Category: Federal Policy
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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. -
Steve Wamhoff
Director of Federal Tax PolicyIRS budget cuts starting in 2010 have forced the agency to reduce its audit rate for corporations with $20 billion or more in assets from 98 percent to 50 percent. The Washington Post found that during the decade, the amount of “uncertain tax benefits” claimed by corporations increased 43 percent, from $164 billion in 2010 to $235 billion in 2020. -
Jenice R. Robinson
Communications DirectorDuring a Tuesday webinar (The Child Tax Credit in Practice: What We Know about the Payoffs of Payments) hosted by ITEP and the Economic Security Project, panelists explained why the expanded Child Tax Credit is a transformative policy that should be extended beyond 2021. They highlighted tax policy and anti-poverty research and discussed lessons learned from demonstration projects that have provided a guaranteed income to low-income families. -
Meg Wiehe
Deputy Executive DirectorPresident Joe Biden's American Families and Jobs plans intend to “build back better” and create a more inclusive economy. To fully live up to this ideal, the final plan must include undocumented people and their families. -
Steve Wamhoff
Director of Federal Tax PolicyMembers of Congress frequently claim they want to make it easier for working people to scrape together enough savings to have some financial security in retirement. But lawmakers’ preferred method to (ostensibly) achieve this goal is through tax breaks that have allowed the tech mogul Peter Thiel to avoid taxes on $5 billion. This is just one of the eye-popping revelations in the latest expose from ProPublica. -
Aidan Davis
Senior State Policy AnalystNearly one in seven children in the United States live in poverty and about 6 percent of all children live in deep poverty. President Joe Biden’s American Families Plan would tackle child poverty in an immediate, meaningful way. It is expected to extend the one-year Child Tax Credit (CTC) enhancements included in the March 2021 American Rescue Plan (ARP) through 2025. Next year alone, this would provide around a $110 billion collective income boost to roughly 88 percent of children in the United States. -
Steve Wamhoff
Director of Federal Tax PolicyThe agreement announced over the weekend from the finance leaders of the Group of 7 (G7) countries to allow governments to tax some corporate profits based on the location of sales and to implement a 15 percent global minimum tax is a major step forward—but in no way changes the need for Congress to enact President Joe Biden’s tax reforms right now. -
Steve Wamhoff
Director of Federal Tax PolicyThe Treasury Department released a report explaining what the administration’s tax enforcement plan would do—and how it fits into the president’s overall plan to collect more revenue from profitable corporations and individuals making more than $400,000 a year. -
Each year, corporations publicly state that some of the tax breaks they claim are unlikely to withstand scrutiny from tax authorities. And each year, corporations report that they will keep some of the dubious tax breaks they declared in previous years simply because the statute of limitations ran out before tax authorities made any conclusions. This suggests that, perhaps because of cuts to its enforcement budget, the IRS is not even investigating corporations that publicly announce they have claimed tax breaks that tax authorities would likely find illegal. -
Aidan Davis
Senior State Policy AnalystOverall, the EITC enhancement would provide a $12.4 billion boost in 2022 if made permanent, benefiting 19.5 million workers. It would have a particularly meaningful impact on the bottom 20 percent of eligible households who would receive more than three-fourths of the total benefit. Forty-one percent of households in the bottom 20 percent of earners would benefit, receiving an average income boost of 6.3 percent, or $740 dollars. -
Marco Guzman
State Policy AnalystAs the Biden administration maps out the next steps in America’s response to the coronavirus pandemic—through what is now being called the American Families Plan—it should make sure a proposed expansion of the Child Tax Credit (CTC) includes undocumented children who have largely been left out of federal relief packages this past year. Prior to 2017 Tax Cut and Jobs Act, all children regardless of their immigration status received the credit as long as their parents met the income eligibility requirements. This change essentially excluded around 1 million children and their families. -
Amy Hanauer
Executive DirectorApril 27, 2021
Alvin Schorr and the Policy Relay Race
Sometimes a good idea takes a while. Alvin Schorr, who would have turned 100 this month, helped draft a 1972 bill “to provide for a system of children’s allowances.” He continued to push (in a 1977 congressional testimony and in a 1983 New York Times op-ed) for a refundable tax credit for all families and a children’s allowance, among other laudable ideas. A half-century later, these ideas—which many others have championed—are becoming reality. -
A bipartisan group of 32 House lawmakers banded together to form the “SALT Caucus,” demanding elimination of the SALT cap. None of their arguments in favor of repeal change the fact that it would primarily benefit the rich and, according to new research, exacerbate racial income and wealth disparities. -
Matthew Gardner
Senior FellowIt was (allegedly) P.T. Barnum who first said “there’s no such thing as bad publicity.” But the public relations professionals at the Nike Corporation clearly disagree with this maxim. Last week, after multiple media outlets, including the New York Times, wrote about ITEP’s conclusion that Nike avoided federal corporate income taxes under the Trump tax law, the company contacted these news organizations to… change the subject. -
Steve Wamhoff
Director of Federal Tax PolicyThe Biden administration has already provided details on its corporate tax proposals and in the next couple of weeks is expected to propose tax changes for individuals. Meanwhile, congressional Democrats have some ideas of their own. What should we expect?
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