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Carl Davis
Research DirectorFebruary 26, 2019
Overdue Gas Tax Hikes are Back on the Agenda in Statehouses
State tax policy can be a contentious topic, but one issue on which lawmakers largely agree is that higher gas tax rates are necessary to keep our nation’s infrastructure operating safely and efficiently. Lawmakers in 27 states have approved gas tax increases since 2013. -
Tom Robbins called February “the meanest moon of winter, all the more cruel because it will masquerade as spring, occasionally for hours at a time, only to rip off its mask with a sadistic laugh and spit icicles into every gullible face, behavior that grows quickly old.” Observers of state fiscal debates might think he was writing about similarly tiresome regressive tax cut proposals, which recently succeeded in Arkansas and advanced in North Dakota despite improved public understanding of the upside-down nature state tax systems, ineffectiveness of supply-side trickle-down tax cuts, and importance of investing in education. But like February (“as useless as the extra r in its name”), seemingly endless anti-tax crusades do come to an end and give way to brighter days and better policy. North Dakota lawmakers still have a chance to reject the current tax-slashing proposal, and progressive policy options remain on the table in many states.
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February 14, 2019
State Rundown 2/14: We ♥ Taxes!
Happy Valentine’s Day to all lovers of quality research, sound fiscal policy, and progressive tax reforms! This week, some leaders in ARKANSAS displayed their infatuation with the rich by advancing regressive tax cuts, but others in the state are trying to show some love to low- and middle-income families instead. WISCONSIN lawmakers are devoted to tax reductions for the middle class but have not yet decided how to express those feelings. NEBRASKA legislators are playing the field, flirting with several very different property tax and school funding proposals. And VIRGINIA’s legislators and governor just decided to settle for a flawed tax conformity deal rather than hold out for something better. Meanwhile, NEW YORK and Amazon have cancelled their engagement to one another for now. -
Carl Davis
Research DirectorFebruary 13, 2019
Fact-Checking on Trump Tax Law Needs a Fact Check
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 to our tax system. -
Matthew Gardner
Senior FellowIn an age when even the most incontrovertible facts are routinely dismissed as “fake news,” reporting on corporate taxes can be a daunting challenge for members of the media. ITEP’s recent analysis of the income tax disclosures made by Netflix in its annual financial report last week provide an excellent reminder of this. -
Steve Wamhoff
Federal Policy DirectorFebruary 13, 2019
SALT Deduction Cap Should be Reformed, Not Repealed
On Monday a group of Senators and Representatives from the Northeast announced their latest proposal to repeal the cap on deductions for state and local taxes (SALT), this time offsetting the costs by restoring the top personal income tax rate to 39.6 percent. This is an improvement over previous proposals to repeal the cap on SALT deductions without offsetting the costs at all. But the new approach does not improve our tax system overall. Instead, it trades one tax cut for the rich (a lower top income tax rate) for another (repeal of the cap on SALT deductions). -
Matthew Gardner
Senior FellowFebruary 13, 2019
Amazon in Its Prime: Doubles Profits, Pays $0 in Federal Income Taxes
Amazon, the ubiquitous purveyor of two-day delivery of just about everything, nearly doubled its profits to $11.2 billion in 2018 from $5.6 billion the previous year and, once again, didn’t pay a single cent of federal income taxes. -
ITEP Staff
February 11, 2019
A Tale of Two States: How State Tax Systems Perpetuate Income Inequality
To explain how state tax systems make income inequality worse, we compared tax systems in New Jersey and Texas which, before taxes, have similar levels of income inequality. This comparison provides an example of how policymakers’ decisions affect the economic wellbeing of their constituents. -
ITEP Staff
February 7, 2019
Trends We’re Watching in 2019
This year is full of opportunity for state policymakers and advocates seeking to improve upside-down tax systems and generate needed funding for shared priorities. In a series of blog posts, ITEP staff summarize key trends we are watching in statehouses this year, with special attention to the many efforts underway to reduce racial and economic inequities and better prepare state budgets for the next recession and reduced federal investments. Along the way, we’ll also draw attention to some of the more destructive policy ideas to watch for in 2019. -
Lisa Christensen Gee
Director of Special InitiativesIt’s always troubling for those concerned with adequate and fair public finance systems when states prioritize tax cuts at the cost of divesting in important public priorities and exacerbating underlying tax inequalities. But it’s even more nerve-racking when it happens on the eve of what many consider to be an inevitable economic downturn. -
Carl Davis
Research DirectorFew areas of state tax policy have evolved as rapidly as cannabis taxation over the last few years. The first legal, taxable sale of recreational cannabis in modern U.S. history did not occur until 2014. Now, just five years later, a new ITEP report estimates that recreational cannabis is generating more than $1 billion annually in excise tax revenues and $300 million more in general sales tax dollars. -
ITEP Staff
Consumption taxes are a significant source of state and local revenue, and we expect that lawmakers will continue to adjust state consumption tax levies to adapt to budget needs and a changing economy. -
Dylan Grundman O'Neill
Senior AnalystIn our last update on state responses to the federal tax cut (Tax Cuts and Jobs Act, or TCJA), we noted that several states were waiting until 2019 to make their final decisions, giving them additional time to (hopefully) respond in ways that improve their fiscal situations and upside-down tax codes. The TCJA is affecting the 2018 federal taxes people are filing now, in some cases adding urgency and/or confusion to these debates. -
Lisa Christensen Gee
Director of Special InitiativesA second notable trend in 2019 is states raising revenue to address longstanding needs and states allocating their surpluses to invest in critical public priorities such as early childhood programs, education and other human services. -
Aidan Davis
State Policy DirectorContinuing to build upon the momentum of previous years, states are taking steps to create and improve targeted tax breaks meant to lift their most in-need state residents up and out of poverty. Most notably, a range of states are exploring ways to restore, enhance or create state Earned Income Tax Credits (EITC). EITCs are an effective tool to help struggling families with low wages make ends meet and provide necessities for their children. The policy, designed to bolster the earnings of low-wage workers and offset some of the taxes they pay, allows struggling families to move toward meaningful economic security. Lawmakers and advocates for equitable tax policy recognize the value of these credits and are taking steps to reflect that in their state tax codes in the following ways: -
Steve Wamhoff
Federal Policy DirectorA 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. -
Matthew Gardner
Senior FellowFebruary 5, 2019
Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Taxes
The popular video streaming service Netflix posted its largest-ever U.S. profit in 2018—$845 million—on which it didn’t pay a dime in federal or state income taxes. In fact, the company reported a $22 million federal income tax rebate. -
Alan Essig
Executive DirectorFebruary 1, 2019
Senator Sanders Proposes to Reform the Estate Tax
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. -
Gubernatorial addresses and the prospect of teacher strikes continued to take center stage in state fiscal news this week, as governors of Connecticut, Maryland, and Utah gave speeches that all included significant tax proposals. Meanwhile, teachers walked out in Virginia, and many other states debated school funding increases to avoid similar results. State policymakers have many other debates on their hands as well, including what to do with online sales tax revenue, how to cut property taxes without undermining schools, whether and how to legalize and tax cannabis, and whether to update gas taxes for infrastructure investments.
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Watch the video recording below for discussion on how ITEP’s distributional data can be part of an advocacy and communications strategy for securing state tax policies that raise enough revenue to fund various priorities. Outline includes a brief overview of findings from the sixth edition of Who Pays? A Distributional Analysis of the Tax Systems in All 50 States as well as insight from state advocates who use Who Pays? and other tax policy analyses research to pursue their legislative agendas.
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Jenice R. Robinson
Communications DirectorIt was the tone-deaf remark heard ‘round the world. Last week on CNBC’s Squawk Box, Commerce Secretary Wilbur Ross suggested that furloughed government employees who hadn’t been paid in a month could go to a bank and get a loan to make ends meet. This was not a gaffe. It’s hard to fathom how a […] -
This week, as Americans in every state celebrated Martin Luther King Jr. Day and reflected on his dream of peaceful protest and racial and economic justice, many eyes were on the teachers’ strike pressing for parts of this dream amid the “curvaceous slopes of California.” Governors and lawmakers in many states—including Arizona, Georgia, Indiana, Louisiana, Nevada, New Mexico, South Carolina, and Wisconsin—discussed ways to raise pay for teachers and/or enhance education investments generally.
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Alan Essig
Executive DirectorJanuary 24, 2019
Yes, It’s Time to Talk about Progressive Taxes, Even a Wealth Tax
Earlier today, several news organizations reported that Sen. Elizabeth Warren is set to formally propose a federal wealth tax. Immediately after, social media was atwitter with comments that ranged from praise to predictable outcries of how will the wealthy cope if forced to pay more in taxes. -
Steve Wamhoff
Federal Policy DirectorWealth inequality is much greater than income inequality. The 1 percent of Americans with the highest incomes receive about a fifth of the total income in the United States. In contrast, the top 1 percent of wealth holders in the United States own 42 percent of the nation’s wealth, according to estimates from University of California at Berkley economists Emmanuel Saez and Gabriel Zucman. -
Carl Davis
Research DirectorThis year lawmakers in Connecticut, Delaware, Hawaii, Illinois, New Jersey, New York, Rhode Island, and Vermont will all be debating the taxation of recreational cannabis. A new ITEP report reviews the track record of recreational cannabis taxes thus far and offers recommendations for structuring cannabis taxes to achieve stable revenue growth over the long haul.
Blog Categories
- Corporate Taxes
- Earned Income Tax Credit
- Education Tax Breaks
- Federal Policy
- Fines and Fees
- Immigration
- Inequality and the Economy
- Local Income Taxes
- Local Policy
- Local Property Taxes
- Local Refundable Tax Credits
- Local Sales Taxes
- Maps
- Personal Income Taxes
- Property Taxes
- Refundable Tax Credits
- Sales, Gas and Excise Taxes
- SALT Deduction
- State Corporate Taxes
- State Policy
- Tax Analyses
- Tax Basics
- Tax Credits for Workers and Families
- Tax Reform Options and Challenges
- Taxing Wealth and Income from Wealth
- Trump Tax Policies
- Who Pays?