Institute on Taxation and Economic Policy

ITEP's Research Priorities

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Why States That Offer the Deduction for Federal Income Taxes Paid Get It Wrong

May 1, 2017 • By Dylan Grundman O'Neill

With many states currently facing budget shortfalls—whether due to weak economic recovery after the Great Recession, struggling commodity prices, or self-inflicted tax cuts—and all states bracing for possible federal budget cuts in areas from education to health care to infrastructure, states are unlikely to be able to continue providing high-quality services to their residents without raising new revenue. In this context, states must find ways to generate additional revenue without increasing taxes on individuals and families who are already struggling to make ends meet and may bear the biggest brunt of federal funding cuts.

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What Real Tax Reform Should Look Like

April 27, 2017 • By ITEP Staff

If lawmakers truly want to create an environment in which economic mobility is possible for more working people, budget-busting tax cuts are the wrong way to achieve this goal. Dramatic tax giveaways would force cuts to programs that provide early education, health care, job training, affordable housing, nutrition assistance, and other vital services that promote economic mobility. Further, current tax proposals from Congress and the Trump Administration defy what most Americans would consider true reform and, instead, embrace supply-side economic theories. This policy brief outlines two sensible, broad objectives for meaningful federal tax reform and discusses six tax policies that…

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3 Percent and Dropping: State Corporate Tax Avoidance in the Fortune 500, 2008 to 2015

April 27, 2017 • By Aidan Davis, Matthew Gardner, Richard Phillips

The trend is clear: states are experiencing a rapid decline in state corporate income tax revenue. Despite rebounding and even booming bottom lines for many corporations, this downward trend has become increasingly apparent in recent years. Since our last analysis of these data, in 2014, the state effective corporate tax rate paid by profitable Fortune 500 corporations has declined, dropping from 3.1 percent to 2.9 percent of their U.S. profits. A number of factors are driving this decline, including: a race to the bottom by states providing significant “incentives” for specific companies to relocate or stay put; blatant manipulation of…

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Undocumented Immigrants’ Tax Contributions in California: County-by-County Analysis

April 27, 2017 • By ITEP Staff

Guest Blogger; Josue Chavarin, Program Associate at the California Endowment California’s counties gain hundreds of millions of dollars in tax revenues from undocumented residents— collectively over $1.53 billion according to a new analysis from the Institute on Taxation and Economic Policy. Public debates in California over immigrants, specifically around undocumented immigrants, often suffer from insufficient […]

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Tax Justice Digest: Trickle-down revived, corps aren’t paying state taxes, young immigrants and taxes, etc.

April 27, 2017 • By ITEP Staff

In the Tax Justice Digest we recap the latest reports, blog posts, and analyses from Citizens for Tax Justice and the Institute on Taxation and Economic Policy. Here’s a rundown of what we’ve been working on lately. Here we go again The Trump Administration on Wednesday released a tax sketch that is a roadmap for […]

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State & Local Tax Contributions of Young Undocumented Immigrants (2017)

April 25, 2017 • By Meg Wiehe, Misha Hill

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. The report includes information on the national impact (Table 1) and provides a state-by-state breakdown (Appendix 1).

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Comparing the Distributional Impact of Revenue Options in Alaska

April 24, 2017 • By Aidan Davis, Carl Davis

Alaska is facing a significant budget gap because of a sharp decline in the oil tax and royalty revenue that has traditionally been relied upon to fund government. This report examines five approaches for replacing some of the oil revenue that is no longer available: enacting a broad personal income tax, state sales tax, payroll tax, investment income tax, or cutting the Permanent Fund Dividend (PFD). Any of the options examined in this report could make a meaningful contribution toward closing Alaska’s budget gap. To allow for comparisons across options, this report examines policy changes designed to generate $500 million…

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State and Local Tax Contributions of Undocumented Californians: County-by- County Data

April 24, 2017 • By ITEP Staff

Public debates in California over immigrants, specifically around undocumented immigrants, often suffer from insufficient and inaccurate information about the contributions of undocumented immigrants, particularly their tax contributions at the local and state level. The fact of the matter is undocumented immigrants living in the California pay millions of dollars each year in local taxes to the counties where they live (estimated to be more than $1.5 billion) and collectively an estimated $3 billion combined in state and local taxes. A little more than half of the total state and local taxes undocumented immigrants in California pay flow to local governments.

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The Trump Administration Should Not Reopen Offshore Loopholes Closed by Recent Regulations

April 21, 2017 • By Richard Phillips

A new executive order signed by President Donald Trump on Friday asks that Treasury Secretary Steven Mnuchin review significant tax regulations issued in 2016. The broader context of the order is that President Trump is seeking to roll back regulations across the government – many of which he claims are overly burdensome – and could […]

Kentucky Center for Economic Policy: What Good Tax Reform Looks Like

April 17, 2017

In contrast, HB 263 would ask more of those at the top and less of low- and middle-income people who currently pay a larger share of their income in taxes. To further help with inequities, the bill would create a state level Earned Income Tax Credit (EITC) – an effective poverty-fighting tool that supports work […]

Oregon Center for Public Policy: Undocumented Workers Pay Millions in Oregon Taxes and Would Pay Millions More Under Immigration Reform

April 17, 2017

Undocumented Oregonians pay taxes. The millions in taxes they pay to help fund schools and other public services that strengthen Oregon’s economy. Oregon would collect even more tax revenue under comprehensive immigration reform that would open a path to citizenship for undocumented workers. Under such a scenario, these immigrant Oregonians and aspiring citizens would contribute […]

Public Assets Institute: Meeting Vermonters’ needs in Fiscal 2018 and beyond

April 17, 2017

Elected leaders acknowledge investments are needed to clean up Lake Champlain, provide families with child care financial assistance, and make higher education more affordable. But progress has been slow in making these investments. And to balance the budget they make cuts—to Reach Up benefits for the poorest families, to affordable housing programs, to key policy […]

Open Sky Policy Institute: Amid budget woes, plan calls for tax cuts for the wealthy

April 17, 2017

LB 461, the tax-cut package put forth by the Revenue Committee, is first and foremost an income tax cut for wealthy Nebraskans and the proposal does little to truly address property tax relief. In fact, LB 461 is fundamentally flawed in a way that makes it more likely to exacerbate, not help, Nebraska’s reliance on […]

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Tax Justice Digest: Resources for Tax Day 2017

April 14, 2017 • By ITEP Staff

In the Tax Justice Digest we recap the latest reports, blog posts, and analyses from Citizens for Tax Justice and the Institute on Taxation and Economic Policy. Here’s a rundown of what we’ve been working on lately. Every year around Tax Day, ITEP updates some of its key reports to help put the nation’s tax […]

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10 Things You Should Know on Tax Day

April 13, 2017 • By ITEP Staff

Every year around Tax Day, ITEP updates some of its key reports to help put the nation's tax system in proper context. This year, as people around the country march to demand President Trump release his tax returns and as policymakers consider overhauling our federal tax system, these reports are especially critical. Read 10 Things You Should Know on Tax Day.

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Who Pays Taxes in America in 2017?

April 13, 2017 • By Matthew Gardner

All Americans pay taxes. Most of us pay federal and state income taxes. Everyone who works pays federal payroll taxes. Everyone who buys gasoline pays federal and state gas taxes. Everyone who owns or rents a home directly or indirectly pays property taxes. Anyone who shops pays sales taxes in most states.

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Fifteen (of Many) Reasons We Need Corporate Tax Reform

April 13, 2017 • By Matthew Gardner

Profitable Fortune 500 companies in a range of economic sectors have been remarkably successful in manipulating the tax system to avoid paying even a dime in tax on billions of dollars in U.S. profits. This ITEP report examines a select, diverse group of 15 corporations' tax situations to shed light on the widespread nature of corporate tax avoidance. As a group, these companies paid no federal income tax on $21 billion in profits in 2016, and they paid almost no federal income tax on $111 billion in profits over the past five years. All but one received federal tax rebates…

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The U.S. Is One of the Least Taxed Developed Countries

April 10, 2017 • By Richard Phillips

The most recent data from the Organization for Economic Cooperation and Development (OECD) show that the United States is one of the least taxed developed nations.

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U.S. Collects Smaller Share of Corporate Taxes Than Developed Country Average

April 10, 2017 • By Richard Phillips

Corporate income taxes in the United States as a share of the economy are well below the average among developed nations, according to an analysis of the most recent data from the Organization for Economic Cooperation and Development (OECD). Data from the OECD show that U.S. corporate taxes as a percentage of GDP are 2.2 percent, which is 24 percent less than the 2.9 percent weighted average among the 34 other OECD countries for which data were available.

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How to Shut Down Offshore Corporate Tax Avoidance, Full Stop

April 7, 2017 • By Richard Phillips

A new bill introduced this week by Rep. Mark Pocan (D-WI), the Tax Fairness and Transparency Act, would rip out the offshore corporate tax avoidance system by its roots. This legislation combines into a single, comprehensive bill elements of three pieces of legislation that Rep. Pocan has proposed in previous years. While many drivers of […]

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Two New Bills Would Plug Major Loopholes in Our Offshore Corporate Tax System

April 6, 2017 • By Richard Phillips

A new pair of bills introduced by Representative Lloyd Doggett (D-TX) this week would crack down on loopholes that allow corporations and individuals to avoid paying their fair share in taxes. Rep. Doggett’s Stop Tax Haven Abuse Act, which was sponsored by Senator Sheldon Whitehouse (D-RI) in the Senate, would close a number of the […]

Keystone Research Center: Who Pays for Property Tax Elimination?

April 6, 2017

Across all Pennsylvania families, property tax elimination would increase taxes by $334 per family. While property taxes would fall by an average of $1,685 per family, sales and income taxes would rise by over $2,000 on average per family. Moderate-income families (earning between $22,000 and $63,000), many of who live in rural areas, would see […]

Senator Jeff Flake: Tax Rackets: Outlandish Loopholes to Lower Tax Liabilities

April 5, 2017

“With a top rate of 40 percent, the U.S. has the highest corporate tax rate in the world.9 Yet, many corporations have not paid any federal income taxes for years.10” Read more here

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Testimony before the Alaska House Labor & Commerce Committee On House Bill 36

April 4, 2017 • By Matthew Gardner

Thank you for the opportunity to testify on the changes House Bill 36 would make to Alaska's tax treatment of pass-through income. The taxation of pass-through business entities has been a focal point of state and federal tax reform debates for over a quarter century, with a dual focus on minimizing the role of tax laws in determining the choice of business entity and on ensuring that the income of all business entities is subject to at least a minimal tax. My testimony makes two main points: 1. Alaska is one of a small number of states that do not…

Kentucky Center for Economic Policy: Undocumented Immigrants Contribute $37 Million Toward Investments in Kentucky Each Year

April 3, 2017

Undocumented immigrants living in Kentucky pay $36.6 million in state and local taxes each year, according to a new report from the Institute on Taxation and Economic Policy. These substantial tax contributions should be acknowledged as lawmakers consider the economic and social impact of immigration policy and enforcement in the U.S. – including a recent […]