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How Opportunity Zones Benefit Investors and Promote Displacement
• By ITEP Staff
The idea behind the new tax break is to provide an incentive for wealthy individuals to invest in the economies of struggling communities. Despite alleged intentions, it appears opportunity zones are turning into yet another windfall for wealthy investors and may encourage displacement of people in low-income areas, working against the provision’s intended goal.
Insult to Injury: Why Tax Cuts 2.0 Makes No Sense
• By ITEP Staff
In this illustrated breakdown of the Tax Cuts and Jobs Act (TCJA) and Tax Cuts 2.0, ITEP staff examine TCJA's role in growing income inequality, broken promises from corporations pledging to invest tax savings into workers and wages, and the embarrassment of riches flowing to the wealthiest Americans as a result of these “middle-class tax cuts.”
State Rundown 8/8: States Setting Rules for Upcoming Tax Decisions
• By ITEP Staff
August is often a season for states to define the parameters of tax debates to come, and that is true this week in several states: a tax task force in Arkansas is nearing its final recommendations; residents of Missouri, Montana, and North Carolina await results of court challenges that will decide whether tax measures will show up on their ballots this fall; and Michigan and South Dakota are taking different approaches to making sure they’re…
Updating Sales and Excise Taxes to Reflect Today’s Economy
• By ITEP Staff
Consumers’ growing interest in online shopping and “gig economy” services like Uber and Airbnb has forced states and localities to revisit their sales taxes, for instance. Meanwhile new evidence on the dangers and causes of obesity has led to rising interest in soda taxes, but the soda industry is fighting back. Carbon taxes are being discussed as a tool for combatting climate change. And changing attitudes toward cannabis use have spurred some states to move…
State Rundown 8/1: States Stay Busy During Summer “Break”
• By ITEP Staff
Although most state legislatures are out of session during the summer, the pursuit of better fiscal policy has no "off-season." Here at ITEP, we've been revamping the State Rundown to bring you your favorite summary of state budget and tax news in the new-and-improved format you see here. Meanwhile, leaders in Massachusetts and New Jersey have been hard at work in recent weeks and are already looking ahead their next round of budget and tax…
The Preferential Tax Treatment of Capital Gains Income Should Be Curbed, Not Substantially Expanded
• By Richard Phillips
For true believers in supply-side economics, however, one major flaw of the TCJA is that it did not further cut taxes for the wealthy by reducing capital gains tax rates. But now the Trump Administration is considering using executive action to remedy this by indexing capital gains to inflation for tax purposes.
The Fight for Education Funding: State Revenue Needs and Responses in 2018
• By Aidan Davis
States’ need for revenue and increased investment in key public services is not unique to this legislative session. But the extent of disinvestment—particularly in education—has been a driving force behind policy discussion and state legislative action this year. In many cases ill-advised tax cuts coupled with persistent school funding cuts led states to this common fate, initiating a powerful and growing trend. Here’s how lawmakers in a handful of state responded:
State Rundown 7/19: Wayfair Fallout and Ballot Preparation Dominate State Tax Talk
• By ITEP Staff
In the wake of the U.S. Supreme Court's recent Wayfair decision authorizing states to collect taxes owed on online sales, Utah lawmakers held a one-day special session that included (among other tax topics) legislation to ensure the state will be ready to collect those taxes, and a Nebraska lawmaker began pushing for a special session for the same reason. Voters in Colorado and Montana got more clarity on tax-related items they'll see on the ballot…
How to Fix the Broken International Corporate Tax Code
• By Richard Phillips
How should lawmakers fix the system? A new ITEP report breaks down how the international corporate tax code under the TCJA works, and how lawmakers can fix it. The report lays out three key principles for reform: equalize the rates, eliminate inversions, and create transparency.
18 States Will Take Holidays from Sound Tax Policy This Year
• By Dylan Grundman O'Neill
State sales tax holidays, our newly updated policy brief shows, are the equivalent of the bad kind of holiday vacation: tax policy that sounds nice at first but ultimately cuts corners, wastes money, precludes better options, and leaves states worse off than they would be without them. Unfortunately, while several states have wised up about sales tax holidays in recent years, 18 states will fall for the superficial attraction of these tax policy gimmicks in…
The Immediate Economic Impact of the Tax Cuts and Jobs Act Could be Even Less Than Expected
• By Richard Phillips
Now, new research from the Federal Reserve Bank of San Francisco finds that the Tax Cuts and Jobs Act may not be so much of a stimulus after all. In other words, lawmakers have left themselves with few options should the country face an economic recession, and the country may not receive a substantive economic benefit in the short term.
Building on Momentum from Recent Years, 2018 Delivers Strengthened Tax Credits for Workers and Families
• By Aidan Davis
Despite some challenging tax policy debates, a number of which hinged on states’ responses to federal conformity, 2018 brought some positive developments for workers and their families. This post updates a mid-session trends piece on this very subject. Here’s what we have been following:
State Rundown 7/10: Budget Brinksmanship and Ballot Battles
• By ITEP Staff
New Jersey avoided a second consecutive shutdown and proved that even against staunch opposition, progressive solutions to states' fiscal issues are attainable, and Arizona voters will likely have a chance to solve their education funding crisis in a similar way. Budget and tax debates remain to be resolved, however, in Maine and Massachusetts. Meanwhile, voters are gaining a clearer picture of what questions they will be asked on ballots this fall as signature drives conclude…
An Update on State Responses to the Federal Tax Bill
• By Dylan Grundman O'Neill
With many state fiscal years beginning July 1, most states that will make decisions this year about federal tax conformity have now done so, so it is now time for an update on how well state policymakers have kept to, or veered from, the path we charted out earlier this year. Most states that have enacted laws in response to the federal changes have adhered to some but not all of the principles we laid…
ITEP Summer Reading (and Listening) List
• By ITEP Staff
Ah, summertime – a season synonymous with sunshine, backyard barbecues and mercury rising. Outside of our day jobs analyzing tax policy, we occasionally take a break from our screens to reconnect with the written and spoken word. However you enjoy your summer downtime – visiting your childhood home, lounging at the lake, planning the ultimate […]
State Rundown 6/28: Budget Deals Reached in Nick of Time
• By ITEP Staff
This week, lawmakers in Louisiana, Pennsylvania, Rhode Island, Vermont, and the District of Columbia wrapped up their budgets in time for the new fiscal year that starts July first in most states, with some of these resolutions coming after contentious debates and repeated special sessions. New Jersey's debate is not yet finished as leaders clash over spending priorities and the taxes on millionaires and corporations needed to fund them. Meanwhile, signature drives to put tax-related…
Rigging the System and Poor Shaming (Rightly) Are Incompatible Political Strategies
• By Jenice R. Robinson
The absurdity of blaming poor and moderate-income people for their circumstances is close to running its course as an effective political tool, particularly as some elected officials more boldly assert their intent to cater to the whims of the wealthy. Take last year’s GOP-led drive to eliminate the Affordable Care Act (ACA), for example. House […]
Gas Taxes Rise in Seven States, Including an Historic Increase in Oklahoma
• By Carl Davis
A rare sight is coming to Oklahoma. The last time the Sooner State raised its gas tax rate, the Berlin Wall was still standing, and Congress was debating whether to ban smoking on flights shorter than two hours. Fast forward 31 years, and Oklahoma is finally at it again. On Sunday, the state’s gas tax rate will rise by 3 cents and its diesel tax rate by 6 cents. Both taxes will now stand at…
What’s at Stake in South Carolina’s Upcoming Tax Conformity Debate
• By Dylan Grundman O'Neill
South Carolina legislators will return next week to try to finalize a few issues before the end of their session and fiscal year on June 30th, including the question of how to respond to the federal Tax Cuts and Jobs Act (TCJA). That's a short timeframe with some important questions at stake, and some misinformation has been spread, so here's a quick guide to the facts, issues, and options.
State Rundown 6/21: Wayfair Decision Is Way Fair
• By ITEP Staff
The U.S. Supreme Court made big news this morning by allowing states to collect taxes due on internet purchases, which will help put main-street and online retailers on an even playing field while also improving state and local revenues and the long-term viability of the sales tax as a revenue source. Many states remain focused on more local issues, however, as Louisiana's third special session of the year kicked off, Massachusetts won a living wage…
Supreme Court Decision in Wayfair Is a Leap Forward for Sales Tax Modernization
• By Carl Davis
For years, state and local governments have been dealing with a tax enforcement nightmare as out-of-state Internet retailers have refused to collect sales tax. That non-collection was facilitated by a Supreme Court precedent that tax collection can only be required when a retailer has a “physical presence” inside of a state. In today’s ruling in […]
State Rundown 6/13: Budget Crunch Time Sets in as State Fiscal Years Come to Close
• By ITEP Staff
With many state fiscal years ending June 30th, budget negotiations were completed recently in California, Illinois, Michigan, and North Carolina. New Jersey remains a state to watch as a government shutdown looms but leaders continue to disagree about a proposed millionaires tax, corporate taxes, and school funding. In other states looking to wealthy individuals and large corporations for needed revenues, Arizona's teacher pay crisis could be solved with a tax on its highest-income residents and…
All Bets are Off: State-Sponsored Sports Betting Isn’t Worth the Risk
• By Misha Hill
Many state legislators and regulators are considering expanding state-sponsored gambling by allowing betting on major league sports games. But the revenue states could bring in isn’t worth the risk.
New Legislation Would Close Significant Offshore Loopholes in the Tax Cuts and Jobs Act
• By Richard Phillips
One simple rule should drive the nation’s international tax policies: tax the offshore profits of American companies the same way their domestic profits are taxed. The latest legislation to approach that ideal is the Per-Country Minimum Act (H.R. 6015), from Rep. Peter DeFazio (D-OR). The DeFazio bill closes the loophole that allows corporations to use foreign tax credits to shelter profits in tax havens from U.S. taxes. No other bill addresses this.
State Rundown 6/1: Time Is Ripe for Closer Look at Intergovernmental Relations
• By ITEP Staff
This week, Virginia lawmakers overcame their budget impasse and approved an expansion of Medicaid, North Carolina's behind closed doors budget debate appears to be wrapping up, and Vermont's special session continues in the wake of the governor's vetoes of the state budget and accompanying tax bills. New research highlighted in our What We're Reading section shows that both corporate income tax cuts and business tax subsidies contribute to wider economic inequality. And the possible reconstitution…
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