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Pandemic Profits: Netflix’s Record Profit Haul, Past Tax Avoidance Raise Questions about Tax Law’s Weaknesses
April 29, 2020 • By Matthew Gardner
At a time when many companies are facing existential threats due to the COVID-19 pandemic and associated economic shutdown, it is vital to ensure that our corporate tax laws apply fairly to companies that are still turning a profit in these turbulent times.
Sales Tax Policy in a Pandemic: Exemptions for Digital Goods and Services Are More Outdated Than Ever
April 29, 2020 • By Estefan Hernandez Escoto
Many states are making the decline in sales tax collection worse by failing to apply their sales taxes to digital goods (such as downloads of music, movies, or software) and services (such as digital streaming). A state that taxes movie theater tickets but not digital streaming, for instance, is needlessly hastening the decline of its own sales tax.
The CARES Act Provision for High-Income Business Owners Looks Worse and Worse
April 24, 2020 • By Steve Wamhoff
A select group of millionaires will receive an average tax break of $1.6 million thanks to a CARES Act provision that is receiving delayed but well-deserved scrutiny. Wealthy business owners are receiving this windfall because the CARES Act provides tax breaks to people with losses from a business they own. This approach may seem sensible because businesses small and large are taking a hit from the economic recession, but on close inspection, these provisions benefit those least in need and can be easily abused.
Partying Like It’s 2017: How Congress Went Overboard on Helping Businesses with Losses
April 24, 2020 • By Steve Wamhoff
The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides some needed relief for individuals and families, but two arcane tax provisions related to business losses will further enrich the wealthy and fail to boost our economy more broadly.
To Avoid the CARES Act’s Flaws, Invest in Automatic Relief
April 23, 2020 • By Jessica Schieder
With adequate automatic stabilizers, the United States might not end up with economic relief bills that have provisions tucked in them mostly helping millionaires, as we learned was the case with a CARES Act provision suspending limits on business losses. And regular people could get help more quickly, blunting the economic downturn.
In different ways, Earth Day and the COVID-19 pandemic convey a similar lesson: people around the world face shared struggles and disparate impacts, which they must work together to overcome through both emergency action and systemic change. In keeping with that lesson, state fiscal policy news this week was strikingly similar around the country, as states take account of the major threat posed by the pandemic to their budgets and attempt to grapple with its disproportionate impacts on communities of color and low-income families.
The full effect of the coronavirus pandemic on state revenue streams remains largely unknown. One key policy option is to reevaluate recent misguided tax cuts—particularly those that have not yet taken full effect and will add to growing revenue shortfalls in the coming years.
Morally and Economically, Including Undocumented Immigrants Is the Right Thing to Do
April 17, 2020 • By ITEP Staff
Undocumented immigrants pay taxes and play an integral part in the social and economic welfare of our country, yet Congress left them almost entirely out of the CARES Act package. Fortunately, immigrants, workers and their allies are helping policymakers advance better policy approaches.
State Rundown 4/15: Tax Day Delayed but Other Important Work Accelerated
April 15, 2020 • By ITEP Staff
April 15 is traditionally the day federal and state income taxes are due, but like so much else, Tax Day is on hold for the time being. Meanwhile the pandemic’s disastrous and uneven effects on communities and shared institutions are decidedly not suspended. But nor are the efforts of individuals, advocates, and policymakers to develop solutions to respond to the immediate crisis while also building better systems going forward. ITEP’s recommendations for state tax policy responses are now available here, and this week’s Rundown includes experiences and perspectives on paths forward from around the country.
Our elected officials have to listen to we the people and change their approach. Going forward, corporate voices cannot continue to steer. Instead, families, communities and working individuals have to lead our policymaking so it better helps people struggling now.
State Rundown 4/9: Pandemic’s Fiscal Effects Slowly Coming into Focus
April 9, 2020 • By ITEP Staff
The COVID-19 pandemic continued this week to wreak havoc on lives and communities around the world. The fiscal fallout of the virus in the states is growing as well, and beginning this week to come into sharper focus. This week’s Rundown brings together what we know of that slowly clarifying picture and how states are responding so far.
Addressing the COVID-19 Economic Crisis: Advice for the Next Round
April 7, 2020 • By Steve Wamhoff
Americans need many things right now beyond tax cuts or cash payments. But for people whose incomes have declined or evaporated, money is the obvious, immediate need to prevent missed rent or mortgage payments, skipped hospital visits and other cascading catastrophes. So, what should Congress do next to get money to those who need it?
Last week, President Trump destroyed everyone’s coronavirus press conference bingo card by announcing that a conversation he had with celebrity chef Wolfgang Puck inspired him to propose restoring a corporate tax deduction for business entertainment expenses. Trump’s own signature tax plan repealed this break two years ago.
Returning to the Economic Status Quo After COVID-19 Crisis Should Not Be an Option
April 6, 2020 • By Jenice Robinson
It will take immense imagination, unyielding political will and a fundamental reordering of our policy priorities to adequately address the problems of this moment and unrig our economy.
State Rundown 4/3: States Welcome Federal Aid, Seek Further Solutions
April 3, 2020 • By ITEP Staff
States and families got good news this week as Congress came together to pass major aid to help during the COVID-19 coronavirus pandemic. But that bright spot came amid an onslaught of very difficult news about the public health crisis and the economic and fiscal fallout accompanying it. This week’s Rundown brings you the latest on these developments and state and local responses to them.
Federal Relief Bill Doesn’t Go Far Enough: Q&A with Meg Wiehe
April 2, 2020 • By ITEP Staff, Meg Wiehe, Stephanie Clegg
The final version of the Coronavirus Aid, Relief and Economic Security (CARES) Act enacted last week included rebate provisions that will reach most low-, moderate- and middle-income adults and children, but not everyone. Meg Wiehe sits down for a Q&A to discuss who benefits from the rebate provision, who is excluded and how states can respond to support communities.
Sales Taxes and Social Distancing: State and Local Governments May Face Their Steepest Sales Tax Decline Ever
April 2, 2020 • By Carl Davis, ITEP Staff, Meg Wiehe
One pressing question is what will an economic downturn in which consumers are anxious, facing job loss, or simply spending their time sheltering in place and not spending money in typical ways, mean for states’ ability to raise revenue?
Boeing “CARES” A Lot About its Shareholders—But What about the Rest of Us?
April 1, 2020 • By Matthew Gardner
The gigantic Coronavirus-related tax and spending bill enacted last week, the so-called “CARES Act,” sets aside $17 billion in loans for “businesses critical to maintaining national security.” It’s generally understood that the bill’s authors want much, if not all, of this $17 billion to go to a single company: Boeing. So it behooves us to ask whether Boeing benefits America and its economy in ways that merit this largesse.
Temporarily modifying the structure of the EITC to reflect the realities of our current economy could provide a vital lifeline to low-income workers who have seen their incomes disappear during this crisis. What follows are a few such ideas which could be implemented at either the federal or state levels, or both.
House Democrats’ Suggestion of Retroactively Repealing SALT Cap is a Poor Emergency Relief Measure
March 31, 2020 • By Steve Wamhoff
The House Democrats have plenty of ideas to help workers and families and boost the economy, but Speaker Nancy Pelosi’s recent idea to repeal the cap on deductions for state and local taxes (SALT) is not one of them. The 2017 Trump-GOP tax law includes many provisions that should be repealed. Unfortunately, Congressional Democrats have long made it clear that they want to start by repealing the $10,000 cap on SALT deductions, which is one of the law's few provisions that restrict tax breaks for the rich.
Congress “CARES” for Wealthy with COVID-19 Tax Policy Provisions
March 31, 2020 • By Matthew Gardner
At a time when record numbers of Americans are facing unemployment, state and local governments are facing a perfect storm of growing public investment needs and vanishing tax revenues, and small business owners are struggling to avoid even more layoffs, lavishing tax breaks on the top 1 percent in this way shouldn’t be in anyone’s top 20 list of needed tax changes.
State Rundown 3/26: Pandemic’s Health and Fiscal Fallout Continues to Grow
March 26, 2020 • By ITEP Staff
This week’s Rundown brings you the most useful reading and resources about how states are affected by and responding to the COVID-19 pandemic. These include: landing pages for the most up-to-date lists of state policy responses; ITEP’s own materials on state policy options and the federal response bills; insights on how a race-forward approach can improve these efforts at all levels; updates on state fiscal troubles and legislative postponements; and the developing picture of which states and communities could be affected more than others.
How the Tax Rebate in the Senate’s Bill Compares to Other Proposals
March 25, 2020 • By Steve Wamhoff
Congress is poised to pass a $2 trillion plan that includes $150 billion in fiscal aid to states, $150 billion in health care spending, large expansions of unemployment compensation and more. These measures are clearly needed as the economy teeters on the brink. As the Senate votes on its stimulus/COVID19 bill, one provision ITEP has deeper insights on is the payments to households in the form of tax rebates. ITEP has provided several analyses over the past few days showing that the rebate in the current bill is an improvement over a previous GOP proposal but still falls short of…
COVID-19 and the Case for Race-Forward Economic Policy Prescriptions
March 24, 2020 • By Jenice Robinson
Unconscious bias runs deep. Legislative proposals to assuage the exploding economic crisis are advancing and changing quickly, but initial GOP proposals are consistent with the nation’s long history of ostensibly race-neutral policies that are discriminatory in their outcomes.
NEW ANALYSIS: House Democratic Stimulus Bill Explained
March 24, 2020 • By ITEP Staff, Meg Wiehe, Steve Wamhoff
Breaking ITEP analysis explains how a newly-introduced House Democrats' proposal—far more comprehensive and better targeted than the recently failed GOP Senate bill—combines overdue expansion of the Earned Income Tax Credit and Child Tax Credit with direct rebates to reach workers and families across all income groups.
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