Institute on Taxation and Economic Policy

ITEP's Research Priorities

Kansas Center for Economic Growth: New Analysis: Tax Reform Reduces Inequality for Kansans, but Low-Income Taxpayers Still Pay 1.5 Times the Rate Paid by the Richest

October 17, 2018

A new study released today by the Institute on Taxation and Economic Policy and the Kansas Center for Economic Growth finds that the lowest-income Kansans pay 1.5 times more in taxes as a percent of their income compared with the state’s wealthiest residents.

Insider NJ: New Analysis: Middle Class Taxpayers in New Jersey Still Paying More Than Tax Rate Paid by Richest 1 Percent of New Jerseyans

October 17, 2018

A new study released today by the Institute on Taxation and Economic Policy (ITEP) and New Jersey Policy Perspective (NJPP) finds that New Jersey’s middle class families pay more in taxes as a percent of their income compared to the state’s wealthiest residents. 

Politico Morning Tax: Desperately Seeking Clarity

October 17, 2018

MOST STATE TAX SYSTEMS REGRESSIVE: No state has more regressive taxes on its citizens than Washington, followed by Texas, Florida, South Dakota and Nevada, according to a distributional analysis of state tax systems that will be released today by the Institute on Taxation and Economic Policy. Most states take a larger share of income from low- and middle-income families than from wealthy families, it said. The 10 most regressive in the rankings tax their residents in the bottom 20 percent of the income scale at rates up to six times higher than the wealthy, while their middle-income families pay a rate up to…

Public News Service: Report: NM Tax Overhaul Would Benefit Kids, Families

October 17, 2018

Regressive tax systems hurt children and families, according to a new report from the Institute on Taxation and Economic Policy - and by that standard, it says New Mexico has the 19th-worst tax system in the United States. The study showed that as a share of their income, the lowest-income New Mexicans are paying state and local tax rates almost double those of the state's wealthiest residents.

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New Report Finds that Upside-down State and Local Tax Systems Persist, Contributing to Inequality in Most States

October 17, 2018 • By Aidan Davis

State and local tax systems in 45 states worsen income inequality by making incomes more unequal after taxes. The worst among these are identified in ITEP’s Terrible 10. Washington, Texas, Florida, South Dakota, Nevada, Tennessee, Pennsylvania, Illinois, Oklahoma, and Wyoming hold the dubious honor of having the most regressive state and local tax systems in the nation. These states ask far more of their lower- and middle-income residents than of their wealthiest taxpayers.

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Low-Tax States Are Often High-Tax for the Poor

October 17, 2018 • By Carl Davis

ITEP analysis reveals that many states traditionally considered to be “low-tax states” are actually high-tax for their poorest residents. The “low tax” label is typically assigned to states that either lack a personal income tax or that collect a comparatively low amount of tax revenue overall. But a focus on these measures can cause lawmakers to overlook the fact that state tax systems impact different taxpayers in very different ways, and that low-income taxpayers often do not experience these states as being even remotely “low tax.”

District of Columbia: Who Pays? 6th Edition

October 17, 2018 • By ITEP Staff

According to ITEP’s Tax Inequality Index, the District of Columbia’s local tax system does not worsen income inequality and ranks 50th on the index. The large income gap between lower- and middle-income taxpayers, as compared to the wealthy, is somewhat narrower after state and local taxes than before.

The American Prospect: Think the GOP Tax Cut Was for the Rich? Actually, It Was for the White and Rich.

October 16, 2018

The $1.5 trillion tax cut signed into law last December by President Trump is not only widening the economic gap between the rich and everyone else, but also between white Americans and people of color. That’s according to a new, first-of-its-kind analysis of the 2017 Republican Tax Act by the Institute on Taxation and Economic Policy (ITEP) and Prosperity Now, a nonprofit advocacy group for low-income households. Using an economic model created by ITEP, the report drills down on the racial implications of the Republicans’ handiwork. The report’s authors found that racial inequities are a feature of the tax law, not a…

Truthout: North Carolina Ballot Initiative Would Enshrine Tax Cuts for the Rich

October 16, 2018

“Since 2012, when Republicans took full control of the legislature and governorship for the first time in modern history, they’ve been on a tax cutting rampage,” said Meg Wiehe, a North Carolina native and deputy director of the Institute on Taxation and Economic Policy. “The state will be about $3.6 billion shorter in revenue than it would have been otherwise, which is a pretty significant difference in a state with a general fund of just around $21 billion.”

Pod Save the People: Flint: Lead & Beyond

October 16, 2018

DeRay, Brittany, Sam and Clint discuss the overlooked news, including the decline of U.S. prison populations, how American abortion policies affect women around the world, the death penalty, and who benefits from President Trump's tax cuts. (Podcast)

Law360: State Tax Codes Can Help Mitigate Poverty

October 15, 2018

State lawmakers have a tremendous opportunity to combat poverty with smart tax policies that can improve the lives of millions. Specifically, refundable tax credits for low-income workers and their families can play a role in positioning the nation’s most vulnerable families for success. Tax credits are also a vital tool for mitigating the upside-down nature of most state and local tax systems, which take a greater share of income from low- and middle-income families than from wealthy families. They are also especially important at a time when many federal lawmakers are determined to dismantle the safety net creating even more…

Mother Jones: A New Study Shows White Families Getting Four-Fifths of Trump’s Tax Cut

October 13, 2018

“Households of color have less income and have less wealth than white households, in large part due to centuries of systemic racism,” says Meg Wiehe, ITEP’s deputy director and one of the report’s authors. “So inevitably a tax cut that’s so expensive and so tilted to the top is furthering not just income inequality—it’s also furthering racial inequity in income and in wealth.”

Orlando Sentinel: Commentary: Vote No On Amendment 5: Allows a Few to Thwart the Needs of Many

October 12, 2018

This amendment would lock in tax breaks and loopholes for the wealthy and large corporations, making our tax system even more unfair than it is now. The nonpartisan Institute on Taxation and Economic Policy reports that only one state ranks lower in terms of the fairness of its tax system. Floridians who make $17,000 pay nearly 13 percent of their income in state and local taxes, and those who make more than $489,000 pay less than 2 percent. Amendment 5 would permanently enshrine this discrimination in our Constitution.

PolitiFact: Do Trump Tariffs Cost More Than Affordable Care Act Taxes?

October 12, 2018

Matt Gardner, a senior fellow at the Institute on Taxation and Economic Policy, added that regardless of imports volume, we don’t know how they will get passed through by the companies paying them, either. And not everyone has to pay them -- consumers could simply redirect their demand.

WBOC16: Incorporating in Delaware: The Perks and Pitfalls

October 12, 2018

Some critics of Delaware LLCs say until Delaware's corporate code is adjusted, criminal activity will continue to exist in Delaware's corporations. Matthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy, authored a report entitled "Delaware: An Onshore Tax Haven."

Louisiana Budget Project: Federal Tax Cut Worsening Racial Wealth Divide

October 12, 2018

While President Trump and Republicans in Congress heralded the Tax Cut and Jobs Act of 2017 as a major tax cut for the middle class, the numbers don’t bear that out. A new analysis by researchers at Prosperity Now and the Institute on Taxation and Economic Policy reveals just how much of the federal tax cut benefits went to the highest income earners, and the crumbs that were left over for low and middle-class households.

The Guardian: I’m Undocumented. It’s Time to Reveal What That Actually Means

October 12, 2018

Nationwide, the amount of taxes that the Internal Revenue Service collects from undocumented workers ranges from almost $2.2m in Montana, which has an estimated undocumented population of 4,000, to more than $3.1bn in California, which is home to more than 3 million undocumented immigrants. According to the non-partisan Institute on Taxation and Economic Policy, undocumented immigrants nationwide pay an estimated 8% of their incomes in state and local taxes on average. To put that in perspective, the top 1% of taxpayers pay an average nationwide effective tax rate of just 5.4%.

TalkPoverty: North Carolina Legislators Want to Add Tax Breaks for the Rich to the State Constitution

October 11, 2018

“Since 2012, when Republicans took full control of the legislature and governorship for the first time in modern history, they’ve been on a tax cutting rampage,” said Meg Wiehe, a North Carolina native and deputy director of the Institute on Taxation and Economic Policy. “The state will be about $3.6 billion shorter in revenue than it would have been otherwise, which is a pretty significant difference in a state with a general fund of just around $21 billion.”

Law360: TCJA Increases Racial, Economic Tax Divides, Report Says

October 11, 2018

The recent federal tax overhaul disproportionately benefits white households over households of color, increasing the wealth gap not just along income lines but along racial lines as well, according to a...

New York Times: White Americans Gain the Most From Trump’s Tax Cuts, a Report Finds

October 11, 2018

The tax cuts that President Trump signed into law last year are disproportionately helping white Americans over African-Americans and Latinos, a disparity that reflects longstanding racial economic inequality in the United States and the choices that Republicans made in crafting the law.

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ITEP Comments and Recommendations on Proposed Section 170 Regulation (REG-112176-18)

October 11, 2018 • By Carl Davis

The IRS recently proposed a commonsense improvement to the federal charitable deduction. If finalized, the regulation would prevent not just the newest workarounds to the $10,000 deduction for state and local taxes (SALT), but also a longer-running tax shelter abused by wealthy donors to private K-12 school voucher programs. ITEP has submitted official comments outlining four key recommendations related to the proposed regulation.

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Race, Wealth and Taxes: How the Tax Cuts and Jobs Act Supercharges the Racial Wealth Divide

October 11, 2018 • By Meg Wiehe

A newly released report by Prosperity Now and the Institution on Taxation and Economic Policy, Race, Wealth and Taxes: How the Tax Cuts and Jobs Act Supercharges the Racial Wealth Divide, finds that the TCJA not only adds unnecessary fuel to the growing problem of overall economic inequality, but also supercharges an already massive racial wealth divide to an alarming extent.

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‘Financial Exposure’ Showcases Tax Misconduct by Powerful Individuals and Corporations

October 10, 2018 • By Peter Della-Rocca

Elise J. Bean’s Financial Exposure reiterates the point that tax avoidance and tax evasion were endemic to our financial system long before allegations against a sitting president brought them to the forefront of the public consciousness.

NPR: It’s Been 25 Years Since The Federal Gas Tax Went Up

October 5, 2018

Yet over those 25 years, the cost of building and maintaining roads, bridges and transit has shot up, leaving the highway trust fund, which pays the federal portion of highway and transit projects, running on empty. “The whole reason this tax exists is to keep our roads paved and to keep our bridges from falling down,” says Davis. “And to do that effectively, it needs to collect a sustainable amount of revenue over time to cover the cost of paving roads and maintaining bridges, and it can’t do that if it’s just not updated for decades at a time.”

Concerned about Trump-family tax gaming? His law may prompt others to dodge.

October 5, 2018 • By Steve Wamhoff

“The IRS is wildly outgunned,” says Steve Wamhoff, director of federal tax policy at the Institute on Taxation and Economic Policy, a think tank in Washington. “You can’t keep cutting IRS funding and not expect more things like what The New York Times wrote about the Trumps. That’s bound to happen even more now.”