Category: Federal Policy
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Steve Wamhoff
Director of Federal Tax PolicyIf the Supreme Court strikes down the Affordable Care Act (ACA), as argued for by the Trump administration and the president’s nominee to the court, Amy Coney Barrett, one under-appreciated result will be a tax break of roughly $40 billion annually for about 3 percent of Americans, who all have incomes of more than $200,000. -
Jenice R. Robinson
Communications DirectorSeptember 24, 2020
Of Shiny Objects and Scapegoats
While the moneyed elite were dangling shiny objects, scapegoating Black and brown people, denigrating immigrants, and financing studies to convince us that poor people are the problem, they were concurrently securing policies that cut taxes primarily for the rich and profitable corporations, deregulated industry, weakened unions and attacked voting rights. This and more allowed the rich to amass even more wealth and power. -
Steve Wamhoff
Director of Federal Tax PolicySeptember 18, 2020
New ITEP Estimates on Biden’s Proposal to Expand the Child Tax Credit
On Thursday, former Vice President Joe Biden announced that his tax plan would include a provision passed by House Democrats to temporarily expand the Child Tax Credit (CTC), potentially lifting millions of children out of poverty. Estimates from ITEP show that this change would benefit most families with children—more than 83 million children live in households that would benefit if this was in effect in 2020—but the most dramatic boost would go to low-income families. -
August 25, 2020
Missed Opportunity: Flimsy Paper Touts Flawed Program
Republicans continue to tout Opportunity Zones as their main vehicle to assist poor people, most recently with a deeply flawed report from President Trump’s White House Council of Economic Advisors and a mention from Donald Trump Jr. in his opening night convention speech. The report purports to compare—as a way of cutting poverty—tax breaks for investors vs food, cash or health insurance coverage for struggling families. -
Amy Hanauer
Executive DirectorThe biggest danger we face right now is that politicians will fail to get this health crisis under control and Americans will continue to die. The second biggest danger is that elected officials will fail to help families and communities, leading to foreclosures, evictions, and impoverishment—and also torpedoing the economy. With their inaction this week, the Senate seems determined to do both. Hold on everyone, we’re in for a sickening ride. -
Matthew Gardner
Senior FellowThe House Judiciary Committee last week held an antitrust hearing to scrutinize Amazon and other tech companies’ growing dominance. A look at the online retail giant’s new quarterly report and past tax avoidance reveals why lawmakers should be equally concerned about how the tax system allows dominant, profitable corporations to avoid most or all federal tax on their profits. Amazon, yet again, is poised to pay little or no federal income tax on its record profits, and it appears likely to do so using entirely legal tax breaks for stock options and research and development. -
Meg Wiehe
Deputy Executive DirectorDuring the Great Recession, the most ambitious state revenue-raising efforts closed just 10 percent of shortfalls and most states relied heavily on federal aid and budget cuts to balance their budgets. Of course, states can and should turn to progressive revenue-raising options now, but as the pandemic rages on, the extent of this crisis will become too significant for states and localities to handle on their own. The federal government should step in to help. -
A large majority of Americans want corporations to pay more taxes and Democratic presidential candidate Joe Biden has several proposals to achieve that. The newest idea is to require corporations to pay a minimum tax equal to 15 percent of profits they report to shareholders and to the public if this is less than what they pay under regular corporate tax rules. A recent article in the Wall Street Journal quotes several critics of the proposal, but none of their points are convincing. -
Amy Hanauer
Executive DirectorJuly 28, 2020
A Hero vs a Heel: No Contest
Americans are demanding policy that meets the needs of this urgent moment. There are now competing proposals from the U.S. House and Senate: One is a reasonable response to the staggering crisis we’re in. One is not. -
Steve Wamhoff
Director of Federal Tax PolicyJuly 21, 2020
New ITEP Report on Trump’s Payroll Tax Holiday
While the White House hasn’t clarified what it is proposing, we know that a payroll tax cut would not be well-targeted. In a new report, ITEP estimates the effects of suspending Social Security and Medicare payroll taxes for employees and employers from September 1 through the end of the year. We find that 64 percent of the benefits would go to the richest 20 percent of Americans while 24 percent of the benefits would go to the richest 1 percent. -
Steve Wamhoff
Director of Federal Tax PolicyThe Trump-GOP tax law enacted at the end of 2017 includes a $10,000 cap on the amount of state and local taxes (SALT) that people can deduct on their federal tax returns, and this is one of the few limits the law places on tax breaks for high-income people. Unfortunately, it is also the provision that some Democrats are most determined to remove. -
Jenice R. Robinson
Communications DirectorIRS Commissioner Charles Rettig vowed to work with Congress to explore how the federal tax system contributes to the racial wealth gap. There are at least two ways this can happen: tax policies enacted by Congress and IRS enforcement of these policies. -
Steve Wamhoff
Director of Federal Tax PolicyLawmakers often claim that they are “saving” taxpayers money by slashing federal spending, but the truth is that these cuts often are counterproductive and costly in the long-term. One type of budget-cutting has costs that are immediate and obvious—cuts to the IRS, the agency that collects the revenue that pays for federal spending. A new report from the Congressional Budget Office (CBO) confirms that lawmakers’ anti-government, IRS funding-cuts zeal has increased the deficit. -
Steve Wamhoff
Director of Federal Tax PolicyWhite House officials continue to discuss tax cuts in response to the COVID-19 pandemic. Steve Wamhoff provides a roundup of these terrible ideas that would do little to boost investment or reach those who need it most. -
New tax cuts to incentivize bringing jobs back to the United States will fail. No new tax provisions can be more generous than the zero percent rate the 2017 law provides for many offshore profits or the loopholes that allow corporations to shift profits to countries with minimal or no corporate income taxes. -
Steve Wamhoff
Director of Federal Tax PolicyProponents of capital gains tax breaks have always offered a weak argument that they encourage investment and thereby grow the economy. But the Trump administration is now floating a temporary capital gains tax break, which is supported by no argument at all. It would only reward investments made in the past while doing nothing to encourage new investment. -
Steve Wamhoff
Director of Federal Tax PolicyThe Health Economic Recovery and Omnibus Emergency Solutions (HEROES) Act includes important changes to business tax provisions in the CARES Act, the most recent COVID-19 legislation enacted by Congress and the president. The House-passed plan would undo CARES Act changes that make it easy for businesses to claim losses to reduce or avoid all taxes. […] -
Matthew Gardner
Senior FellowJPMorgan Chase CEO Jamie Dimon, in a May 19 memo to employees, outlines steps the company is taking to help its customers, small businesses and communities stay afloat. The part of the public relations memo that has received the most attention, however, is Dimon’s call for “rebuilding a more inclusive economy.” “It is my fervent […] -
Amy Hanauer
Executive DirectorMay 12, 2020
HEROES Act is an Appropriate Recession Response
House Democrats today introduced a proposal that responds to our staggering economic crisis with the right policies at the necessary scale. It’s a refreshing change from some of the misdirected ideas that have passed or been floated in these alarming economic times. -
Jessica Schieder
Federal Tax Policy FellowNew data released today estimates 20.5 million jobs were lost in the month of April alone. Workers not currently receiving paychecks would be left out of any benefits provided by a payroll tax cut. -
Steve Wamhoff
Director of Federal Tax PolicyNone of the tax proposals considered by the administration would provide help to those who need it or do much, if anything, to boost investment. -
Steve Wamhoff
Director of Federal Tax PolicyLast August, long before COVID-19 ravaged the U.S. economy, the Trump Administration began touting a payroll tax cut as a stimulus. Now, with more than 30 million official unemployment claims and projections that the jobless rate could grow to Depression-era levels, the White House is claiming that a payroll tax cut is the best way […] -
Matthew Gardner
Senior FellowMay 5, 2020
The Price We Pay for Amazon in Its Prime
There is every reason to believe that Amazon will continue its tax-avoidance ways in 2020. The entirely-legal tax avoidance tools the company used to zero out its federal income tax bills over the last three years remain entirely legal today. From accelerated depreciation to the research and development tax credit to the deduction for executive stock options, Amazon’s tax avoidance tools have been blessed by lawmakers, and presidents, of all stripes. -
Amy Hanauer
Executive DirectorApril 29, 2020
Economic Catastrophe in States Looms as Federal Relief Lags
A bipartisan group of governors and senators from Louisiana to Maryland to Ohio have called for at least $500 billion in state and local fiscal relief. They also need specific help with testing, protective equipment, unemployment costs, Medicaid costs, social services, education and infrastructure. States can’t be on their own as they address the double whammy of plunging revenue and skyrocketing needs. -
Steve Wamhoff
Director of Federal Tax PolicyA select group of millionaires will receive an average tax break of $1.6 million thanks to a CARES Act provision that is receiving delayed but well-deserved scrutiny. Wealthy business owners are receiving this windfall because the CARES Act provides tax breaks to people with losses from a business they own. This approach may seem sensible because businesses small and large are taking a hit from the economic recession, but on close inspection, these provisions benefit those least in need and can be easily abused.
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