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141 posts
What to Watch for on Tax Policy During the Presidential Primary
• By Steve Wamhoff
America needs a new tax code. The Democratic presidential debates beginning this week present an opportunity for candidates to make clear how they would address inequality or to raise enough revenue to make public investments that make the economy work for everyone. Here are some of the big tax issues that we hope they will touch on.
The SALT Cap Isn’t Harming State and Local Revenues. Myths About It May Be.
• By Carl Davis
A House Ways and Means subcommittee hearing on Tuesday will explore a highly controversial provision of the Tax Cuts and Jobs Act (TCJA) that prevents individuals and families from writing off more than $10,000 in state and local tax (SALT) payments on their federal tax forms each year. The focus of the hearing will be whether the cap negatively affects state and local revenue streams that fund schools, firefighters, and other services. There are at…
ITEP Resources on Proposed SALT Workaround Regulations
• By Carl Davis
After states implemented laws that allow taxpayers to circumvent the new $10,000 cap on deductions for state and local taxes (SALT), the IRS has proposed regulations to address this practice. It’s a safe bet the IRS will try to crack down on the newest policies that provide tax credits for donations to public education and other public services, but it remains to be seen whether new regulations will put an end to a longer-running practice…
Fact-Checking on Trump Tax Law Needs a Fact Check
• By Carl Davis
The Tax Cuts and Jobs Act (TCJA), enacted by President Trump and Congressional Republicans at the end of 2017, has caused quite a bit of confusion, and a recent “Fact Checker” column by the Washington Post’s Glenn Kessler does not help. TCJA created real problems that can't be resolved without real tax reform. To begin that process fact checkers, lawmakers, and everyone else need to be clear about what TCJA did, and did not, do…
New ITEP Report Shows How Congress Can Meet Public Demand for Progressive Taxes
• By Steve Wamhoff
A recent headline tells us that bold tax plans proposed by lawmakers today reflect a “profound shift in public mood.” But, in fact, the public’s mood has not changed at all. Americans have long wanted progressive taxes but few, if any, lawmakers publicly backed this view. What’s happening now isn’t a shift in public opinion, rather it’s Washington finally catching up with the American people.
Senator Sanders Proposes to Reform the Estate Tax
• By Alan Essig
Progressive tax proposals are finally being discussed with the urgency and seriousness they deserve. Following Rep. Alexandria Ocasio-Cortez’s call for a much higher marginal tax rate for multi-millionaires and Sen. Elizabeth Warren’s proposal to introduce a wealth tax for those at the very top, Sen. Bernie Sanders has introduced a revised version of his proposal to reform the federal estate tax.
How to Think About the 70% Top Tax Rate Proposed by Ocasio-Cortez (and Multiple Scholars)
• By Steve Wamhoff
The uproar deliberately steers clear of any real policy discussion about what a significantly higher marginal tax rate would mean. Her critics are mostly the same lawmakers who enacted a massive tax cut for the rich last year that was not debated seriously or supported by serious research. Meanwhile, multiple scholarly studies conclude a 70 percent top tax rate would be an optimal way to tax the very rich. Ocasio-Cortez has brought more attention to…
Five Things to Know on the One-Year Anniversary of the Tax Cuts and Jobs Act
• By Richard Phillips
While it has only been a year since passage of the Tax Cuts and Jobs Act (TCJA), it’s clear the law largely is both a debacle and a boondoggle. Below are the five takeaways about the legacy and continuing effect of the TCJA. 1. The Tax Cuts and Jobs Act will substantially increase income, wealth, and racial inequality. 2. The Tax Cuts and Jobs Act will continue to substantially increase the deficit. 3. The Tax…
End-of-Year Tax Measure Would Give Deficit-Financed Tax Cuts to Wealthy Families and Corporations
• By ITEP Staff
Outgoing Ways and Means Chairman Rep. Kevin Brady (R-TX) today introduced legislation that includes $80 billion in tax cuts that are unpaid for and largely benefit the wealthy. The bill would, among its numerous provisions, expand retirement and education savings programs that offer very little value to low-income families, delay the Health Insurance Tax for an additional two years, and delay the Medical Device Tax for an additional five years.
The Post-Midterms Tax Policy Outlook: Small Ball and Real Tax Reform Debate
• By Richard Phillips
With most of the results of the 2018 midterm elections in, the broad landscape for federal tax policy over the next couple years is coming into view. Democratic control of the House and Republican control of the Senate means a significant tax overhaul is unlikely, but minor tax changes may happen. And the run-up to the 2020 presidential election will force more robust debate over the impact of the Tax Cuts and Jobs Act (TCJA)…
Shaking up TCJA: How a Proposed New Credit Could Shift Federal Tax Cuts from the Wealthy and Corporations to Working People
• By Aidan Davis
A new federal proposal, the Livable Incomes for Families Today (LIFT) the Middle Class Act, would create a new refundable tax credit for low- and middle-income working families who were little more than an afterthought in last year’s federal tax overhaul. This proposal would take the place of TCJA, providing tax cuts similar in cost to the recent federal tax law but targeted toward working people rather than the wealthy. ITEP analyzed the bill, proposed…
Tax Policies Have Increased Inequality, and So Would Entitlement Cuts
• By Steve Wamhoff
Conversations about economics often take place on different planets, it seems. Economists and analysts note rising inequality in America. And it’s not just lefty analysts. The credit ratings firm Moody’s chimed in earlier this month, warning that inequality “is a key social consideration that will impact the U.S.’ credit profile through multiple rating factors, including economic, institutional and fiscal strength.”
We Crunched Some Numbers to Show What Tax Reform for Working People Really Looks Like
• By ITEP Staff
Throughout President’s Trump’s presidential campaign and from his first day in office until now, his administration has favored and promoted policies that benefit the wealthy and corporations even as it claims to be the working people’s champion. If more recent economic data are a reflection of what we’ll see in the long-term due to the Trump Administration’s recent tax cuts, wealth will continue to accrue at the top while income remains stagnant or barely budges…
How Opportunity Zones Benefit Investors and Promote Displacement
• By ITEP Staff
The idea behind the new tax break is to provide an incentive for wealthy individuals to invest in the economies of struggling communities. Despite alleged intentions, it appears opportunity zones are turning into yet another windfall for wealthy investors and may encourage displacement of people in low-income areas, working against the provision’s intended goal.
The Preferential Tax Treatment of Capital Gains Income Should Be Curbed, Not Substantially Expanded
• By Richard Phillips
For true believers in supply-side economics, however, one major flaw of the TCJA is that it did not further cut taxes for the wealthy by reducing capital gains tax rates. But now the Trump Administration is considering using executive action to remedy this by indexing capital gains to inflation for tax purposes.
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.
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.
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,…
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.
No Work Requirements for the Richest 1 Percent — Most of Their Tax Cuts Are for Unearned Income
• By Steve Wamhoff
The Trump Administration is pushing to add or strengthen work requirements for programs that benefit low- and middle-income people but holds a different view when it comes to the wealthy. Most tax cuts enjoyed by the richest 1 percent of households under the recently enacted Tax Cuts and Job Act (TCJA) are tax cuts for unearned income.
New UK Law May Shut Down the Biggest Tax Havens — Aside from the U.S.
• By Steve Wamhoff
The United Kingdom’s parliament has enacted a new law requiring its overseas territories — which include notorious tax havens like Bermuda, the Cayman Islands, and the British Virgin Islands — to start disclosing by 2020 the owners of corporations they register. This could shut down a huge amount of offshore tax evasion and other financial crimes because individuals from anywhere in the world, including the United States. have long been able to set up secret…
Trump Administration’s Spending Priorities Echo Tax Cut Priorities: Punish the Poor and Lavish the Rich
• By ITEP Staff, Jenice R. Robinson, Misha Hill
In 2017, the Trump Administration released a budget proposal filled with loaded language about “welfare reform” and moving able-bodied people from welfare to work. This narrative is designed to perpetuate the pernicious idea that poor people have personal shortcomings and are taking something that rightly belongs to others.
Congressional Budget Office: New Tax Law Helps Foreign Investors Even More than You Thought
• By Steve Wamhoff
President Trump and his allies in Congress have made many wild claims about economic growth that would result from the Tax Cuts and Jobs Act. And the Congressional Budget Office just released a report revealing the TCJA will, in fact, create economic growth — for foreign investors.
New ITEP Report: Extension of the Temporary TCJA Provisions Would Be Just as Regressive as TCJA Itself
• By Steve Wamhoff
A new ITEP report estimates the impacts in every state of the much-discussed idea of extending the temporary provisions in the Tax Cuts and Jobs Act, which will expire after 2025 without further action from Congress. The report concludes that extending or making permanent these provisions would be just as skewed to the wealthy as the original law.
Passing the Buck: Forcing Spending Cuts through a Balanced Budget Amendment
• By Ronald Mak
House leaders are preparing a vote on a balanced budget amendment next week that could force massive spending cuts and restrict the ability of lawmakers to raise revenue. Although a balanced budget amendment will likely be pitched as a way to address our nation’s long-term fiscal challenges, such proposals are economically harmful, ineffective, and one-sided.
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