Blog
248 posts
Extending Federal EITC Enhancements Would Bolster the Effects of State-Level Credits
September 13, 2021 • By Aidan Davis
The EITC expansion targets workers without children in the home. In 2022 it would provide a $12.4 billion boost, benefiting 19.5 million workers who on average would receive an income boost of $730 dollars.
Frequently Asked Questions about Proposals to Repeal the Cap on Federal Tax Deductions for State and Local Taxes (SALT)
September 3, 2021 • By Carl Davis, ITEP Staff, Steve Wamhoff
Even though Democrats in Congress uniformly opposed the TCJA because its benefits went predominately to the rich, many Democratic lawmakers now want to give a tax cut to the rich by repealing the cap on SALT deductions.
Labor Day is around the corner and in the spirit of celebrating the achievements of workers around the country, we here at ITEP want to call attention to the states (and territories) that are using tax policy to support workers and residents alike...
New Report from ITEP Describes Options for Changing the SALT Cap without Repealing It
August 26, 2021 • By Steve Wamhoff
A new report from ITEP provides policy recommendations to modify the $10,000 cap on federal tax deductions for state and local taxes (SALT), which was signed into law by President Trump as part of the Tax Cuts and Jobs Act. Because the SALT cap mostly restricts tax deductions for the richest 5 percent of Americans, the best options are to leave the cap as is or replace […]
State Rundown 7/21: States Go for Tax Policy Gold This Olympics Season
July 21, 2021 • By ITEP Staff
It’s Olympics season! As countries around the globe battle for first place in a plethora of sports and contests it’s as good a time as any to look around America to see which states deserve a gold medal in the ‘Equitable Tax Policy’ event...
State Rundown 7/7: The New Fiscal Year Starts off With a Bang, And Not Just Fireworks
July 7, 2021 • By ITEP Staff
States were busy over the past week despite the Fourth of July holiday. Many are gearing up for upcoming tax and budget clashes that could shape their futures for some time...
A growing group of state lawmakers are recognizing the extent to which low- and middle-income Americans are struggling and the ways in which their state and local tax systems can do more to ensure the economic security of their residents over the long run. To that end, lawmakers across the country have made strides in enacting, increasing, or expanding tax credits that benefit low- and middle-income families. Here is a summary of those changes and a celebration of those successes.
State Rundown 6/24: Late June State Fiscal Debates Unusually Active
June 24, 2021 • By ITEP Staff
Delayed legislative sessions and protracted federal aid debates have made for a busier June than normal for state fiscal debates. Arizona, New Hampshire, and North Carolina legislators, for example, are still pushing for expensive and regressive tax cuts in their states while they remain in session...
Take a minute on this Tax Day to reflect on all that you survived, accomplished, and contributed to the collective good this past year, and be proud. There is always more work to be done to build the communities we desire, and paying your share is what allows that work to continue.
State Rundown 5/13: States Get Federal Aid and Guidance as Many Sessions Wind Down
May 13, 2021 • By ITEP Staff
We had our noses buried in new American Rescue Plan guidance...when we heard the refreshing news that Missouri leaders are on the verge of modernizing their tax code, not only by becoming the final state to apply sales taxes to online purchases, but also by enacting an Earned Income Tax Credit (EITC)...Meanwhile, tax debates are also highly active in California, Colorado, Louisiana, Maine, and Nebraska. We also share some of our own reporting on recent efforts in Arizona and several other states to undermine voter-approved reforms and democratic institutions themselves.
Nearly 20 Million Will Benefit if Congress Makes the EITC Enhancement Permanent
May 13, 2021 • By Aidan Davis
Overall, the EITC enhancement would provide a $12.4 billion boost in 2022 if made permanent, benefiting 19.5 million workers. It would have a particularly meaningful impact on the bottom 20 percent of eligible households who would receive more than three-fourths of the total benefit. Forty-one percent of households in the bottom 20 percent of earners would benefit, receiving an average income boost of 6.3 percent, or $740 dollars.
Bold Progressive State Tax Victories Provide Bright Spots in Difficult Year
April 27, 2021 • By Dylan Grundman O'Neill
“Bold progressive victories” is probably not the first phrase that comes to mind when thinking about state laws enacted so far in 2021...But progressive advocates, lawmakers, and voters have won some tremendous victories in states recently...We should celebrate them for the achievements they are—and closely study them for lessons they can teach about how to bring about positive progressive change in these and other states.
Young workers are confronting a harsh economic reality filled with student loan debt and far too few good-paying jobs. The pandemic reinforced this group’s long history of not receiving proper benefits, such as health insurance, from their employers. They also are often overlooked when it comes to policies that promote economic wellbeing. The federal Earned Income Tax Credit (EITC), for example, is a glowing success story. It lifted 5.8 million people out of poverty in 2018, including 3 million children. But a key shortcoming of the federal EITC: working adults without children in the home receive little to no benefit.
SALT Cap Repeal Would Worsen Racial Income and Wealth Divides
April 20, 2021 • By Carl Davis, ITEP Staff, Jessica Schieder
A bipartisan group of 32 House lawmakers banded together to form the “SALT Caucus,” demanding elimination of the SALT cap. None of their arguments in favor of repeal change the fact that it would primarily benefit the rich and, according to new research, exacerbate racial income and wealth disparities.
State and Local Cannabis Tax Revenue Jumps 58%, Surpassing $3 Billion in 2020
March 15, 2021 • By Carl Davis
Cannabis taxes are a small part of state and local budgets, clocking in at less than 2 percent of tax revenue in the states with legal adult-use sales. But they’re also one of states’ fastest-growing revenue sources. Powered by an expanding legal market and a pandemic-driven boost in cannabis use, excise and sales taxes on […]
State Rundown 2/24: State Tax Debates Quickly Thaw Out with Warmer Weather
February 24, 2021 • By ITEP Staff
Warming temperatures in many parts of the country this week seem to be thawing out state fiscal debates as well. Multiple states including California, Colorado, Maryland, and New Jersey saw movement on efforts to improve tax credits for low- and middle-income families. Mississippi House lawmakers suddenly rushed through a dangerous bill to eliminate the state’s income tax and shift those taxes onto lower-income households. Montana senators also approved regressive income tax cuts and South Dakota legislators advanced an anti-tax constitutional amendment, while lawmakers in Hawaii, Rhode Island, and Washington made progress on improving the progressivity of their tax codes. Gas…
State Rundown 2/17: Friction Over Tax Policy Still Generating Heat in Some Statehouses
February 17, 2021 • By ITEP Staff
Cold-hearted regressive tax proposals were pushed this week to cut income taxes on high-income households in states including Idaho, Montana, and West Virginia, while advocates for fair taxes and well-funded services continue to turn up the heat on taxing the richest residents in states like Connecticut and Pennsylvania.
While the federal EITC provides a great deal of support for families with children, its impact is limited for those without children or who are not raising children in their homes. Childless workers under 25 and over 64 have for far too long received no benefit from the federal credit. And workers aged 25 to 64 have received very little value from the existing credit (the maximum credit is much smaller and the income limits more restrictive). The federal EITC’s meager benefits for just some childless adults lead to an inequitable outcome: the federal income tax system—which is ostensibly based…
Does New York’s Cannabis Tax Idea Offer a Glimpse of the Future?
February 9, 2021 • By Carl Davis
Taxing cannabis won’t end New York’s budget difficulties, but a potency tax could bring New York a more sustainable stream of cannabis tax revenue than we see in most states. It could also have significant benefits for cannabis consumers.
States Are Finally Going Bold with Progressive Tax Efforts
February 4, 2021 • By Dylan Grundman O'Neill
Advocates, lawmakers, study commissions, and even governors in some states are proposing bold tax policy reforms that look beyond pandemic-induced budget shortfalls and the “K-shaped recovery” to address underlying inequities and underfunding that gave rise to them. These efforts include proposals to: end or reverse regressive tax policies like the preferential treatment of income derived from wealth over income earned through work; restore or strengthen estate and inheritance taxes to slow the concentration of wealth in ever-fewer hands; raise revenue and slow inequality with progressive income taxes; and many other ideas to right upside-down tax codes while raising the revenue…
As states kick off their 2021 legislative sessions, it’s clear that many governors and lawmakers are attempting to “take a mulligan” on the last year and recycle tax-slashing ideas that were already bad in 2020 and are even worse now as states try to recover from the Covid-19 pandemic and accompanying downturn...On a brighter note, Illinois leaders showed they did learn from the events of 2020, passing a major criminal justice reform bill and payday loan protections intended to reduce racial inequities.
New Jersey lawmakers passed an innovative tax design that other states debating cannabis legalization should look to for inspiration. The state officially legalized cannabis in November when voters overwhelmingly approved a constitutional amendment by a margin of 67 to 33 percent. The amendment applied the state’s general sales tax to cannabis and allowed local governments to create their own taxes on the industry. The legislature added the most notable part of the tax structure last month with a Social Equity Excise Fee.
State Rundown 1/7: State Work Continues in Shadow of National Events
January 7, 2021 • By ITEP Staff
Though most people’s attention is rightly focused on events unfolding in the nation’s capital this week, state legislative debates are also underway or soon to begin in many states, including proposals to tax the rich in New York and Rhode Island, provide a boost to low-income families in California, and legalize and tax cannabis in Missouri and Rhode Island.
Ghosts of Fiscal Crunches Past, Present, Future Have Advice for State Lawmakers
December 21, 2020 • By Dylan Grundman O'Neill
State policymakers and advocates may face some long sleepless nights as they close the book on 2020 and prepare for the important decisions they’ll be making in 2021 and beyond. So we at ITEP have consulted with ghosts of fiscal crunches past, present, and future, and distilled their lessons into seven key things to keep in mind for 2021 tax and budget debates:
State Rundown 12/17: New and Old State Tax Debates Await in 2021
December 17, 2020 • By ITEP Staff
Our last Rundown of 2020 includes news of yet another misguided proposal to eliminate a state income tax, this time in Arkansas. Florida and Missouri, on the other hand, are looking to modernize their tax codes by becoming the last two states to enforce their own sales taxes on online retailers. Leaders in Maryland and Oregon, meanwhile, are working to decouple the state from unnecessary and regressive tax cuts included in the federal CARES Act. And Missouri and Nevada lawmakers both got updated estimates of the revenue shortfalls they will need to resolve when they convene in 2021. The Rundown…
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