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State Rundown 1/31: Low-Income Families’ Taxes Getting Some Much-Needed Attention
January 31, 2018 • By ITEP Staff
This week was promising for advocates of Earned Income Tax Credits (EITCs) and other tax breaks for workers and their families, which are making headway in Alabama, Maine, Massachusetts, Missouri, Utah, and Wisconsin. The week also saw the unveiling of a tax cut plan in Missouri, a budget-balancing tax increase package in Oklahoma, the end of an unproductive film tax credit in West Virginia, and a very busy week for tax policy in Utah.
Moody’s and Conservative Economists Agree: The Trump Corporate Tax Cut Is Not Helping Workers
January 26, 2018 • By Steve Wamhoff
Moody’s does not believe that corporate tax cuts are trickling down to working people as bonuses and pay raises. The real problem with the corporate PR campaign is that even those economists who supported Trump’s corporate tax cut and claimed it would help workers do not believe that it works this way.
State Rundown 1/17: Budget Deficits, Online Sales Tax, and More
January 17, 2018 • By ITEP Staff
The big news this week in state tax law is that the U.S. Supreme Court has agreed to take on the issue of online sales, nexus, and sales tax collection. States have increasingly lost out on sales tax revenues as more transactions have shifted online from brick-and-mortar stores and the laws determining who is required to collect and remit sales taxes haven't kept up. This is potentially good news for states—25 of which National Association of State Budget Officers (NASBO) reports started the new year with budgetary deficits. In other news, grappling with the local impact of federal tax reform…
Repealing, or Working Around, the Cap on State and Local Tax Deductions Would Make the Trump-GOP Tax Law Even More Unfair
January 17, 2018 • By Steve Wamhoff
A bipartisan proposal in Congress to eliminate the new $10,000 cap on federal deductions for state and local taxes (SALT) would cost more than $86 billion in 2019 alone and two-thirds of the benefits would go to the richest 1 percent of households. Unfortunately, “work around” proposals in some states to allow their residents to avoid the new federal cap would likely have the same regressive effect on the overall tax code.
Using Private Debt Collectors as a Substitute for the IRS Is a Bad Deal
January 11, 2018 • By Matthew Gardner
If President Trump is indeed a deal maker, then he should dismantle Congress’s decision to rely on private debt collectors as a substitute for the Internal Revenue Service. This decision, championed for years by Sens. Charles Grassley, R-Iowa, and Chuck Schumer, D-New York, is a lousy deal for everyone--American taxpayers, the federal government--except private debt collectors.
State Rundown 1/4: Will States Show Resolve in a Challenging Year?
January 4, 2018 • By ITEP Staff
This week marks the beginning of what is bound to be a wild year for state tax and budget debates. Essentially every state is already working to sort through the complicated ramifications of the federal tax cuts passed in December, including Kansas, Michigan, Montana, and New Jersey highlighted below. These and other states will have important decisions to make about how to incorporate, reject, or mitigate various aspects of the new federal law, and will need considerable resolve to improve state tax policy to be more fair and more adequate – even as federal taxes become less so.
Final GOP-Trump Bill Still Forces California and New York to Shoulder a Larger Share of Federal Taxes Under Final GOP-Trump Tax Bill; Texas, Florida, and Other States Will Pay Less
December 17, 2017 • By Meg Wiehe
Residents of California and New York pay a large amount of the nation’s federal personal income taxes relative to their share of the population. As illustrated by the table below, the final GOP-Trump tax bill expected to be approved this week would substantially increase the share of total federal personal income taxes (PIT) paid by both states. Connecticut, Maryland, Massachusetts, and New Jersey would also see their share of federal PIT increase.
ITEP researchers have produced new reports and analyses that look at various pieces of the tax bill, including: the share of tax cuts that will go to foreign investors; how the plans would affect the number of taxpayers that take the mortgage interest deduction or write off charitable contributions, and remaining problems with the bill in spite of proposed compromises on state and local tax deductions.
As 2017 draws to close, Congress has yet to take legislative action to protect Dreamers. The young undocumented immigrants who were brought to the United States as children, and are largely working or in school, were protected by President Obama’s 2012 executive action, Deferred Action for Childhood Arrivals (DACA). But in September, President Trump announced that he would end DACA in March 2018. Instead of honoring the work authorizations and protection from deportation that currently shields more than 685,000 young people, President Trump punted their lives and livelihood to a woefully divided Congress which is expected to take up legislation…
“Compromises” Under Discussion for the State and Local Tax Deduction Do Not Fix Flawed Tax Bills
December 10, 2017 • 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
December 10, 2017 • 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
December 7, 2017 • 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.
New ITEP Report Explains How Tax Reform Should Eliminate Breaks for Real Estate Investors Like Trump
December 1, 2017 • 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.
A Corporate Tax Cut Would Benefit Coastal Investors, Not the Heartland
November 30, 2017 • 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 a relatively small number of wealthy investors who tend to be concentrated in larger cities near the nation’s coasts.
ITEP has analyzed each of the tax proposals advanced by the House and Senate in recent weeks. While some details have changed, the bottom line is the same: The plans would disproportionately benefit corporations and the wealthy. The Senate tax plan ITEP’s latest analysis examined the proposal that passed the Senate Finance Committee on Nov. […]
House Tax Plan Offers an Exceptionally Bad Deal for California, New York, New Jersey, and Maryland
November 14, 2017 • 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
November 13, 2017 • 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
November 9, 2017 • 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 Plan Slashes SALT Deductions by 88%, Even with $10,000 Property Tax Deduction
November 3, 2017 • 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 address those concerns, House leadership agreed to partially retain the deduction for real estate property taxes paid (up to $10,000 per year) while still repealing…
State Rundown 10/13: Soda Taxes, Business Subsidies, and Gas Taxes Considered in Several States
October 13, 2017 • By ITEP Staff
A comprehensive tax study is underway in Arkansas this week as other states hone in on more specific issues. Soda taxes hit setbacks in Illinois and Michigan, business tax subsidies faced scrutiny in Iowa and Missouri, and gas tax update efforts are underway in Mississippi and North Dakota.
State Rundown 9/25: No Rest for the Weary as State Tax and Budget Debates Wind Down, Ramp Up
September 25, 2017 • By ITEP Staff
Last week, Wisconsin leaders finally came to agreement on a state budget, while their peers in Connecticut appear to be close behind them. Iowa lawmakers avoided a special session with a short-term fix and will have to return to their structural deficit issues next session, as will those in Louisiana who will face a $1 billion shortfall. Meanwhile, District of Columbia leaders have already resumed meeting and discussing tax and budget issues there.
State Rundown 8/23: Few Lingering Budget Debates Cannot Linger Much Longer
August 23, 2017 • By ITEP Staff
This week, Oklahoma lawmakers learned they'll need to enter a special session to balance their budget and that they'll likely face a lawsuit over their low funding of public education. Pennsylvania's budget stalemate is also coming to a head as the state literally runs out of funds to pay its bills. And Amazon's tax practices are in the news again as the company has been sued in South Carolina.
This week, Rhode Island lawmakers agreed on a budget, leaving only three states – Connecticut, Pennsylvania, and Wisconsin – without complete budgets. Texas, however, remains in special session and West Virginia could go back into another special session over tax issues. And in New York City, the mayor proposes a tax on the wealthy to […]
Senate Health Care Reform Bill Just as “Mean” as the House Version
June 26, 2017 • By Alan Essig
The Congressional Budget Office today released its score of the Senate Health Care proposal and the news is not good. It’s no wonder a narrow group of 13 lawmakers cobbled together the bill behind closed doors. Now that the measure has seen the light of day, we know that it epitomizes Robin Hood in reverse policies by snatching health coverage from 22 million people by 2026 (15 million in 2018) while showering tax cuts on the already wealthy.
Which States Benefit from the Tax Cuts in the GOP Health Plan?
June 15, 2017 • By Steve Wamhoff
Congressional Republicans’ plans to repeal the two largest tax increases on individuals that were enacted as part of the Affordable Care Act (ACA) would disproportionately benefit residents of Connecticut, New York, the District of Columbia and 10 other states. The remaining states would receive a share of the tax cuts that is less than their share of the total U.S. population.
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