Category: Federal Policy
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In just six short months, the enhanced Child Tax Credit (CTC), enacted as part of the American Rescue Plan (ARP), decreased the number of children living in poverty by 40 percent. ITEP estimated that the lowest-income 20 percent of households with children would receive a 35 percent income boost from this policy alone in 2021. This is a meaningful, life-changing sum. -
Joe Hughes
Federal Policy AnalystMillions of children in low-income families fared better last year thanks to expansions of the Child Tax Credit (CTC). But, as has been widely reported, the monthly payments of the improved CTC that started in July 2021 ended on Dec. 15 because one Democratic senator and all Republican senators opposed the Build Back Better Act […] -
Steve Wamhoff
Director of Federal Tax PolicyCongress expanded the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC) for 2021 as part of the American Rescue Plan Act (ARP). The additional benefits that millions of families and workers received under that law will end this month if Congress does not act soon. The CTC expansion boosted the annual tax credit […] -
ITEP Staff
December 9, 2021
Tax Credits in Build Back Better Support Millions of Families
Download the Fact Sheet Millions of people across the nation are better off financially thanks to temporary Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) expansions included in the March 2021 American Rescue Plan. Congress can ensure families continue to have the resources they need to thrive by passing the Build Back Better […] -
Steve Wamhoff
Director of Federal Tax PolicyRichest taxpayers would receive $0 benefit under new compromise compared with 51 percent of the benefit of House-passed SALT provision DOWNLOAD NATIONAL AND STATE-BY-STATE ESTIMATES In the latest chapter of the saga over SALT, some Senate Democrats are discussing a new compromise that would amend the House-passed provision providing relief from the SALT cap to […] -
Joe Hughes
Federal Policy AnalystA proposal in the Build Back Better Act before the House of Representatives would close a loophole allowing wealthy business owners to avoid paying taxes to fund healthcare. The proposal would ensure that high-income owners of certain pass-through businesses pay either the 3.8 percent net investment income tax (NIIT) or the 3.8 percent Medicare employment […] -
Aidan Davis
Senior State Policy AnalystDownload National and State-by-State Data Download Fact Sheet The Build Back Better plan working its way through Congress would bring transformative changes on many fronts, including to tax credits that bolster the incomes and economic security of millions of families. The version of the plan before the U.S. House of Representatives would extend temporary improvements […] -
Matthew Gardner
Senior FellowAmazon, Bank of America, Facebook, FedEx, General Motors, Google, Netflix, PayPal, T-Mobile and Verizon are just a few of the 70 corporations that would have paid more taxes under the Democrats’ proposed Corporate Profits Minimum Tax (CPMT) if it had been in effect in 2020 according to a new report from Sen. Elizabeth Warren’s office […] -
Joe Hughes
Federal Policy AnalystNovember 4, 2021
Democrats Seek to Eliminate the Stock Buyback Advantage
A provision in the emerging Build Back Better framework would remove tax advantages for corporations that transfer profits to their shareholders through stock buybacks rather than dividends. Corporations can shift their profits to shareholders either by paying them stock dividends or by buying their own stocks, which increases the value of the stocks held by […] -
Steve Wamhoff
Director of Federal Tax PolicyNovember 3, 2021
Senators Menendez and Sanders Show the Way Forward on the SALT Cap
Congressional Democrats negotiating the Build Back Better legislation are at a crossroads. Some Democrats want to amend the Build Back Better plan to repeal the $10,000 cap on federal deductions for state and local taxes (SALT). This would allow many rich people to pay lower personal income taxes than they pay now, as illustrated by […] -
Steve Wamhoff
Director of Federal Tax PolicyThe Billionaires Income Tax released today by Sen. Ron Wyden, chairman of the Senate Finance Committee, would ensure that the very richest Americans pay personal income taxes on all of their income each year, just as the rest of us already do. Wyden’s proposal would remove a long-standing tax break that has allowed the wealthiest […] -
Steve Wamhoff
Director of Federal Tax PolicyThe corporate minimum tax proposal released Tuesday night by Sen. Ron Wyden, the chairman of the Finance Committee, and Sens. Elizabeth Warren and Angus King, would be a huge improvement to the federal tax code. There are still important questions about whether the package of corporate tax reform in the Build Back Better bill will […] -
Brakeyshia Samms
State Policy AnalystThe well-documented economic plight facing millennials, a generation born between 1981 and 1996 that was ravaged by one of the worst recessions in history and an economic crisis induced by a global pandemic, is a stark reminder of the role that policy has in shaping economic outcomes. Some economists criticized the policy response to the […] -
Emma Sifre
Data AnalystOctober 18, 2021
The Role of Census Data in Policy and Racial Equity
As the 2020 Decennial Census begins to release public data, the question of how the U.S. Census Department defines race and ethnicity is drawing attention. In particular, there is growing concern that as the “Some Other Race” category becomes increasingly popular, it is obscuring important differences in the racial identities of Americans. In the 2020 […] -
Joe Hughes
Federal Policy AnalystA new report from ITEP finds that recent proposals to limit tax breaks for capital gains would reduce the racial wealth gap and mitigate economic inequality while affecting few people of any race. This report comes in the wake of proposals from President Biden, Senate Finance Committee Chairman Ron Wyden, and House Ways and Means […] -
October 4, 2021
State Income Tax Reform Can Bring Us Closer to Racial Equity
The origins of the racial wealth gap are far from mysterious. A long history of injustices and exclusionary policies and social practices created an economic system that privileges wealth and perpetuates the historical advantages bestowed on white individuals and families. Ending these inequities will require a concerted effort across policy areas at all levels of […] -
Steve Wamhoff
Director of Federal Tax PolicyLast week, a new report from the White House examining the wealthiest 400 Americans reaffirmed what the public recently learned from a ProPublica expose: The very wealthy do not pay income taxes on all of their true income each year the way the rest of us do. For high-net worth individuals and families, asset appreciation […] -
Carl Davis
Research DirectorSeptember 28, 2021
Reforming Federal Capital Gains Taxes Would Benefit States, Too
Congress’s action or inaction on federal tax changes under consideration in the Build Back Better plan could have important implications for states on many fronts. One critical area of note is at the foundation of income tax law: setting the definition of income that most states will use in administering their own income taxes. Lawmakers […] -
Steve Wamhoff
Director of Federal Tax PolicyDownload National and State-by-State Data A new ITEP report finds that the combination of tax changes in the Build Back Better bill recently approved by the House Ways and Means Committee would result in a tax cut for the average taxpayer in all income groups except the richest 5 percent. The effects of the policy […] -
Steve Wamhoff
Director of Federal Tax PolicyThe Ways and Means Committee, the tax-writing body in the House of Representatives, is continuing its work today on tax provisions in a reconciliation bill. The provisions to raise revenue would be huge improvements to our tax code, but they are not as effective as those proposed by the Biden administration. High-income people and corporations […] -
Neva Butkus
State Policy AnalystSeptember 14, 2021
New Census Data Highlight Need for Permanent Child Tax Credit Expansion
Millions of families struggled to make ends meet before Covid-19, and they continue to bear the brunt of the pandemic. Low- and moderate-income workers in the earliest days of the crisis lost their jobs at disproportionately higher rates because they did not have the luxury of working from home or they worked in essential or […] -
Aidan Davis
Senior State Policy AnalystThere is a lot to commend in the Ways and Means committee’s proposal to temporarily extend and, in some cases, make permanent federal tax credit enhancements. ITEP today analyzed the number and share of children nationally and in each state who would benefit from extending provisions making the CTC fully refundable. Nationally, 27 million children, […] -
Aidan Davis
Senior State Policy AnalystDownload the PDF Brief In a new brief, ITEP provides estimates of how a permanent expansion of federal Earned Income Tax Credit (EITC) enhancements under the American Rescue Plan Act (ARPA) could strengthen state-level EITC benefits and further boost economic security for lower-wage earners across the country. The EITC expansion targets workers without children in […] -
Aidan Davis
Senior State Policy AnalystFor the next six months, low-, middle- and upper-middle-income families with children are eligible to receive part of their 2021 Child Tax Credit (CTC) in advanced monthly payments. More than putting money in people’s pockets, this policy recognizes “the dignity of working-class families and middle-class families,” as President Biden said last week. -
Steve Wamhoff
Director of Federal Tax PolicySpecial interests lobbying against President Joe Biden’s tax agenda claim that his proposed corporate income tax rate hike will harm small businesses and that his proposed capital gains tax reforms will hurt family farms. Both claims are absurd attempts by powerful interests to pretend they are defending the little guy.
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