Affordable housing advocates across the nation are attempting to address the problem at the local level, but they often face political and community opposition. These challenges are currently playing out in Baltimore, which is turning into a case study in how the best-planned civic interventions run into tough road blocks when it comes to tax increases versus moneyed special interest who seek to block those tax increases.
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blog December 4, 2018 Housing for All? Developers Bulldoze Taxpayers in Affordable Housing Debate
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ITEP Work in Action November 29, 2018 New Mexico Voices for Children: The Cliff Effect: One Step Forward, Two Steps Back
This report focuses on the cliff effect that occurs with the loss of child care assistance for New Mexico families. Losing child care assistance is especially detrimental to families because the cost of child care is so high. High-quality child care costs more than tuition and fees at New Mexico’s 4-year public universities, so it is an expense that even middle-income families struggle to meet. This report looks at the intensity of the child care cliff effect in New Mexico, as well as problems with income eligibility ceilings and co-pays, and offers policy solutions to these problems.
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ITEP Work in Action November 29, 2018 Public Assets Institute: A Fairer Tax System Would Help Working Families
The report looks at how well states distribute taxes based on family incomes. In most states lower-income families pay a higher percentage of their income in state and local taxes than those at the top. That’s the definition of a regressive tax system. Vermont’s is one of the least regressive in the country.
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ITEP Work in Action November 28, 2018 The EITC Boosts Opportunities for Communities of Color
State and local taxes play an important role in shaping economic opportunity. These tax revenues pay for the schools, roads, parks, and libraries that create a foundation for thriving communities. Yet we know that Virginia’s state and local tax system is upside down. In Virginia, households with low and modest incomes pay a higher share of their incomes toward state and local taxes than the highest-income households. In tax policy terms, this is known as a regressive system. And since historical and present-day barriers for communities of color have resulted in stark differences in income by race, this means these taxes particularly hit Black and Latinx families who are more likely to be paid low wages and struggle to make ends meet.
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blog November 27, 2018 GM Announcement Confirms Tax Cuts Don’t Prevent, May Encourage Layoffs
GM’s most recent quarterly financial report reveals the company has saved more than $150 million so far this year due to last year’s corporate tax cuts. So the layoffs announcement may seem especially jarring to anyone who believed President Trump’s claim that his tax cuts would spur job creation—including the Ohio residents Trump told directly “don’t sell your homes” because lost auto-making jobs “are all coming back.”
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ITEP Work in Action November 21, 2018 Voices for Illinois Children November Newsletter
The Institute for Taxation and Economic Policy (ITEP) released the sixth edition of its “Who Pays?” report on state tax systems. Voices’ policy analyst John Gordon detailed the findings of the report in a blog post. Illinois ranks #8 among ITEP’s “Terrible Ten” in terms of regressive state tax systems.
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ITEP Work in Action November 21, 2018 Wisconsin Budget Project: Wisconsin’s Tax System Requires the Least from Those Who Have the Most
Wisconsin residents with the lowest incomes pay about a third more of their income in state and local taxes than the wealthiest residents, according to new figures from the Institute on Taxation and Economic Policy. The poorest 20% of Wisconsin residents—a group with an average income of $14,700—pays 10.1 cents out of every $1 of their income in state and local taxes on average. In comparison, the richest residents of Wisconsin, who have an average income of $1.2 million, pay just 7.7 cents out of every $1 in income in state and local taxes.
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report November 19, 2018 The Failure of Expensing and Other Depreciation Tax Breaks
Congress permitted full expensing only for five years, which will encourage businesses to speed up investments they would have made later. Republicans in Congress have discussed making the expensing provision permanent. This report argues that Congress should move in the other direction and repeal not just the full expensing provision but even some of the permanent accelerated depreciation breaks in the tax code, for several reasons.
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ITEP Work in Action November 16, 2018 Advancing Racial Equity With State Tax Policy
States and localities could do more to help undo the harmful legacies of past racism and the damage caused by continuing racial bias and discrimination. If state budget and tax policies were better designed to address these harms and create more opportunities for people of color, state economies would be more equitable and likely also would be stronger, which in turn could benefit many state residents of all backgrounds.
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ITEP Work in Action November 15, 2018 The Governor’s Proposed Personal Income Tax Cut: Who Wins and Who Loses?
Governor Asa Hutchinson proposed a personal income tax cut as part of his balanced budget plan for the 2019 legislative session, released on November 14.
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ITEP Work in Action November 15, 2018 Oregon Center for Public Policy: Oregon Can Raise $376 Million by Clamping Down on Offshore Corporate Tax Avoidance
Oregon can clamp down on multinational corporations shifting profits overseas, create a more level playing field for Oregon businesses, and raise millions in revenue by enacting “complete reporting” by large corporations. That law would make it difficult for multinational corporations to avoid Oregon corporate income taxes by artificially shifting profits earned in Oregon to subsidiaries located abroad.
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ITEP Work in Action November 15, 2018 Louisiana Budget Project: Tax Code Is Holding Louisiana Back
Years of efforts to reform Louisiana’s regressive and overly complicated tax code have run aground in the state Legislature. The result: Louisianans pay the second-highest sales taxes in the nation, while the tax code is riddled with costly exemptions and deductions. The state’s broken tax structure is a major reason why the state lurched from budget crisis to budget crisis over the last decade and has struggled to fund critical programs and services like higher education and health care. The Advocate’s editorial board shares its thoughts on the latest report from the Institute on Taxation and Economic Policy.
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news release November 14, 2018 New 50-State Analysis: SALT Cap Repeal Would Be Costly, Mostly Benefit Top 1%
Repealing the 2017 tax law’s cap on state and local tax (SALT) deductions without replacing it with a different type of limit would pile one bad policy on top of the other, annually add $88 billion to the deficit-financed tax law, and mostly benefit the wealthy, a new 50-state analysis released today by the Institute on Taxation and Economic Policy reveals.
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report November 14, 2018 A Fair Way to Limit Tax Deductions
The cap on federal tax deductions for state and local taxes (SALT) that is in effect now under the Tax Cuts and Jobs Act (TCJA) is a flawed provision but repealing it outright would be costly and provide a windfall to the rich. Congress should consider replacing the SALT cap with a different type of limit on deductions that would avoid both of these outcomes. Using the ITEP microsimulation tax model, this report provides revenue estimates and distributional estimates for several such options, assuming they would be in effect in 2019.
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blog November 13, 2018 Three Tax Takeaways on Amazon’s Expansion Announcement
Today Amazon announced major expansions in New York and Virginia, where it intends to hire up to 50,000 full-time employees. The announcement marks the culmination of a highly publicized search that lasted more than a year and involved aggressive courting of the company by cities across the nation. The following are three tax-related observations on the announcement.
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blog November 13, 2018 15 Companies Report an Average 10.4 Percentage Point Drop in Effective Tax Rates Since 2017
Comparing the year’s first three quarterly filings of 2018 with those of 2017, we find that 15 of the largest Fortune 500 companies reported worldwide effective income tax rates declining by an average of 10.4 percentage points and by as much as 16 percentage points. In total these companies owed $22.3 billion less in taxes than they would have under their 2017 effective rates, saving an average of $1.5 billion each.
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ITEP Work in Action November 12, 2018 Tax Proposals Target Benefits to Those at the Top, Corporations
The Arkansas Legislative Tax Reform and Relief Task Force’s recommendations would make the state’s tax system even more regressive than it already is. According to a new analysis by Arkansas Advocates for Children and Families and the Institute on Tax and Economic Policy, the net overall impact of the combined recommendations would actually raise taxes on the neediest Arkansans. At the same time, it would target a bigger share of the decrease to those with the highest incomes.
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ITEP Work in Action November 9, 2018 Louisiana Budget Project: Race Equity and Taxes in Louisiana
Louisiana’s upside-down tax structure means the highest income-earners pay less than the poorest families, when measured as a percentage of income. The Institute on Taxation and Economic Policy’s “Who Pays” report lays this out in careful detail, and the latest edition breaks down the tax distribution by race. The conclusion: Black households pay a higher percentage of their income in state and local taxes than white households. Louisiana has work to do to make the tax structure fairer and reduce racial inequalities.
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ITEP Work in Action November 5, 2018 Louisiana Budget Project: Louisiana’s Regressive Tax Structure
Poor and middle-income families in Louisiana pay state and local taxes at a higher rate than the wealthiest families. That’s the key takeaway from the latest state-by-state breakdown of tax distribution by income groups from the Institute on Taxation and Economic Policy (ITEP). Louisiana’s tax structure is the 14th most regressive in the nation.
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November 5, 2018 Comments to be delivered during IRS hearing on “Contributions in Exchange for State or Local Tax Credits” (REG-112176-18)
ITEP views this proposal as a sensible improvement, and one that is actually overdue, to the way the charitable deduction is administered. At the end of my remarks I will discuss a few ways that the regulation could be improved. But the core point I want to emphasize is that the general approach taken here, where quid pro quo rules are applied in a broad-based fashion to all significant state and local tax credits, is the correct one.
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ITEP Work in Action November 3, 2018 Idaho Press: Economic Study Finds That Poor Idahoans Pay More State and Local Taxes Than Rich Ones
The biggest drivers of the inequality in Idaho are the sales and property taxes. In every bracket of income measured by the Institute’s report, the amount that families paid in state and excise taxes went down as their total income increased. The lowest-earning 20 percent spent twice as much of their annual income on property taxes as the highest 20 percent, with an average of 3.3 percent paid on their property compared to 1.6 percent.
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media mention November 3, 2018 The New Orleans Advocate: James Gill: Louisiana’s Tax System Isn’t the Most Unfair in the Nation, But It’s not for Lack of Trying
According to a study just released by the Institute on Taxation and Economic Policy in Washington, Washington State sets the regressive standard, while we rank 14th. If your income is $17,100 or less in Louisiana, you’ll pay 11.9 percent of it in taxes. That number shrinks the further you go up on the income scale and is roughly halved by the time you reach fat-cat territory. Sales and excise taxes take 9.2 percent from the poorest, and 1.2 percent from the richest.
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media mention November 3, 2018 The New Yorker: If Jeff Bezos Makes Washington the Second Headquarters of Amazon
Earlier this year, Seattle’s city council passed a tax on large corporations aimed at raising an estimated forty-seven million dollars a year for affordable-housing initiatives. But after about a month the city council repealed the tax—in response to a ballot challenge funded in part by Amazon, which threatened to leave Seattle if the tax was implemented. Matthew Gardner, a tax-policy analyst at the Institute on Taxation and Economic Policy, told the Washington Post, “Nobody on Seattle’s city council wants to be the one who chased Amazon out of town.”
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ITEP Work in Action November 2, 2018 Kansas Center for Economic Growth: Kansans of Color Often Pay More Than Their Fair Share of Taxes
Kansans believe in fairness. However, a recent study by the Institute on Taxation and Economic Policy (ITEP) and the Kansas Center for Economic Growth finds that the lowest-income Kansans are… -
ITEP Work in Action November 2, 2018 New Mexico Voices for Children: The Next Governor Should Improve Our Tax System and Increase Wages
When it comes to fairness, New Mexico’s tax system is backwards. Those who earn the smallest incomes pay the highest rates in state and local taxes, according to a new report from the Institute on Taxation and Economic Policy. The responsibility for taxes should not fall hardest on those with the least ability to pay, but it does. There are several ways we can make our tax system fairer.