The House Ways and Means Committee published its proposal for the cash payments, tax provisions and other changes that would make up part of the $1.9 trillion COVID relief legislation that President Joe Biden called for a few weeks ago.
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blog February 9, 2021 Details of House Democrats’ Cash Payments and Tax Credit Expansions
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media mention February 9, 2021 YahooFinance: Democrats Propose Leaving Out High Earners from Stimulus Checks and Trimming Jobless Benefits
Under Biden’s initial ‘American Rescue’ proposal, high-income households making $247,400 to $601,700 would get an average payment of $930 compared with a $280 payment for the same group under the… -
media mention February 9, 2021 Forbes: Biden Says He Supports $75,000-A-Year Threshold For Full $1,400 Stimulus Checks
An analysis from the left-leaning Institute on Taxation and Economic Policy found that proposals in the Democratic bill would boost income for the poorest Americans by around 33%. Read more -
media mention February 9, 2021 Washington Post: Here’s the New Democratic Plan for $1,400 Stimulus Payments
The best argument in favor of the checks is that they have kept many Americans out of poverty during the crisis. An analysis by the left-leaning Institute on Taxation and Economic Policy… -
media mention February 9, 2021 Tampa Bay Times: Florida Should Close Tax Loopholes for Corporations | Column
Because of its lopsided reliance on sales tax — which forces poorer people to pay a larger share of their income in taxes than richer people — Florida has one… -
media mention February 9, 2021 The Fiscal Times: Poorest Americans Would Get Major Income Boost From Covid Relief Bill: Report
Three provisions in the legislation released this week by the House Ways and Means Committee would provide a 33% income boost on average for the poorest 20% of Americans, according… -
blog February 9, 2021 Does New York’s Cannabis Tax Idea Offer a Glimpse of the Future?
Taxing cannabis won’t end New York’s budget difficulties, but a potency tax could bring New York a more sustainable stream of cannabis tax revenue than we see in most states. It could also have significant benefits for cannabis consumers.
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blog February 5, 2021 Faulty Fact Check on Tax Breaks for the Rich and Corporations
When it comes to tax policy, the details are complicated, but the story is often simple. For example, President Trump’s so-called Tax Cuts and Jobs Act (TCJA) disproportionately benefits the rich. This is not controversial. Yet some opinion makers with large megaphones get lost in the details and come to conclusions that only create more confusion.
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blog February 4, 2021 States Are Finally Going Bold with Progressive Tax Efforts
Advocates, lawmakers, study commissions, and even governors in some states are proposing bold tax policy reforms that look beyond pandemic-induced budget shortfalls and the “K-shaped recovery” to address underlying inequities and underfunding that gave rise to them. These efforts include proposals to: end or reverse regressive tax policies like the preferential treatment of income derived from wealth over income earned through work; restore or strengthen estate and inheritance taxes to slow the concentration of wealth in ever-fewer hands; raise revenue and slow inequality with progressive income taxes; and many other ideas to right upside-down tax codes while raising the revenue needed to invest in families and shared priorities.
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blog February 4, 2021 Corporations Avoid Taxes in a Pandemic
The public and the Biden administration say corporations should contribute to the public infrastructure that lets them earn so much. We agree. It’s the least we can ask, in a pandemic and at all other times too.
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blog February 3, 2021 Amazon Has Record-Breaking Profits in 2020, Avoids $2.3 Billion in Federal Income Taxes
Amazon’s winning streak in its battle against the U.S. tax system remains intact. This week the retail giant announced record-breaking sales and income for 2020, and an effective federal income tax rate of just 9.4 percent, less than half the statutory corporate tax of 21 percent. If Amazon had paid 21 percent of its profits in federal income tax, that would have come to $4.1 billion. The company’s reported current tax of $1.8 billion was less than half that, meaning last year Amazon avoided $2.3 billion in taxes.
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ITEP Work in Action February 3, 2021 Montana Budget & Policy Center: What Proposed Tax Cuts Really Mean for Montanans
The 2021 Montana Legislature has the opportunity to address longstanding inequities in Montana’s tax code that have made life harder for many families. Previous legislatures have chosen to balance the… -
blog February 2, 2021 President Biden’s Child Tax Credit Proposal Could Right a Historical Wrong
Many 1990s policies were grounded in harmful, erroneous ideas such as financial struggles are due to personal shortcomings and less government is better. Lawmakers didn’t apply these ideas consistently, however. For example, there was no drive to reduce corporate welfare even as policymakers slashed the safety net and disinvested in lower-income communities. So, it’s not surprising that a bipartisan group of lawmakers concluded during that era that the CTC was an appropriate vehicle to give higher-income households a tax break while leaving out poor children.
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blog February 2, 2021 Immediate Action State Lawmakers Can Take to Support Families and Children
If Congress does act and enact President Biden’s CTC expansion, states could simply couple to that federal change. The changes, while temporary, could become the foundation of a permanent state-level credit over the long-term. But state lawmakers need not wait for legislative action in DC. They can take immediate steps to ensure that their state’s most vulnerable children are positioned to succeed.
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blog February 1, 2021 Dems, Don’t Repeal the SALT Cap. Do This Instead.
Ever since it was enacted as part of the Trump-GOP tax law, some Democrats in Congress have been pushing to repeal the cap on federal tax deductions for state and local taxes (SALT). Recently several Democratic members have suggested that repeal of the cap should be part of COVID relief legislation.
While the cap on SALT deductions is problematic, repealing it without making other reforms would result in larger tax breaks for the rich. Instead, lawmakers should consider ITEP’s proposal to replace the SALT cap with a broader limit on tax breaks for the rich that would accomplish Biden’s goal of raising income taxes on people making more than $400,000, as he proposed on the campaign trail.
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blog February 1, 2021 Pandemic Profits: Netflix Made Record Profits in 2020, Paid a Tax Rate of Less than 1 Percent
Netflix’s “current” federal income tax for 2020 was $24 million, which equals just 0.9 percent of the company’s pretax income for the year. This is another way of saying Netflix paid an effective federal income tax rate of just 0.9 percent in 2020. If the company paid the statutory rate, its tax bill would be $572 million.
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media mention January 29, 2021 Law 360: La. Gov. Won’t Support Gas Tax Hike This Year Due To Virus
A January report from the American Petroleum Institute said Louisiana’s total per-gallon state taxes and fees of 20.01 cents on fuel rank below the national average of 36.83 cents for… -
media mention January 29, 2021 Bloomberg: The 2017 Tax Law Report Card: Grading the Big Promises (Podcast)
On the latest episode of our weekly podcast, Talking Tax, Bloomberg Tax reporter Lydia O’Neal spoke with Tax Foundation economist Erica York and Institute on Taxation and Economic Policy senior… -
media mention January 27, 2021 Business Insider: Democrats Are Setting the Stage to Propose $300 Monthly Direct Payments for Families with Children under 17
The Institute on Taxation and Economic Policy, a left-leaning think tank, released an analysis on Tuesday projecting that the poorest 20% of Americans — or those earning below $21,300 annually — would… -
media mention January 27, 2021 The 74: With DeVos Out, Movement for Private School Choice Shifts to State Legislatures
The scholarship policies rely on tax credits — from 50 up to 100 cents on the dollar, depending on the state — in return for contributions to assist with private… -
ITEP Work in Action January 27, 2021 Maine Center for Economic Policy: Tax Policy Options: Maine Needs Progressive Revenue Solutions to Build a Stronger, Fairer Future
Generally, the sales tax is regressive. The poorest one-fifth of families pay a share of their income in Maine sales taxes that is nearly nine times larger than the top… -
blog January 27, 2021 Disaggregating Data Illuminates a Path to Equitable Policy
The Biden administration’s move last week to establish an interagency working group to examine how well data is broken down, or disaggregated, within public sector data sources is welcome news. The executive order specifically names the limited availability of datasets disaggregated “by race, ethnicity, gender, disability, income, veteran status, [and] other key demographic variables.”
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media mention January 26, 2021 Raw Story: Expert Explains Why You Pay More than Corporations — and the People Who Own Them
The actual taxes paid in any given year may be less than zero as a company collects refunds on past taxes. Many big companies including Amazon have enjoyed a negative… -
media mention January 26, 2021 Bloomberg: The Trump Tax Cuts: Promises Made, Promises Kept?
In the waning days of the Trump administration, Bloomberg Tax examined the law’s stated goals and explored which of its seven major promises came to fruition. “The most prominent claims… -
report January 26, 2021 Child Tax Credit Enhancements Under the American Rescue Plan
President Joe Biden’s coronavirus relief package, the American Rescue Plan, includes a significant expansion of the Child Tax Credit (CTC). The president’s proposal provides a $125 billion boost in funding for the program, which would essentially double the size of the existing federal credit for households with children. Combined with existing law, the CTC provisions in Biden’s plan would provide a 37.4 percent income boost to the poorest 20 percent of families with children who make $21,300 or less a year.