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The Immediate Economic Impact of the Tax Cuts and Jobs Act Could be Even Less Than Expected
• By Richard Phillips
Now, new research from the Federal Reserve Bank of San Francisco finds that the Tax Cuts and Jobs Act may not be so much of a stimulus after all. In other words, lawmakers have left themselves with few options should the country face an economic recession, and the country may not receive a substantive economic benefit in the short term.
Building on Momentum from Recent Years, 2018 Delivers Strengthened Tax Credits for Workers and Families
• By Aidan Davis
Despite some challenging tax policy debates, a number of which hinged on states’ responses to federal conformity, 2018 brought some positive developments for workers and their families. This post updates a mid-session trends piece on this very subject. Here’s what we have been following:
State Rundown 7/10: Budget Brinksmanship and Ballot Battles
• By ITEP Staff
New Jersey avoided a second consecutive shutdown and proved that even against staunch opposition, progressive solutions to states' fiscal issues are attainable, and Arizona voters will likely have a chance to solve their education funding crisis in a similar way. Budget and tax debates remain to be resolved, however, in Maine and Massachusetts. Meanwhile, voters are gaining a clearer picture of what questions they will be asked on ballots this fall as signature drives conclude…
An Update on State Responses to the Federal Tax Bill
• By Dylan Grundman O'Neill
With many state fiscal years beginning July 1, most states that will make decisions this year about federal tax conformity have now done so, so it is now time for an update on how well state policymakers have kept to, or veered from, the path we charted out earlier this year. Most states that have enacted laws in response to the federal changes have adhered to some but not all of the principles we laid…
ITEP Summer Reading (and Listening) List
• By ITEP Staff
Ah, summertime – a season synonymous with sunshine, backyard barbecues and mercury rising. Outside of our day jobs analyzing tax policy, we occasionally take a break from our screens to reconnect with the written and spoken word. However you enjoy your summer downtime – visiting your childhood home, lounging at the lake, planning the ultimate […]
State Rundown 6/28: Budget Deals Reached in Nick of Time
• By ITEP Staff
This week, lawmakers in Louisiana, Pennsylvania, Rhode Island, Vermont, and the District of Columbia wrapped up their budgets in time for the new fiscal year that starts July first in most states, with some of these resolutions coming after contentious debates and repeated special sessions. New Jersey's debate is not yet finished as leaders clash over spending priorities and the taxes on millionaires and corporations needed to fund them. Meanwhile, signature drives to put tax-related…
Rigging the System and Poor Shaming (Rightly) Are Incompatible Political Strategies
• By Jenice R. Robinson
The absurdity of blaming poor and moderate-income people for their circumstances is close to running its course as an effective political tool, particularly as some elected officials more boldly assert their intent to cater to the whims of the wealthy. Take last year’s GOP-led drive to eliminate the Affordable Care Act (ACA), for example. House […]
Gas Taxes Rise in Seven States, Including an Historic Increase in Oklahoma
• By Carl Davis
A rare sight is coming to Oklahoma. The last time the Sooner State raised its gas tax rate, the Berlin Wall was still standing, and Congress was debating whether to ban smoking on flights shorter than two hours. Fast forward 31 years, and Oklahoma is finally at it again. On Sunday, the state’s gas tax rate will rise by 3 cents and its diesel tax rate by 6 cents. Both taxes will now stand at…
What’s at Stake in South Carolina’s Upcoming Tax Conformity Debate
• By Dylan Grundman O'Neill
South Carolina legislators will return next week to try to finalize a few issues before the end of their session and fiscal year on June 30th, including the question of how to respond to the federal Tax Cuts and Jobs Act (TCJA). That's a short timeframe with some important questions at stake, and some misinformation has been spread, so here's a quick guide to the facts, issues, and options.
State Rundown 6/21: Wayfair Decision Is Way Fair
• By ITEP Staff
The U.S. Supreme Court made big news this morning by allowing states to collect taxes due on internet purchases, which will help put main-street and online retailers on an even playing field while also improving state and local revenues and the long-term viability of the sales tax as a revenue source. Many states remain focused on more local issues, however, as Louisiana's third special session of the year kicked off, Massachusetts won a living wage…
Supreme Court Decision in Wayfair Is a Leap Forward for Sales Tax Modernization
• By Carl Davis
For years, state and local governments have been dealing with a tax enforcement nightmare as out-of-state Internet retailers have refused to collect sales tax. That non-collection was facilitated by a Supreme Court precedent that tax collection can only be required when a retailer has a “physical presence” inside of a state. In today’s ruling in […]
State Rundown 6/13: Budget Crunch Time Sets in as State Fiscal Years Come to Close
• By ITEP Staff
With many state fiscal years ending June 30th, budget negotiations were completed recently in California, Illinois, Michigan, and North Carolina. New Jersey remains a state to watch as a government shutdown looms but leaders continue to disagree about a proposed millionaires tax, corporate taxes, and school funding. In other states looking to wealthy individuals and large corporations for needed revenues, Arizona's teacher pay crisis could be solved with a tax on its highest-income residents and…
All Bets are Off: State-Sponsored Sports Betting Isn’t Worth the Risk
• By Misha Hill
Many state legislators and regulators are considering expanding state-sponsored gambling by allowing betting on major league sports games. But the revenue states could bring in isn’t worth the risk.
New Legislation Would Close Significant Offshore Loopholes in the Tax Cuts and Jobs Act
• By Richard Phillips
One simple rule should drive the nation’s international tax policies: tax the offshore profits of American companies the same way their domestic profits are taxed. The latest legislation to approach that ideal is the Per-Country Minimum Act (H.R. 6015), from Rep. Peter DeFazio (D-OR). The DeFazio bill closes the loophole that allows corporations to use foreign tax credits to shelter profits in tax havens from U.S. taxes. No other bill addresses this.
State Rundown 6/1: Time Is Ripe for Closer Look at Intergovernmental Relations
• By ITEP Staff
This week, Virginia lawmakers overcame their budget impasse and approved an expansion of Medicaid, North Carolina's behind closed doors budget debate appears to be wrapping up, and Vermont's special session continues in the wake of the governor's vetoes of the state budget and accompanying tax bills. New research highlighted in our What We're Reading section shows that both corporate income tax cuts and business tax subsidies contribute to wider economic inequality. And the possible reconstitution…
Facebook Facing Shareholder Scrutiny for Its Offshore Tax Avoidance
• By Richard Phillips
In advance of its annual shareholders meeting on May 31, Facebook was confronted with a shareholder resolution asking it to endorse a set of principles to guide its tax policy and to ensure that such principles consider the impact of its tax strategies on local economies and public services. The resolution is a signal from a group of concerned shareholders that Facebook’s tax avoidance hurts its reputation, the communities in which it operates, and creates…
As IRS Prepares to Act, Red-State Taxpayers Profit from Use of SALT “Workaround Credits”
• By Carl Davis
A new ITEP report explains the close parallels between the new workaround credits and existing state tax credits, including those benefiting private schools. The report comes the same day that the IRS and Treasury Department announced they would seek new regulations related to these tax credits. It notes that the SALT workarounds are emblematic of a broader weakness with the federal charitable deduction. And it cautions regulators to avoid a “narrow fix” that will only…
New Legislation Would End Tax Incentives to Move Jobs and Profits Offshore
• By Richard Phillips
New legislation introduced today, the No Tax Breaks for Outsourcing Act, by Rep. Lloyd Doggett (D-TX) and Sen. Sheldon Whitehouse (D-RI) would help repair the damage to the international tax code wrought by the new Trump-GOP tax law and move toward a system where U.S. corporations can’t reap tax benefits from shifting jobs and profits offshore.
State Rundown 5/23: Special Sessions Abound Amid Budget Vetoes, Stalemates, Federal Tax Bill
• By ITEP Staff
This week the governors of Louisiana and Minnesota both vetoed budget bills, leading to another special session in Louisiana and unanswered questions in Minnesota, and Missouri legislators managed to push through a tax shift bill just before adjourning their regular session and heading right into a special session to impeach their governor. Wisconsin and Wyoming localities are both looking at ways to raise revenues as state funding drops. And our What We're Reading section contains…
Most States Have Raised Gas Taxes in Recent Years
• By Carl Davis
An updated version of this blog was published in April 2019. State tax policy can be a contentious topic, but in recent years there has been a remarkable level of agreement on one tax in particular: the gasoline tax. Increasingly, state lawmakers are deciding that outdated gas taxes need to be raised and reformed to fund infrastructure projects that are vital to their economies.
Debate Over New Jersey’s Millionaires and ITEP’s Data
• By Steve Wamhoff
New Jersey’s new governor, Phil Murphy campaigned on a promise to raise state income taxes on millionaires, a proposal that is supported by 70 percent of the state and was, until recently, backed by New Jersey’s Senate President, Steve Sweeney. In recent months, Sweeney changed his position on the proposed millionaires tax and called for an increase in New Jersey’s corporate tax instead. The idea of hiking taxes on corporations is not a bad one,…
State Rundown 5/17: Don’t Bet on Legal Sports Betting Solving State Budget Woes
• By ITEP Staff
This week the U.S. Supreme Court opened the door to legal sports gambling in the states (see our What We're Reading section), which will surely be a hot topic in state legislative chambers, but most states currently have more pressing matters before them. The teacher pay crisis made news in North Carolina, Alabama, and nationally. Louisiana, Oregon, and Vermont lawmakers are headed for special sessions over tax and budget issues. And several other states have recently reached or are very near the end of their legislative sessions.
Why Proponents of the Trump-GOP Tax Law Can’t Get their Story Straight
• By Steve Wamhoff
If you listened closely to today’s House Ways and Means Committee hearing on the Tax Cuts and Jobs Act (TCJA), you could sense that the witnesses speaking in favor of the new tax law were not 100 percent on the same page. This has been apparent ever since the law was enacted at the end of last year. The economists who speak in favor of the law (including Douglas Holtz-Eakin at today’s hearing) tend to…
There Is No Evidence That the New Tax Law Is Growing Our Economy or Creating Jobs
• By Steve Wamhoff
The House Ways and Means Committee will hold a hearing on the Tax Cuts and Jobs Act (TCJA) Wednesday. Proponents of the law likely will use the occasion to tout its alleged economic benefits and argue that its temporary provisions should be made permanent. The title of the hearing is “Growing Our Economy and Creating Jobs,” but there is little evidence that the law does either of these things.
NC Teachers’ March on Raleigh and the Tax Cuts that Led Them There
• By Aidan Davis
Once again, public school teachers are taking a stand for education and against irresponsible, top-heavy tax cuts that deprive states of the revenue they need to sufficiently fund public services, including education.
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