Institute on Taxation and Economic Policy

ITEP's Research Priorities

Arkansas Advocates for Children and Families: Arkansas Tax System Worsens Economic Inequality

October 17, 2018

Another key driver of inequality in Arkansas’s tax system is the preferential treatment given to capital gains income. Currently, half of all capital gains income is exempted, or ignored, from income taxes even though nearly no one makes a significant share of their income through capital gains (except for the top 1 percent). According to a report from the Congressional Budget Office, capital gains make up 38 percent of the income of the richest 1 percent of households in this country, compared to just 5 percent of the income for the poorest households.

Minnesota Budget Project: Minnesota Ranks High for Tax Fairness in 50-State Study

October 17, 2018

In an era of income inequality and growing concentration of wealth, a new 50-state study released today analyzes whether state tax systems make income inequality better or worse. The Institute on Taxation and Economic Policy (ITEP) finds that nearly every state fails basic measures of fairness, but Minnesota is among a small number of states where income inequality is reduced by state tax policy.

NC Policy Watch: Low-income Tax Payers in NC Pay More of Their Income in State and Local Taxes Each Year Than the Richest Taxpayers

October 17, 2018

Sales taxes play a critical role in the regressive and consequently inequitable nature of the North Carolina tax system. Like most other states, North Carolina relies on sales and excise taxes (30.7% of the 2018-2019 approved budget) as a primary mechanism to raise revenue. However, in North Carolina, sales and excise taxes are the most regressive taxes when compared to income and property taxes. The lowest 20% of North Carolina workers pay 6.1 percent in sales taxes as a percentage of their income while the top 1 percent pays less than 1 percent in sales taxes as a percentage of…

Alabama Arise: The Less You Make, the More You Pay: Alabama’s Taxes Remain Upside Down

October 17, 2018

Low-income Alabamians pay twice as much in state and local taxes as a share of their income compared to the state’s wealthiest residents, according to a study released Wednesday, Oct. 17, 2018, by the Institute on Taxation and Economic Policy (ITEP), a nonprofit research organization based in Washington, D.C. The study, Who Pays?, analyzes major state and local taxes in all 50 states, including personal and corporate income taxes, property taxes, sales and other excise taxes.

Uprise RI: Low-income Taxpayers in Rhode Island Pay Over 50 Percent More in Taxes Than the Wealthiest

October 17, 2018

There’s a practical reason for Rhode Island and all states to be concerned about regressive tax structures, according to ITEP. If the nation fails to address growing income inequality, states will have difficulty raising the revenue they need over time. The more income that goes to the wealthy (and the lower a state’s overall tax rate on the wealthy), the slower a state’s revenue grows over time.

Oregon Center for Public Policy: Undocumented Workers in Multnomah County Pay Millions in Oregon Taxes

October 17, 2018

An estimated 27,000 undocumented Multnomah County residents pay nearly $19 million annually in state and local taxes. For perspective, that is enough to hire 217 teachers. Read more here

Oregon Center for Public Policy: Undocumented Workers in Washington County Pay Millions in Oregon Taxes

October 17, 2018

An estimated 27,000 undocumented Washington County residents pay more than $20 million annually in state and local taxes. For perspective, that is enough to hire 232 teachers. Read more here

Oregon Center for Public Policy: Undocumented Workers in Marion County Pay Millions in Oregon Taxes

October 17, 2018

An estimated 18,000 undocumented Marion County residents pay nearly $14 million annually in state and local taxes. For perspective, $14 million is enough to hire 157 teachers. Read more here

Arkansas Times: Report: Arkansas Taxes Unfair ….. To the Poor

October 17, 2018

Arkansas Advocates for Children and Families is highlighting a new report relevant to ongoing legislative discussions of "tax reform." It does not suggest the problem is taxation on the rich.

KUOW: Washington State Tops ‘Terrible Ten’ List for Taxes

October 17, 2018

Washington State's tax system is widening the gap between the rich and the poor. That's according to the Institute on Taxation and Economic Policy (ITEP) based in Washington, D.C. “What you see is that Washington’s tax system couldn’t possibly be further from hitting people evenly,” Carl Davis said. “People are having to devote very different shares of their household budgets to funding state and local government.”

Topeka-Capital Journal: New Study: Kansas’ Tax Policy Ranks as 23rd Most Regressive in the Nation

October 17, 2018

A 50-state study of tax systems found Kansas’ lowest-income residents pay 1.5 times more in taxes as a percent of income compared with the wealthiest residents, ranking the state 23rd in the nation on an equity index. “State lawmakers have control over how their tax systems are structured,” said Meg Wiehe, the institute’s deputy director and a study author. “They can and should enact more equitable tax policies that raise adequate revenue in a fair, sustainable way.”

Budget and Policy Center: Washington State Again Ranks Worst In The Nation For Our State Tax Code

October 17, 2018

Despite the many ways Washington state takes prides in its spirit of innovation, it still ranks dead last when it comes to its tax code, according to a new study by the Institute on Taxation and Economic Policy (ITEP). Our state has the most upside-down tax code in the country, forcing people with the lowest incomes to pay 17.8 percent in state and local taxes as a percent of their income – while the state’s wealthiest residents pay just 3 percent. 

West Virginia Center on Budget & Policy: Low-Income West Virginians Pay Far More in Taxes as a Percent of Income Than Wealthiest West Virginians

October 17, 2018

West Virginia's tax system is regarded as regressive because the lower one's income, the higher one's effective tax rate. While West Virginia has a progressive personal income (meaning the higher one's income, the higher one's effective personal income tax rate), it also, like most other states, relies heavily on the more regressive sales and excise taxes to raise revenue. Low-income West Virginians pay up to 6.6 percent of their income on sales and excise taxes, while the wealthiest in the state pay less than one percent of income in state and local sales taxes.

Public Assets Institute: New report: Vermont’s Tax System Is Among the Least Regressive

October 17, 2018

Tax systems generally favor the wealthy, but Vermont’s system is skewed less than most other states when it comes to high-income taxpayers. That was the key finding of a study released today by the Institute on Taxation and Economic Policy (ITEP) and Public Assets Institute.

Louisiana Budget Project: Louisiana’s Tax Code is Still Regressive

October 17, 2018

The wealthiest households in Louisiana continue to pay state and local taxes at a lower rate than those in the middle class and below, according to a new analysis that breaks down the tax rates by income brackets in every state. The report, Who Pays? A Distributional Analysis of the Tax Systems in All 50 States found that households with incomes in the lowest 20 percent pay nearly twice as much of their income in taxes as households in the top 1 percent. Louisiana has the 14th most regressive tax code in the country, according to the report by the…

Better Wyoming: New Report: Low-income Residents in Wyoming Pay an Effective Tax Rate More Than Three Times Higher Than the State’s Wealthiest One Percent

October 17, 2018

A new study released today by the Institute on Taxation and Economic Policy (ITEP) and Better Wyoming finds that the lowest-income Wyomingites pay an effective tax rate more than three times higher than the state’s richest residents. Wyoming’s tax rate gap between the working poor and the ultra-rich is one of the worst in the nation.

The Half Sheet: Virginia’s Tax System Is Upside Down

October 17, 2018

Virginia’s state and local taxes help to shape economic opportunity across the state. That’s because state and local revenues pay for the building blocks of thriving communities: schools, roads, libraries, and other public services. Unfortunately, the current state and local tax system is upside down. Families in Virginia have taxes withheld from their paychecks, and they also pay taxes when they shop at local businesses, buy groceries, or fill their gas tanks. But updated analysis from the Institute on Taxation and Economic Policy (ITEP) shows that Virginia’s low- and moderate-income households pay a higher share of their incomes toward state…

Oklahoma Policy Institute: New Analysis: Low-income Taxpayers in Oklahoma Pay More than Twice the Tax Rate Paid by the Richest Oklahomans

October 17, 2018

While Oklahoma has a reputation as a low tax state, poor and middle-income Oklahomans are actually paying a greater share of their income in taxes than the national average, while the richest 5 percent of households — with annual incomes of $194,500 or more — pay less.

Budget and Policy Center: Unacceptable. Washington Still Has the Nation’s Most Inequitable State Tax Code

October 17, 2018

Washington state continues to have the most upside-down tax code of any U.S. state, according to a new report from the Institute on Taxation and Economic Policy (ITEP). It wrongly requires people with the lowest incomes to pay six times more in taxes as a percent of their income than the state’s wealthiest residents to fund investments that benefit all Washingtonians.

Florida Policy Institute: Florida Has Third Most Unfair State and Local Tax System

October 17, 2018

Florida’s reputation as a “low-tax” state belies the reality that it is, in fact, a high-tax state for low- and moderate-income residents. Floridians with the lowest incomes — those earning less than $18,700 — contribute 12.7 percent of their incomes to state and local taxes, while the wealthiest top 1 percent — those with incomes of more than $548,700 — contribute just 2.3 percent of their income.

Louisiana Budget Project: Who Pays Taxes in Louisiana?

October 17, 2018

When it comes to paying for government services, Louisiana asks a lot more of those with the fewest resources than it does of its wealthiest citizens, according to new analysis by the Institute on Taxation and Economic Policy. Thanks to a heavy reliance on sales taxes and tax exemptions that favor the wealthy, the less you earn in Louisiana, the more of you pay in taxes as a percentage of income.

Louisiana Budget Project: Analysis: Louisiana’s Regressive Tax Structure Disproportionately Affects Low-income Residents

October 17, 2018

A new study released Wednesday by the Institute on Taxation and Economic Policy and the Louisiana Budget Project finds that Louisiana has the 14th most unfair state and local tax system in the country, with the lowest-income Louisianans paying almost two times more in taxes as a percent of their income compared to the state’s wealthiest residents.

Center on Budget Policy Priorities: State, Local Tax Systems Worsening Inequality

October 17, 2018

State and local tax systems can be a powerful tool for boosting economic opportunity, creating broadly shared prosperity, and building equitable state economies. But in nearly every state, they’re reinforcing and often worsening inequality, as the Institute on Taxation and Economic Policy shows in a new report.

Kentucky Center for Economic Policy: New Report: Wealthiest Kentuckians Pay the Lowest Tax Rate and the Problem Is Worsening

October 17, 2018

The study, Who Pays? A Distributional Analysis of the Tax Systems in All 50 States, evaluates the major components of state and local tax systems – including personal and corporate income taxes, property taxes, sales taxes and other excise taxes – for their overall distributional impact across income groups. For example, Kentucky’s low income tax credit means that people in poverty do not pay state income taxes. However, because the state fails to provide refundable tax credits to offset sales, excise and property taxes paid by low-income people, and because the state has a flat as opposed to graduated income…

Indiana Institute for Working Families: New Analysis: Indiana’s Tax System is Among the Dozen Most Regressive in the Country

October 17, 2018

The new ‘Who Pays?’ analysis follows the Institute’s August report ‘The Status of Working Families in Indiana, 2018’ which found the wealthiest Indiana earners have received an extra $2,446 from combined state income, corporate, and fuel tax changes since 2012, while taxes for the bottom 60% of middle class and working families have increased by an average $36.