a Partial Fix

May 28, 2014 • By Carl Davis

The gasoline tax is the single largest source of funding for transportation infrastructure in the United States, but the tax is on an unsustainable course. Sluggish gas tax revenue growth has put strain on transportation budgets at the federal and state levels, and has led to countless debates around the country about how best to pay for America's infrastructure.

North Carolina Justice Center: First in Flight from the EITC – Low-Income Working Families Bid Farewell to NC’s Earned Income Tax Credit

May 22, 2014

Unless lawmakers reverse course, close to one million working families in North Carolina will claim the state Earned Income Tax Credit (EITC) for the last time this tax season, bringing pain to individual families and local economies. One year ago, North Carolina lawmakers put an end to the tax credit and subsequently pursued deep tax […]

NC Policy Watch: North Carolina can make tax system more fair by reinstating its state Earned Income Tax Credit

May 22, 2014

It comes as no surprise to working families that North Carolina’s tax system is fundamentally unfair. Families who make less than $47,000 a year pay, on average, nearly 2 times more of their income in state and local taxes than those making more than $345,000. But taxpayers don’t have to accept this fundamental unfairness. One […]

Voices for Illinois Children: Double the EITC to Make Illinois Taxes Fairer (Among Other Great Things)

May 22, 2014

The more money you make in Illinois, the lower share of it you pay in state and local taxes. If that sounds unfair, that’s because it is. In fact, low- and middle-income workers pay, on average, two to three times the percentage of their income in state and local taxes that the wealthiest Illinoisans pay. […]