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Steve Wamhoff
Federal Policy DirectorSenators Ron Johnson of Wisconsin and Steve Daines of Montana want the tax bill on the Senate floor to be amended to offer a more generous tax break for “pass-through” businesses. We have estimated how all the provisions in the tax bill would impact each income group under three possible scenarios. The only thing different in each scenario is the size of the deduction for pass-through income: 17.4 percent (the deduction in the bill as this is written), 20 percent and 27 percent. We find that the size of the pass-through break makes no difference for anyone who is not well off. -
Carl Davis
Research DirectorNovember 30, 2017
A Corporate Tax Cut Would Benefit Coastal Investors, Not the Heartland
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. -
Alan Essig
Executive DirectorGeorge Washington is said to have described the U.S. Senate as the body that cools the passions of an impulsive House of Representatives just as a saucer cools tea. But current Senate leaders appear to think of themselves as more of a Bunsen burner. -
Steve Wamhoff
Federal Policy DirectorOne of the findings is that every income group would face higher personal income taxes in years after 2025 (including 2027). Chained CPI would gradually push taxpayers into higher income tax brackets and make the standard deduction, the Earned Income Tax Credit, and several other breaks less generous over time. The switch to chained CPI would cause some low-income people to face a tax hike starting in 2019, the second year the plan would be in effect. -
November 29, 2017
State Rundown 11/29: Thanksgiving Leftovers Edition
The State Rundown is back from Thanksgiving break with a heaping helping of leftover state tax news, but beware, some of it may be rotten. -
Steve Wamhoff
Federal Policy DirectorOne of the more surprising findings of ITEP’s recent estimates on the Senate tax bill is that 19 states would pay more overall in federal taxes if the bill becomes law. This is not just an increase in the personal income taxes paid (which would happen in some states under the House bill). This is an increase in their net federal taxes overall, even including the assumed benefits of corporate tax cuts and estate tax cuts. -
Richard Phillips
Senior Policy AnalystNovember 21, 2017
The Senate Tax Plan’s Big Giveaway to Multinational Corporations
Instead of addressing the hundreds of billions in lost federal tax revenue due to offshore tax avoidance schemes, the Senate tax bill would forgive most of the taxes owed on these profits and open the floodgates to even more offshore profit-shifting in the future. -
November 21, 2017
Resources for Your Thanksgiving Dinner Tax Policy Debates
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. […] -
Jenice R. Robinson
Communications DirectorThe bottom line is that the rich and corporations are doing fine. We don’t need legislative solutions that fix non-existent problems. Only in a world of alternative facts does the top 0.2 percent of estates need to be exempt from the estate tax, for example. -
A year and a half after the release of the Panama Papers, a new set of data leaks, the Paradise Papersreleased by the International Consortium of Investigative Journalists (ICIJ) provides important new information on the tax dodging of wealthy individuals as well as multinational corporations. -
Carl Davis
Research DirectorAn 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. -
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 […] -
Carl Davis
Research DirectorIn 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. -
Internet sales tax fairness efforts gained momentum this week as most states joined together to encourage the US Supreme Court to allow them to collect taxes on online sales. Meanwhile, Montana lawmakers will enter special session next week to plug their revenue shortfall, Mississippi's (self-inflicted) revenue crunch is reaching unprecedented severity, and misguided corporate tax subsidies got mainstream attention from HBO's John Oliver and Rolling Stone.
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Richard Phillips
Senior Policy AnalystNovember 8, 2017
House Tax Plan Would Make Offshore Tax Avoidance Substantially Worse
The Sunday release of the Paradise Papers has once again brought the issue of offshore tax avoidance to the forefront of public discussion. The papers expose the complex structures that companies such as Apple and Nike have pursued in recent years to pay little to nothing in taxes on their offshore earnings. Yet even as these revelations make headlines, House Republicans are moving forward with major tax legislation, the Tax Cuts and Jobs Act, that would reward the worst tax avoiders and make it even easier for multinational companies to avoid taxes. -
Carl Davis
Research DirectorIn the tax policy framework released in September, President Trump and Congressional leadership insisted that their proposal would retain the tax incentive for donating to charity because doing so helps “accomplish important goals that strengthen civil society, as opposed to dependence on government.” Now that the House has released a more detailed proposal, it is finally possible to evaluate exactly how their plans would impact the incentive to donate to charity. -
Carl Davis
Research DirectorThroughout the ongoing federal tax debate, President Trump and Congressional leadership have insisted that while many tax deductions and credits would be wiped out, the mortgage interest deduction would be spared from the chopping block. But while the proposal recently unveiled by House leaders retains the mortgage interest deduction on paper, the actual substance of this policy would be nearly unrecognizable to today’s homeowners. -
Carl Davis
Research DirectorOne 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 the deductions for income and sales taxes. -
Carl Davis
Research DirectorIn recent days, news that House tax writers will not seek to cut the top personal income tax rate below 39.6 percent on taxable income above $1 million has led some to question whether the newest iteration of the Trump-GOP tax plan will provide a major windfall to the wealthy—a fact that has so far been widely understood. Unfortunately, this second-guessing is unnecessary. -
This week a "historic" but highly problematic budget agreement was finally reached in Connecticut, Michigan lawmakers banned localities from taxing any food or beverages, and Nebraska and North Dakota both got unpleasant news about future revenues. Also see our "what we're reading" section for news on 11 states that have run up long-term fiscal deficits since 2002 and the impacts of flooding on local tax bases.
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Carl Davis
Research DirectorOctober 31, 2017
Trump Administration Might Propose a Long-Overdue Gas Tax Increase
The Trump Administration is reportedly considering backing a 7-cent increase in the federal gas tax next year to pay for improvements in the nation's infrastructure. While most of the tax policy ideas coming from the administration in recent weeks would undermine the nation's ability to fund core public services, this one is a notable exception. -
Richard Phillips
Senior Policy AnalystOctober 30, 2017
The Manufacturing Deduction Is a Case Study in Tax Policy Gone Wrong
When you think of manufacturing, what comes to mind? According to the U.S. Congress, manufacturing may include things like the production of wrestling-rated films, assembling bouquets of flowers and even slicing cheesecake. These unusual definitions of manufacturing come from the domestic production activities deduction (better known as the manufacturing deduction), a tax break Congress created to encourage manufacturing in the United States. -
This week in state tax news saw Alaska begin yet another special session, Louisiana lawmakers holding meetings to begin preparing for the state’s looming (self-imposed) fiscal cliff, and Alabama policymakers beginning a study of school finance (in)adequacy and (in)equity. Meanwhile, state revenue performance is poor well into 2017 in many states, though Montana, Nevada, and Oregon are all enjoying modest but welcome revenue bumps from legalized marijuana.
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Steve Wamhoff
Federal Policy DirectorOctober 25, 2017
The Framework’s Tax Increases and Tax Cuts by State
As our report on the Trump-GOP tax framework explained, in nine states plus the District of Columbia, more than a fifth of households would pay higher taxes under the framework. -
Steve Wamhoff
Federal Policy DirectorThe Trump-GOP taxframework would reduce the top personal income tax rate from 39.6 percent to 35 percent, but now lawmakers are discussing keeping the top personal income tax rate at 39.6 percent for those with taxable income of more than $1 million. This modification would barely change the proposal’s overall impact.
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