While the White House hasn’t clarified what it is proposing, we know that a payroll tax cut would not be well-targeted. In a new report, ITEP estimates the effects of suspending Social Security and Medicare payroll taxes for employees and employers from September 1 through the end of the year. We find that 64 percent of the benefits would go to the richest 20 percent of Americans while 24 percent of the benefits would go to the richest 1 percent.
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blog July 21, 2020 New ITEP Report on Trump’s Payroll Tax Holiday
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news release July 21, 2020 New Analysis: Payroll Tax Cut Would Cost $336 Billion, Benefit Top 1 Percent Most
Media contact Temporarily eliminating all federal payroll taxes through the end of the year would cost $336 billion, deliver 64 percent of its benefits to the richest 20 percent of… -
report July 21, 2020 An Updated Analysis of a Potential Payroll Tax Holiday
ITEP estimates that if Congress and the president eliminated all Social Security and Medicare payroll taxes paid by employers and employees from Sept. 1 through the end of the year, 64 percent of the benefits would go the richest 20 percent of taxpayers and 24 percent of the benefits would go to the richest 1 percent of taxpayers, as illustrated in the table below. The total cost of this hypothetical proposal would be $336 billion.
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media mention July 17, 2020 Bloomberg: Virus Surge Hits Budgets of States Most Vulnerable to Shutdowns
As the two states have each surpassed nearly 600,000 confirmed cases combined, with daily new cases in the tens of thousands, governors in Florida and Texas are considering scaling back… -
blog July 17, 2020 SALT Cap Repeal Has No Place in COVID-19 Legislation: National and State-by-State Data
The Trump-GOP tax law enacted at the end of 2017 includes a $10,000 cap on the amount of state and local taxes (SALT) that people can deduct on their federal tax returns, and this is one of the few limits the law places on tax breaks for high-income people. Unfortunately, it is also the provision that some Democrats are most determined to remove.
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blog July 15, 2020 New Prosperity Now Report Identifies Upside-Down Tax Incentives
Ahead of this year’s delayed Tax Day, our partners at Prosperity Now released a powerful report providing a comprehensive overview of many of the ways our federal tax system privileges… -
media mention July 14, 2020 Salon: “Stunningly Tone-Deaf”: Ivanka Trump Criticized for Urging Jobless Americans to “Find Something New”
Roughly two-thirds of the temporary payroll tax cut would flow to the richest 20% of Americans, while the poorest 40% would get only 6% of the benefit, according to the… -
media mention July 14, 2020 The Epoch Times: Biden’s Progressive Tax Proposal Raises Rates on Wealthy and Corporations
“It’s probably one of the most progressive tax plans we’ve seen from a presidential nominee from one of the two major parties in many, many years,” Steve Wamhoff, director of federal… -
media mention July 14, 2020 Law 360: State And Local Tax Policy To Watch In The 2nd Half Of 2020
As states grapple with refilling their coffers in response to the COVID-19 pandemic, tax policy debates in the second half of 2020 could center on revisiting conformity to the federal… -
media mention July 14, 2020 Urban Milwaukee: Labor Leaders Slam Trump for Betraying Working People
By Democratic Party of Wisconsin The tax law Trump pushed through was a boon for large corporations, including those in Wisconsin like Kimberly Clark, that used the handout to shutter… -
media mention July 14, 2020 The Moneyist: ‘I’m Having a Hard Time Understanding How Earning Over $200K/year Is Too Much to Qualify for a Decent Stimulus Check’
According to the Institute on Taxation and Economic Policy, the majority of state tax systems are regressive. “Those in the highest-income quintile pay a smaller share of all state and… -
report July 14, 2020 Who Pays Taxes in America in 2020?
Having a sound understanding of who pays taxes and how much is a particularly relevant question now as the nation grapples with a health and economic crisis that is devastating lower-income families and requiring all levels of government to invest more in keeping individuals, families and communities afloat. This year, the share of all taxes paid by the richest 1 percent of Americans (24.3 percent) will be just a bit higher than the share of all income going to this group (20.9 percent). The share of all taxes paid by the poorest fifth of Americans (2 percent) will be just a bit lower than the share of all income going to this group (2.8 percent).
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news release July 13, 2020 ITEP: Tax Cuts for the Rich Will Exacerbate Inequality, Fail to Address Current Economic Crisis
Following is a statement by Amy Hanauer, executive director of the Institute on Taxation and Economic Policy, regarding White House Advisor Larry Kudlow’s statement on priorities for the next economic relief package.
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blog July 10, 2020 Adequately Funding the IRS Would Be One Small Step Toward Racial Equity in the Tax Code
IRS Commissioner Charles Rettig vowed to work with Congress to explore how the federal tax system contributes to the racial wealth gap. There are at least two ways this can happen: tax policies enacted by Congress and IRS enforcement of these policies.
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media mention July 9, 2020 Wall Street Journal Opinion: Payroll-Tax Cuts Mostly Go to the Well Off
Contrary to the authors’ claim, a payroll tax cut wouldn’t “disproportionately benefit” lower-income workers. According to the Institute on Taxation and Economic Policy, nearly half of the benefit from a… -
media mention July 9, 2020 Jacobin: The 1 Percent Are Cheating Us Out of a Quarter-Trillion Dollars in Taxes Every Year
On the international front, Trump’s 2017 tax cut bill included several provisions that “encourage American-based corporations to shift profits offshore,” according to the Institute for Taxation and Economic Policy. The… -
media mention July 9, 2020 Yahoo Finance: This GOP Proposal May Slash Taxes for Big Tech: ITEP
Matthew Gardner, Senior Fellow at the Institute on Taxation and Economic Policy, joins Yahoo Finance’s Zack Guzman to discuss how a possible Republican tax credit proposal could provide new breaks… -
media mention July 9, 2020 MedPage Today: Tenet Gets Big Federal $$$ but Still Cuts Employees
Many companies, including Tenet, delayed paying their 2017 tax liabilities at the rate then (35%) to follow whatever the rate is when they decide to pay (21% for 2019), said… -
media mention July 9, 2020 Gothamist: Undocumented Immigrants In Need Finally Get Promised Pandemic Cash Assistance
Most workers who lost their jobs during the COVID-19 pandemic started receiving unemployment and federal stimulus checks in March and April. But undocumented immigrants don’t qualify, even though the Institute… -
blog July 9, 2020 Congressional Budget Office Confirms That IRS Budget Cuts Lose Money and Benefit the Rich
Lawmakers often claim that they are “saving” taxpayers money by slashing federal spending, but the truth is that these cuts often are counterproductive and costly in the long-term. One type of budget-cutting has costs that are immediate and obvious—cuts to the IRS, the agency that collects the revenue that pays for federal spending. A new report from the Congressional Budget Office (CBO) confirms that lawmakers’ anti-government, IRS funding-cuts zeal has increased the deficit.
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media mention July 8, 2020 Business Insider: Trump Wants Tax Breaks to Encourage People to Watch Sports Games and Travel Around the US. Here’s Why That Could Backfire as the Pandemic Rages.
The McSally proposal also drew fire from economists who argued it would mainly benefit wealthier taxpayers and not be well targeted. “Low and most middle-income families will receive no or… -
media mention July 8, 2020 Financial Times: ‘It’s a Matter of Fairness’: Squeezing More Tax From Multinationals
Since the late 1980s, there has been a complete change in mindset, one pioneered and taken to its extreme by General Electric, America’s biggest manufacturer by market capitalisation for most… -
blog July 1, 2020 New Fiscal Year Brings New Challenges and Opportunities in the States
July 1—the start of the new fiscal year in most states—typically marks a point when one can take a step back and reflect on the wins and disappointments of the past state legislative sessions. 2020 is markedly different. Nationwide business closures and stay-at-home orders in response to COVID-19 have led to unprecedented spikes in unemployment, decreased demand for consumer spending, and increased demand for vital public services. As a result, states face incredibly uncertain financial futures with little clarity regarding how their tax collections will fare over the next year.
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media mention June 30, 2020 Nonprofit Quarterly: The $370 Billion Fiscal Cliff: Why State Budgets Need Our Attention
A 2018 study released by the nonprofit Institute on Taxation and Economic Policy finds that the poorest fifth spend on average 11.4 percent of their income on state and local… -
media mention June 30, 2020 Law 360: Biz Tax Credit Proposals Would Aid Wealthy, Report Says
Republican proposals to make business tax credits refundable to mitigate the economic downturn caused by the novel coronavirus pandemic would provide unnecessary tax breaks to high-income people, the Institute on…