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Matthew Gardner
Senior FellowBy now, it should come as no shock that profitable Fortune 500 corporations are reaping huge benefits from the corporate tax cuts enacted last December. But as first quarter earnings reports are released, we’re learning just how big. -
Aidan Davis
State Policy DirectorToday marks Day 4 of the Arizona teachers’ walkout. After decades of tax cuts and underfunding of public education, education advocates are now driving the debate and urging lawmakers to act. Their newest proposal would raise taxes on incomes above half a million dollars for married couples, or above $250,000 for single taxpayers—that is, the same wealthy taxpayers that just received a generous tax cuts under last year’s federal tax overhaul. -
One of the most repeated myths in state tax policy is called “millionaire tax flight,” where millionaires are allegedly fleeing states with high income tax rates for states with lower rates. This myth has been used as an argument in state tax debates for years but Cristobal Young argues in his book, “The Myth of the Millionaire Tax Flight,” that both Democrats and Republicans are “searching for a crisis that does not really exist,” and that there is no evidence to support this myth.
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This Arbor Day week, the seeds of discontent with underfunded school systems and underpaid teachers continued to spread, with walkouts occurring in both Arizona and Colorado. And recognizing the need to see the forest as well as the trees, the Arizona teachers have presented revenue solutions to get to the true root of the problem. In the plains states, tax cut proposals continue to pop up like weeds in Kansas and threaten to spread to Iowa and Missouri, where lawmakers are running out of time but are still hoping their efforts to pass destructive tax cuts will bear fruit.
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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.
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Matthew Gardner
Senior FellowIn reports released over the past week, covering the first three months of 2018, a few of the biggest and most profitable Fortune 500 corporations acknowledge receiving billions in tax cuts in the first quarter of 2018 alone. Fifteen of these companies collectively disclosed reducing their effective tax rates by $6.2 billion compared to the rates they faced in the first quarter of last year. -
This week the IRS website asked some would-be tax filers to return after December 31, 9999. State legislators don't have quite that much time, but are struggling to wrap up their tax debates on schedule as well. Iowa legislators, for example, are ironically still debating tax cuts despite having run out of money to cover their daily expenses for the year. Nebraska's session wrapped up, but its tax debate continues in the form of a call for a special session and the threat of an unfunded tax cut going before voters in November. Mississippi's tax debate has been revived by emergency bridge closings. Kentucky's session went down to the wire as lawmakers overrode vetoes to push through a tax increase to help fund teacher salaries that raises taxes on most taxpayers while cutting them for the richest 5 percent tax. And lawmakers in Arizona and Colorado may need to stay after school to resolve teacher pay issues.
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Misha Hill
Policy AnalystWe're highlighting the progress of a few newer trends in consumption taxation. This includes using the tax code to discourage consumption of everything from plastic bags to carbon and collecting revenue from emerging industries like ride sharing services and legalized cannabis sales. -
Steve Wamhoff
Federal Policy DirectorPresident 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. -
Richard Phillips
Senior Policy AnalystThe HBO television show Last Week Tonight with John Oliver has become known for its longer segments that examine important issues facing the country. In its latest segment on Sunday, the show took a deep dive into corporate taxes and how many companies manage to avoid paying their fair share. Between its hilarious interludes, the segment painted a striking portrait of problems in our corporate tax code and how the Tax Cuts and Jobs Act (TCJA) failed to address them. -
This Friday the 13th is a spooky one for many state lawmakers, as past bad fiscal decisions have been coming back to haunt them in the form of teacher strikes and walk-outs in Arizona, Kentucky, and Oklahoma. Meanwhile, policymakers in Maryland, Nebraska, New Jersey, Oregon, and Utah all attempted to exorcise negative consequences of the federal tax-cut bill from their tax codes. And our What We're Reading section includes yet another stake to the heart of the millionaire tax-flight myth and other good reads.
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Carl Davis
Research DirectorApril 11, 2018
ITEP Resources on Amazon and the Online Sales Tax Debate
The U.S. Supreme Court is scheduled to consider a case next week (South Dakota v. Wayfair, Inc.) that has the potential to significantly improve states and localities’ ability to enforce their sales tax laws on Internet purchases. -
Carl Davis
Research DirectorOnline shopping is hardly a new phenomenon. And yet states and localities still lack the authority to require many Internet retailers to collect the sales taxes that their locally based, brick and mortar competitors have been collecting for decades. -
As Speaker of the House, Rep. Paul Ryan pushed through the Tax Cuts and Jobs Act that will cost at least $1.5 trillion and provide around half of its benefits to the richest five percent of households. He then announced that Congress needs to cut entitlements to get the budget deficit under control. Before becoming Speaker, Ryan spent several years running the Budget Committee and the Ways and Means Committee, where he issued budget and tax plans each year to carry out his goals (lower taxes for the rich and cuts in entitlement spending), which are described in the reports below.
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Steve Wamhoff
Federal Policy DirectorA 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. -
Carl Davis
Research DirectorIn recent weeks, President Trump has been raking Amazon over the coals for failing to collect state and local sales taxes on many of the company’s sales—a criticism that has some merit. But a new story first reported by James Kosur at RedStateDisaster, and then picked up today by the Wall Street Journal, provides fascinating insight into the sales tax collection habits of the Trump Organization’s “official retail website,” TrumpStore.com. -
This week, Kentucky legislators passed a bill shifting taxes onto low- and middle-income families, Oklahoma legislators reached a deal on education funding, and their counterparts in Kansas proffered multiple proposals for their education funding needs. Meanwhile, tax debates are coming down to the wire in Iowa, Missouri, and Nebraska, and responses to the federal tax-cut bill were settled on in Maryland, New York, and Wisconsin.
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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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Lisa Christensen Gee
Director of Special InitiativesWhile a lot of tax activities in the states this year have focused on figuring out the impact of federal tax changes on states' bottom lines and residents, there also have been unrelated efforts to cut state taxes or shift from personal income taxes to more regressive sales taxes. -
The Amazon HQ2 project would be the biggest in U.S. history as measured in projected jobs, yet little is known about the incentives cities have offered Amazon to lure its second headquarters. This lack of disclosure prevents public participation in the deal, including raising important questions about whether tax incentives that cities are offering are in the best short- and long-term interest of their residents. This is the main finding of Public Auction, Private Dealings: Will Amazon’s HQ2 Veer to Secrecy Create A Missed Opportunity for Inclusive, Accountable Development?, a Good Jobs First study released today.
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Meg Wiehe
Deputy Executive DirectorAs other researchers as well as journalists have noted, teachers striking or threatening to strike over low wages and overall lack of investment isn’t simply a narrative about schools and public workers’ pay. It is illustrative of a broader conflict over tax laws and how states and local jurisdictions fund critical public services that range from K-12 education, public safety, roads and bridges, health care, parks, to higher education. -
ITEP Staff
March 30, 2018
Amazon’s Local, State and Federal Tax Issues Explained
President Trump’s latest Twitter target, the Amazon Corporation, is now under the microscope for its state and local tax avoidance. In a Thursday tweet, the President claimed that “[u]nlike others, they pay little or no taxes to state & local governments.” Such a statement is a startling reversal for a president who previously said his own ability to avoid paying income taxes “makes me smart.” -
This week, after the recent teacher strike in West Virginia, teacher pay crises brought on by years of irresponsible tax cuts also made headlines in Arizona and Oklahoma. Maine and New York lawmakers continue to hash out how they will respond to the federal tax bill. And their counterparts in Missouri and Nebraska attempt to push forward their tax cutting agendas.
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Aidan Davis
State Policy DirectorThis has been a big year for state action on tax credits that support low-and moderate-income workers and families. And this makes sense given the bad hand low- and middle-income families were dealt under the recent Trump-GOP tax law, which provides most of its benefits to high-income households and wealthy investors. Many proposed changes are part of states’ broader reaction to the impact of the new federal law on state tax systems. Unfortunately, some of those proposals left much to be desired. -
Carl Davis
Research DirectorA new ITEP analysis reveals that in seven states (Alabama, Alaska, Idaho, Iowa, Mississippi, New Mexico, and Pennsylvania), the nation’s largest e-retailer, Amazon.com, is either not collecting local-level sales taxes or is charging a lower tax rate than local retailers. In other states, such as Colorado and Illinois, Amazon is collecting local tax because it has an in-state presence, but localities cannot collect taxes from other e-retailers based outside the state.
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