Institute on Taxation and Economic Policy

ITEP Work in Action

MassBudget: 14 Options for Raising Progressive Revenue

January 14, 2019

People in Massachusetts seek to live in communities that provide a high quality of life for their family and neighbors. We value good schools, police and fire protection, libraries and parks, smooth roads and reliable transit, and supports to help families struggling through tough times. A community’s day-to-day well-being and its long-term prosperity are built […]

Policy Matters Ohio: New Research Underlines Need to Overhaul State Tax Code

January 11, 2019

Ohio’s upside-down tax system takes an especially heavy toll on black and Latino residents. That’s the finding of new research from the Institute on Taxation & Economic Policy (ITEP), a national nonprofit research group with a sophisticated model of the tax system, that was released today by Policy Matters Ohio. Read more

Arizona Center for Economic Progress: Wrong Priorities: It Doesn’t Make Sense to Give a Tax Cut to the Rich While Arizona Asks Children in Public Schools to Wait

January 2, 2019

Arizona stands to gain $130 million to $230 million in General Fund revenues if it conforms the Arizona tax code to the federal tax changes enacted in 2017. Rather than directing those additional revenues to better prepare for the next economic downturn or toward increased investments in our public schools, SB1143 and HB2522 will direct […]

Economic Progress Institute: Rhode Island Standard of Need

December 20, 2018

The RISN calculates a household budget for families with two young children, and for single adults. The no-frills budget includes the costs of housing, food, transportation, health care, child care and other necessities including clothing, toiletries and telephone service. The RISN also demonstrates how work supports like food assistance, tax credits, and child care and health care subsidies help close the gap between income and basic need expenses. By taking all of these factors into account, the RISN provides a more realistic measure of the economic security of Rhode Islanders than the federal poverty level.

Voices for Utah Children: Response to Govenor’s Budget Recommendations FY2020

December 17, 2018

As a percent of income, 95% of Utah’s families pay more in sales and other local taxes than the top 5% of higher income families.

Georgia Budget & Policy Institute: Increase the State Tobacco Tax for Healthier Georgia

December 15, 2018

Georgia could raise more than $400 million a year to make critical investments for the health and well-being of Georgia residents by raising the cigarette tax by at least $1 per pack. Georgia has the third-lowest state cigarette tax rate out of the 50 states and the District of Columbia. At 37 cents per pack, it falls far below the national average of $1.72. Over the past decade, many states have increased tobacco tax rates as a way to raise new revenue while reducing smoking rates and the health care costs associated with smoking. Georgia has not increased its cigarette…

New Mexico Voices for Children: The Cliff Effect: One Step Forward, Two Steps Back

November 29, 2018

This report focuses on the cliff effect that occurs with the loss of child care assistance for New Mexico families. Losing child care assistance is especially detrimental to families because the cost of child care is so high. High-quality child care costs more than tuition and fees at New Mexico’s 4-year public universities, so it is an expense that even middle-income families struggle to meet. This report looks at the intensity of the child care cliff effect in New Mexico, as well as problems with income eligibility ceilings and co-pays, and offers policy solutions to these problems.

Public Assets Institute: A Fairer Tax System Would Help Working Families

November 29, 2018

The report looks at how well states distribute taxes based on family incomes. In most states lower-income families pay a higher percentage of their income in state and local taxes than those at the top. That’s the definition of a regressive tax system. Vermont’s is one of the least regressive in the country.

The EITC Boosts Opportunities for Communities of Color

November 28, 2018

State and local taxes play an important role in shaping economic opportunity. These tax revenues pay for the schools, roads, parks, and libraries that create a foundation for thriving communities. Yet we know that Virginia’s state and local tax system is upside down. In Virginia, households with low and modest incomes pay a higher share of their incomes toward state and local taxes than the highest-income households. In tax policy terms, this is known as a regressive system. And since historical and present-day barriers for communities of color have resulted in stark differences in income by race, this means these…

Voices for Illinois Children November Newsletter

November 21, 2018

The Institute for Taxation and Economic Policy (ITEP) released the sixth edition of its “Who Pays?” report on state tax systems. Voices’ policy analyst John Gordon detailed the findings of the report in a blog post. Illinois ranks #8 among ITEP’s “Terrible Ten” in terms of regressive state tax systems.

Wisconsin Budget Project: Wisconsin’s Tax System Requires the Least from Those Who Have the Most

November 21, 2018

Wisconsin residents with the lowest incomes pay about a third more of their income in state and local taxes than the wealthiest residents, according to new figures from the Institute on Taxation and Economic Policy. The poorest 20% of Wisconsin residents—a group with an average income of $14,700—pays 10.1 cents out of every $1 of their income in state and local taxes on average. In comparison, the richest residents of Wisconsin, who have an average income of $1.2 million, pay just 7.7 cents out of every $1 in income in state and local taxes.

Advancing Racial Equity With State Tax Policy

November 16, 2018

States and localities could do more to help undo the harmful legacies of past racism and the damage caused by continuing racial bias and discrimination. If state budget and tax policies were better designed to address these harms and create more opportunities for people of color, state economies would be more equitable and likely also would be stronger, which in turn could benefit many state residents of all backgrounds.

The Governor’s Proposed Personal Income Tax Cut: Who Wins and Who Loses?

November 15, 2018

Governor Asa Hutchinson proposed a personal income tax cut as part of his balanced budget plan for the 2019 legislative session, released on November 14.

Oregon Center for Public Policy: Oregon Can Raise $376 Million by Clamping Down on Offshore Corporate Tax Avoidance

November 15, 2018

Oregon can clamp down on multinational corporations shifting profits overseas, create a more level playing field for Oregon businesses, and raise millions in revenue by enacting “complete reporting” by large corporations. That law would make it difficult for multinational corporations to avoid Oregon corporate income taxes by artificially shifting profits earned in Oregon to subsidiaries located abroad.

Louisiana Budget Project: Tax Code Is Holding Louisiana Back

November 15, 2018

Years of efforts to reform Louisiana’s regressive and overly complicated tax code have run aground in the state Legislature. The result: Louisianans pay the second-highest sales taxes in the nation, while the tax code is riddled with costly exemptions and deductions. The state’s broken tax structure is a major reason why the state lurched from budget crisis to budget crisis over the last decade and has struggled to fund critical programs and services like higher education and health care. The Advocate’s editorial board shares its thoughts on the latest report from the Institute on Taxation and Economic Policy. 

Tax Proposals Target Benefits to Those at the Top, Corporations

November 12, 2018

The Arkansas Legislative Tax Reform and Relief Task Force’s recommendations would make the state’s tax system even more regressive than it already is. According to a new analysis by Arkansas Advocates for Children and Families and the Institute on Tax and Economic Policy, the net overall impact of the combined recommendations would actually raise taxes on the neediest Arkansans. At the same time, it would target a bigger share of the decrease to those with the highest incomes.

Louisiana Budget Project: Race Equity and Taxes in Louisiana

November 9, 2018

Louisiana’s upside-down tax structure means the highest income-earners pay less than the poorest families, when measured as a percentage of income. The Institute on Taxation and Economic Policy’s  “Who Pays” report lays this out in careful detail, and the latest edition breaks down the tax distribution by race. The conclusion: Black households pay a higher percentage of their income in state and local taxes than white households. Louisiana has work to do to make the tax structure fairer and reduce racial inequalities.

Louisiana Budget Project: Louisiana’s Regressive Tax Structure

November 5, 2018

Poor and middle-income families in Louisiana pay state and local taxes at a higher rate than the wealthiest families. That’s the key takeaway from the latest state-by-state breakdown of tax distribution by income groups from the Institute on Taxation and Economic Policy (ITEP). Louisiana’s tax structure is the 14th most regressive in the nation.

Idaho Press: Economic Study Finds That Poor Idahoans Pay More State and Local Taxes Than Rich Ones

November 3, 2018

The biggest drivers of the inequality in Idaho are the sales and property taxes. In every bracket of income measured by the Institute’s report, the amount that families paid in state and excise taxes went down as their total income increased. The lowest-earning 20 percent spent twice as much of their annual income on property taxes as the highest 20 percent, with an average of 3.3 percent paid on their property compared to 1.6 percent.

The New Orleans Advocate: James Gill: Louisiana’s Tax System Isn’t the Most Unfair in the Nation, But It’s not for Lack of Trying

November 3, 2018

According to a study just released by the Institute on Taxation and Economic Policy in Washington, Washington State sets the regressive standard, while we rank 14th. If your income is $17,100 or less in Louisiana, you'll pay 11.9 percent of it in taxes. That number shrinks the further you go up on the income scale and is roughly halved by the time you reach fat-cat territory. Sales and excise taxes take 9.2 percent from the poorest, and 1.2 percent from the richest.

Kansas Center for Economic Growth: Kansans of Color Often Pay More Than Their Fair Share of Taxes

November 2, 2018

Kansans believe in fairness. However, a recent study by the Institute on Taxation and Economic Policy (ITEP) and the Kansas Center for Economic Growth finds that the lowest-income Kansans are contributing a higher share of their income to fund our priorities. Without an equitable tax structure, we will struggle to make necessary investments in great […]

New Mexico Voices for Children: The Next Governor Should Improve Our Tax System and Increase Wages

November 2, 2018

When it comes to fairness, New Mexico’s tax system is backwards. Those who earn the smallest incomes pay the highest rates in state and local taxes, according to a new report from the Institute on Taxation and Economic Policy. The responsibility for taxes should not fall hardest on those with the least ability to pay, but it does. There are several ways we can make our tax system fairer.

Oregon Center for Public Policy: It’s Time to Fix Oregon’s Regressive Tax Structure

November 2, 2018

Oregon’s poorest families pay more in taxes as a share of income than any group of taxpayers in the state, while the richest Oregonians pay the smallest share of any group. That is the conclusion of a new report by the Washington, D.C.-based Institute on Taxation and Economic Policy (ITEP).

Cherokee Tribune & Ledger-News: Financial Watchdog: Pritzker’s Spending Promises Would Raise Taxes on Middle Class

November 1, 2018

The Institute on Taxation and Economic Policy says Illinois has one of the most regressive taxes in the nation, largely due to its flat income tax. In its annual “Who pays?” report, the institute said the poorest 20 percent of Illinois households pay 14 percent of their income in taxes because of the flat tax in addition to high sales and property taxes.

Common Dreams: Time for a Tax on Billionaire Wealth Dynasties

October 30, 2018

The public should also rally to levy a modest tax on wealth over $20 million. A direct tax on wealth paid by the wealthiest one tenth of one percent could generate significant revenue to be reinvested in creating and restoring opportunities for low wealth households to prosper. A 1 percent annual tax on the wealthiest 0.1 percent of households, those with wealth over $20 million, would generate an estimated $1.899 trillion in revenue over the next decade, according to a forthcoming report from the Institute on Taxation and Economic Policy.

Advocates and policymakers at the state and federal levels rely on ITEP’s analytic capabilities to inform their debates on proposed tax policy changes. In any given year, ITEP fields requests for analyses of policies in 25 or more states. ITEP also works with national partners to provide analyses of federal tax policy proposals. This section highlights reports that use ITEP analyses to make a compelling case for progressive tax reforms.