Blog - Federal Policy
Lawmakers have repeatedly stepped on the same rake of slashing tax rates and expecting revenues to magically go up. Now they want middle-class Americans to be the ones who get hit in the face. The con is getting tired. If Congress wants to reel in the debt then it’s time to raise taxes on the wealthy.
As one of the most prosperous countries in human history, we have enough resources for our collective needs. By better taxing corporations and the wealthiest, we can generate revenue to improve family security, strengthen our communities, and reduce the debt too.
Politifalse: A Fact-Checker Does Biden an Injustice on Taxes Paid by Billionaires
March 9, 2023 • By Michael Ettlinger
Most Americans pay more in Social Security and Medicare payroll taxes than they pay in federal personal income tax. So just looking at the personal income tax for comparison misses most of the taxes middle-income Americans pay. That is not true for billionaires because a much, much smaller proportion of their income is subject to the federal payroll taxes.
President’s Budget Would Strengthen Medicare Taxes Paid by the Wealthy
March 8, 2023 • By Joe Hughes
As part of his new budget plan, President Biden is asking the richest Americans to pay a little bit more to strengthen Medicare. The proposal includes raising taxes related to Medicare very slightly for the highest earners and closing a loophole that some wealthy individuals use to avoid Medicare taxes altogether.
The No Tax Breaks for Outsourcing Act Is Needed More than Ever
February 14, 2023 • By Steve Wamhoff
The new corporate minimum tax enacted as part of last year’s Inflation Reduction Act will address some of the worst corporate tax dodging, but what else is needed? A group of Democrats have answered this question with the No Tax Breaks for Outsourcing Act.
Biden Says the Stock Buyback Tax Should Be Higher. Here are Three Reasons Why He’s Right.
February 13, 2023 • By Joe Hughes
A higher tax on stock buybacks would reduce the tax disparity between dividends and buybacks, raise more revenue for productive public investments, and recoup some of Trump's corporate tax cuts that went to wealthy shareholders.
State of the Union Likely to Continue Progress on Tax Justice
February 7, 2023 • By Amy Hanauer
After decades of Presidents who ran away from taxes, it’s a sea change to have a chief executive who understands that the rich should pay their fair share, extremely profitable corporations should pay their fair share, and the public sector should have revenue to invest in problems – like climate change and healthcare – that will only be solved with pathbreaking public action.
Lawmakers in seven states will introduce legislation this week to tax wealth in a new coordinated effort to combat ever-increasing income and wealth inequality. The bills couldn’t come at a better time, as those at the very top continue to pull apart from the rest of us and far too many states contemplate piling on to this runaway inequality with seemingly endless tax cuts for those at the top.
GAO Report Confirms: Trump Tax Law Cut Corporate Taxes to Rock Bottom
January 13, 2023 • By Steve Wamhoff
A new report from the Government Accountability Office finds the average effective federal income tax rate paid by large, profitable corporations fell to 9 percent in the first year the Trump tax law was in effect, and the share of such companies paying nothing at all rose to 34 percent that year.
“Fair Tax” Plan Would Abolish the IRS and Shift Federal Taxes from the Wealthy to the Rest of Us
January 11, 2023 • By Steve Wamhoff
The "Fair Tax" bill would impose a 30 percent federal sales tax on everything we buy – groceries, cars, homes, health care - and lead to a giant tax shift from the well-off to everyone else.
New House Rules: Low Taxes for the Wealthy on Cruise Control, Tax Credits for Working People Face Roadblock
January 10, 2023 • By Joe Hughes
Two new rules will hamper the new Congress’s ability to pass tax legislation in the next two years. One requires a supermajority for legislation that increases income tax rates, and the other requires cuts to mandatory spending programs—like Medicare, Social Security, veterans’ benefits or unemployment insurance—in exchange for changes to the Child Tax Credit or Earned Income Tax Credit that would mostly help low-income families.
The “Family and Small Business Taxpayer Protection Act” would rescind 90 percent of the new funding for the IRS included in last year’s Inflation Reduction Act. This would eliminate the new law’s $45.6 billion to enforce the tax code for people making more than $400,000 and repeal an additional $26 billion in IRS funding that would include, among other things, a pilot for a free e-file program to make it easier for people with relatively simple tax returns to file. The slash-and-burn bill comes just weeks after Republicans forced a 2 percent cut in annual IRS funding as part of…
Congress should unite around a basic principle that Republican, Democratic, and independent voters support: the wealthiest, whether they are presidents, CEOs, or just rich heirs, should pay their fair share. Using Trump's tax maneuvering as a guidebook could make the tax code much fairer for all of us.
The European Union Moves Forward on Global Minimum Tax. Time for the U.S. to Follow.
December 21, 2022 • By Joe Hughes
The European Union has reached unanimous agreement to implement a global minimum tax beginning in 2024. With the EU and UK fully on board, it's time for Congress to follow suit and implement the plan negotiated by the Biden administration. Doing so would improve the corporate tax system here and around the world while making the United States economy stronger and more competitive.
The Tax Deal That Wasn’t: Congress Decides Corporate Tax Cuts Are Too Expensive if it Means Also Helping Children
December 20, 2022 • By Joe Hughes
Congressional leaders announced their long-awaited omnibus spending package which will fund the government through September 2023. The good news: the bill does not include needless corporate tax giveaways. The bad news: it also leaves out any expansion of the child tax credit.
Any tax legislation enacted before this Congress ends should prioritize policies that have a proven track record of helping workers and children rather than policies that cut taxes for corporations or for individuals who are already well-off. It's not clear right now whether lawmakers will do that - or whether they will enact any tax legislation at all before the year ends, but here we take a look at the key tax issues that lawmakers are discussing.
Lawmakers Seek to Extend Tax Break for “Research” that Corporations Use to Develop Frozen Foods, New Beer Flavors, Casino Games and Tax Avoidance
December 8, 2022 • By Steve Wamhoff
If Congress creates a tax break to encourage businesses to conduct research that benefits society, should Netflix be eligible for it? There is no shame in binge-watching Stranger Things or Bridgerton or The Crown, but how many of us really think Netflix deserves a tax break for whatever “research” the company did to provide this […]
Reversing the Stricter Limit on Interest Deductions: Another Huge Tax Break for Private Equity
December 6, 2022 • By Steve Wamhoff
Private equity is doing fine on its own and does not need another tax break. Congress should keep the stricter limit on deductions for interest payments —one of the few provisions in the 2017 tax law that asked large businesses to pay a little bit more.
Bipartisan Retirement Proposals Are Mostly Just More Tax Cuts for the Wealthy
December 5, 2022 • By Steve Wamhoff
The EARN Act and SECURE Act 2.0, two bipartisan retirement bills working their way through Congress, are major disappointments. They would mainly provide more tax breaks for the well-off who will most likely retire comfortably regardless of what policies Congress enacts. The bills would provide modest assistance for those who really need help to save.
Child Tax Credit Expansion Would Shrink the Racial Wealth Gap
November 21, 2022 • By ITEP Staff
Extending the expanded Child Tax Credit would benefit nearly every child in low- and middle-income families. Under current rules, 24% of white children, 45% of Black children, and 42% of Hispanic children will not receive the full credit in 2023 because their families make too little. These figures would drop to zero if the provisions were extended, helping families of all races and disproportionately helping families of color.
Key Republicans Say Negligible Decline in Economic Growth Outweighs Enormous Drop in Child Poverty
November 3, 2022 • By Joe Hughes
The expanded Child Tax Credit reduced child poverty dramatically and immediately. There is no debate or murkiness on this. Some lawmakers have decided that cutting child poverty in half is not worth the cost if it means an ambiguous and negligible decline in GDP growth. This view is not just cruel, it is bad economics.
Congress Should Not Leave Children Out of Possible Year-End Tax Deal
October 3, 2022 • By Steve Wamhoff
If lawmakers believe it’s worthwhile to extend corporate tax breaks, then it would be entirely unreasonable for them to not conclude the same about tax provisions that help low-income children.
Census Data Shows Need to Make 2021 Child Tax Credit Expansion Permanent
September 14, 2022 • By Joe Hughes
The Child Tax Credit expansion led to a 46 percent decline in childhood poverty. That it could be accomplished during the largest economic disruption in most of our lifetimes underscores a basic fact: thoughtful, decisive government action to combat poverty works.
Billionaires Should Pay Taxes on Their Income Every Year Like the Rest of Us
September 13, 2022 • By Steve Wamhoff
The Inflation Reduction Act signed by President Biden last month will crack down on corporate tax dodgers and strengthen enforcement of tax laws already on the books, raising hundreds of billions of dollars to be spent on climate, health and other priorities. But these reforms will not directly raise taxes on even the wealthiest individuals. […]
Romney Child Tax Credit Plan Would Leave Millions of Children Worse Off and Raise Taxes for the Average Black Family
September 7, 2022 • By Steve Wamhoff
Sen. Romney’s plan would expand the Child Tax Credit and offset the costs by scaling back other tax benefits. All told, it would raise taxes on a fourth of all kids in the U.S. This includes about a fourth of the children among the poorest fifth of U.S. families.
Blog Categories
Institute on Taxation
and Economic Policy
ITEP is a non-profit, non-partisan tax policy organization. We conduct rigorous analyses of tax and economic proposals and provide data-driven recommendations to shape equitable and sustainable tax systems.
Subscribe to ITEP Emails
Tax research and policy news in your inbox.
Promote Fair Tax Policy
Your gift to ITEP promotes tax justice. With your help, we do research that supports taxing millionaires and billionaires, taxing big corporations and raising revenue for the things our people, our communities and our planet need.
Together, we can create a country with more economic justice, more racial justice, more climate justice… and more tax justice.