Institute on Taxation and Economic Policy

ITEP's Research Priorities

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.

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

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

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

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

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.