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141 posts
“Compromises” Under Discussion for the State and Local Tax Deduction Do Not Fix Flawed Tax Bills
• By Meg Wiehe, Steve Wamhoff
Republicans in Congress are reported to be considering two versions of a change they claim would “improve” the current bills by making them more generous to residents of higher-taxed states. As illustrated by these estimates, the reality is that these proposals would make little difference on those states and taxpayers hit hardest.
Even with Potential SALT Compromises, Senate Bill Forces California and New York to Shoulder a Larger Share of Federal Taxes While Texas, Florida, and Other States Will Pay Less
• By Meg Wiehe, Steve Wamhoff
The Senate tax bill, with or without either of the compromises that could be added to it, would shift personal income taxes away from Florida and Texas to states like California and New York, which are already paying a high share relative to their populations.
Charitable, Property Tax, and Mortgage Interest Deductions Would Be Wiped Out for Two-Thirds of Current Claimants Under Congressional Tax Plans
• By Carl Davis
In the ongoing debate over major federal tax legislation, there is significant focus on how House and Senate bills would eliminate the deduction for state income tax payments and cap the deduction for property taxes at $10,000 per year. At the same time, tax writers have retained deductions for charitable gifts and mortgage interest with what appear to be comparatively minor changes, at least at first glance.
Senate “Pass-Through” Deduction Threatens to Undermine State Tax Systems
• By Carl Davis
The U.S. Senate will soon be voting on a bill that would, among other things, allow so-called “pass-through” businesses to pay significantly lower taxes than their employees...If the Senate “pass-through” deduction is enacted into law, dozens of states will be forced to confront the possibility of reduced revenue collections, more regressive tax codes, and increased tax avoidance.
New ITEP Report Explains How Tax Reform Should Eliminate Breaks for Real Estate Investors Like Trump
• By Steve Wamhoff
A new report from ITEP provides more details on the many breaks and loopholes for wealthy real estate investors like Trump and what a true tax reform would do to close them.
Senator Collins Pushes Hard for a Property Tax Deduction that Very Few of Her Constituents Will Be Able to Claim
• By Carl Davis
Adding a property tax deduction back into the Senate bill may sound like a compromise, but a new analysis performed using the ITEP Microsimulation Tax Model reveals that the amount of state and local taxes deducted by Maine residents would plummet by 90 percent under this change, from $2.58 billion to just $262 million in 2019. In short, this change is much more symbolic than substantive.
Republican Senators Debate Size of “Pass-Through” Break, But Proposed Compromises Will Make No Difference to Anyone Who Is Not Well-Off
• By Steve Wamhoff
Senators Ron Johnson of Wisconsin and Steve Daines of Montana want the tax bill on the Senate floor to be amended to offer a more generous tax break for “pass-through” businesses. We have estimated how all the provisions in the tax bill would impact each income group under three possible scenarios. The only thing different in each scenario is the size of the deduction for pass-through income: 17.4 percent (the deduction in the bill as…
A Corporate Tax Cut Would Benefit Coastal Investors, Not the Heartland
• By Carl Davis
The centerpiece of the House and Senate tax plans is a major tax cut for profitable corporations that the American public does not want, and that will overwhelmingly benefit a small number of wealthy investors living in traditionally “blue” states. New ITEP research shows that poorer states such as West Virginia, Oklahoma, Alabama, and Tennessee would be largely left behind by a corporate tax cut, while the lion’s share of the benefits would remain with…
Lawmakers Are Allowing Monied Interests to Trump the Voices of Their Constituents
• By Alan Essig
George Washington is said to have described the U.S. Senate as the body that cools the passions of an impulsive House of Representatives just as a saucer cools tea. But current Senate leaders appear to think of themselves as more of a Bunsen burner.
Chained CPI Would Raise Everyone’s Personal Income Taxes in the Future, Would Hurt the Poor Right Away
• By Steve Wamhoff
One of the findings is that every income group would face higher personal income taxes in years after 2025 (including 2027). Chained CPI would gradually push taxpayers into higher income tax brackets and make the standard deduction, the Earned Income Tax Credit, and several other breaks less generous over time. The switch to chained CPI would cause some low-income people to face a tax hike starting in 2019, the second year the plan would be…
Mick Mulvaney and the 19 States Paying Higher Taxes Under the Senate Tax Bill
• By Steve Wamhoff
One of the more surprising findings of ITEP’s recent estimates on the Senate tax bill is that 19 states would pay more overall in federal taxes if the bill becomes law. This is not just an increase in the personal income taxes paid (which would happen in some states under the House bill). This is an increase in their net federal taxes overall, even including the assumed benefits of corporate tax cuts and estate tax…
House Tax Plan Offers an Exceptionally Bad Deal for California, New York, New Jersey, and Maryland
• By Carl Davis
An ITEP analysis reveals that four states would see their residents pay more in aggregate federal personal income taxes under the House’s Tax Cuts and Jobs Act. While some individual taxpayers in every state would face a tax increase, only California, New York, Maryland, and New Jersey would see such large increases that their residents’ overall personal income tax payments rise when compared to current law.
House Tax Bill Would Put Property Tax Deduction Out of Reach for Most Households
• By ITEP Staff
The House of Representatives is expected to vote this week on a bill that would reduce federal revenues by roughly $1.5 trillion over the next decade. Despite the bill’s high price tag, many households would pay more in federal tax if the bill is enacted, in large part because it slashes the deduction for state […]
Flawed Data from House Leadership Attempts to Hide Tax Hikes Under Proposal
• By Carl Davis
In a story published yesterday evening, Politico reported that House leaders have been “working to create customized data models” to show lawmakers that their constituents will not face a tax increase under the tax bill being debated in the House. On this point, House leaders have taken on an impossible task.
House Tax Plan Would Make Offshore Tax Avoidance Substantially Worse
• By Richard Phillips
The Sunday release of the Paradise Papers has once again brought the issue of offshore tax avoidance to the forefront of public discussion. The papers expose the complex structures that companies such as Apple and Nike have pursued in recent years to pay little to nothing in taxes on their offshore earnings. Yet even as these revelations make headlines, House Republicans are moving forward with major tax legislation, the Tax Cuts and Jobs Act, that…
House Tax Bill Would Reserve Charitable Giving Subsidies for a Small Subset of Wealthier Households
• By Carl Davis, Steve Wamhoff
In the tax policy framework released in September, President Trump and Congressional leadership insisted that their proposal would retain the tax incentive for donating to charity because doing so helps “accomplish important goals that strengthen civil society, as opposed to dependence on government.” Now that the House has released a more detailed proposal, it is finally possible to evaluate exactly how their plans would impact the incentive to donate to charity.
Mortgage Interest Deduction Wiped Out for 7 in 10 Current Claimants Under House Tax Plan
• By Carl Davis, Steve Wamhoff
Throughout the ongoing federal tax debate, President Trump and Congressional leadership have insisted that while many tax deductions and credits would be wiped out, the mortgage interest deduction would be spared from the chopping block. But while the proposal recently unveiled by House leaders retains the mortgage interest deduction on paper, the actual substance of this policy would be nearly unrecognizable to today’s homeowners.
House Plan Slashes SALT Deductions by 88%, Even with $10,000 Property Tax Deduction
• By Carl Davis, Steve Wamhoff
One of the most contentious issues in the current federal tax debate is over what to do with the deduction for state and local taxes paid (the SALT deduction). Since the deduction’s benefits vary by state, the House proposal to drastically scale it back has led to an outcry among lawmakers from states such as New York, New Jersey, and California whose constituents would be impacted most dramatically by the change. In an attempt to…
House Tax Plan Will Keep 39.6% Top Rate, But That Won’t Matter for Most Types of Income Going to the Rich
• By Carl Davis
In recent days, news that House tax writers will not seek to cut the top personal income tax rate below 39.6 percent on taxable income above $1 million has led some to question whether the newest iteration of the Trump-GOP tax plan will provide a major windfall to the wealthy—a fact that has so far been widely understood. Unfortunately, this second-guessing is unnecessary.
The Framework’s Tax Increases and Tax Cuts by State
• By Steve Wamhoff
As our report on the Trump-GOP tax framework explained, in nine states plus the District of Columbia, more than a fifth of households would pay higher taxes under the framework.
GOP Tax Plan Will Mainly Benefit Millionaires Even If Top Rate Remains 39.6 Percent
• By Steve Wamhoff
The Trump-GOP taxframework would reduce the top personal income tax rate from 39.6 percent to 35 percent, but now lawmakers are discussing keeping the top personal income tax rate at 39.6 percent for those with taxable income of more than $1 million. This modification would barely change the proposal’s overall impact.
The Jig Is Up: Republican Budget Resolution Finally Admits That Deficit Will Soar Under GOP Tax Plan
• By Alan Essig
For some lawmakers, annual deficits matter a lot—unless the nation is paying for tax cuts for the wealthy via deficit spending. Last night, Republican lawmakers demonstrated that previous grandstanding about the nation’s debt is much ado about nothing. The Senate approved a budget resolution on a party-line vote that would 1. fast-track legislation adding $1.5 trillion to the deficit over 10 years by cutting taxes, and 2. make it easy to enact this measure without…
The Dishonest Pitch for Trump-GOP Tax Cuts
• By Richard Phillips
Real tax reform would mean raising more revenue to make public investments and increasing the progressivity of the tax code. Many conservatives strongly disagree with this and insist that a substantial tax cut for the wealthiest Americans will grow the economy. Rather than engage in this policy debate based on policy ideals and principles, President Trump, other White House officials and GOP leaders have peppered their sales pitch for tax cuts with false claims about…
Indiana’s Tax Cuts Under Mike Pence Are Not a Model for the Nation
• By Carl Davis
In announcing a new tax cut framework this week in Indianapolis that was negotiated with House and Senate leaders, President Trump claimed that “Indiana is a tremendous example of the prosperity that is unleashed when we cut taxes and set free the dreams of our citizens …. In Indiana, you have seen firsthand that cutting taxes on businesses makes your state more competitive and leads to more jobs and higher paychecks for your workers.”
Trump (Sort of) Used Our Data on Corporate Tax Avoidance, But He Missed the Point
• By Matthew Gardner
On Wednesday, reporters waiting to write about President Trump’s much-ballyhooed tax reform speech in Missouri received a fact sheet from the White House informing them that, “Fortune 500 corporations are holding more than $2.6 trillion in profits offshore to avoid $767 billion in Federal taxes, according to the Institute on Taxation and Economic Policy.”
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