Institute on Taxation and Economic Policy

ITEP Work in Action

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.

Voices for Illinois Children: Who Pays In Illinois? Mostly The Poor And Middle Class

October 29, 2018

A new report from the Institute of Taxation and Economic Policy (ITEP) shows the poorest 20 percent of Illinois households pay nearly twice as much in state and local taxes as the richest one percent. As a result, ITEP ranks Illinois as the eighth most regressive tax system in the country.

NJ Spotlight: GOP Leaders Call on NJ Democrats to Reconsider Middle-class Tax Cuts

October 29, 2018

The related tax-cut bills — and another that would shield most retirement-savings contributions from state income taxes — were introduced at the start of the year but have not been posted for votes by the Democratic leaders who control the Assembly’s agenda. Bucco suggested a report released earlier this month by the left-leaning Institute on Taxation and Economic Policy that found middle-income taxpayers in New Jersey pay a higher effective tax rate than any other group — including the top 1 percent of earners — as a reason to begin prioritizing adoption of the GOP bills.

California Budget & Policy Center: Last Year’s Federal Tax Law Exacerbates the Racial Wealth Gap

October 29, 2018

Much has been written about how the Tax Cuts and Jobs Act (TCJA), pushed by Republican leaders in Congress and signed into law by President Trump in December 2017, mostly benefits wealthy households while driving up the federal deficit by $1.9 trillion over the next 10 years. This growing deficit — already 17% higher in the federal fiscal year that ended on September 30 than in the previous year — threatens federal funding for critical investments and services that provide economic security and opportunity for low- and middle-income households.

Charleston Gazette-Mail: Statehouse Beat: Fake History on Teacher Strike Hard to Fathom

October 27, 2018

Speaking of the Senate, the nonpartisan Institute on Taxation and Economic Policy put out its annual “Who Pays” report on tax equity, which found the vast majority of states have tax systems that are inequitable, with lower- and middle-income families paying a larger percentage of income in taxes than upper-income families.It singled out the “Terrible 10” states with the most regressive tax systems, with the common denominator among those states being that they have no or very low income taxes, which they make up through having very high and broad-based sales taxes.

KUOW: A $40,000 Salary Is no Longer Middle Class in Washington State. Here’s Why.

October 26, 2018

Look what's happened to an income of $40,000. In 2015, the Institute on Taxation and Economic Policy (ITEP), based in Washington, D.C., looked at incomes in Washington state and found that a salary of $40,000 was still middle class. It was smack-dab in the middle of middle-earning incomes in the state. In 2018, ITEP looked again. This time, $40,000 had slipped a notch, to the second-lowest 20 percent of earners. The reason: More people in the state were making higher-end incomes.

The Olympian: Olympia Went to Court to Block an Income Tax Proposal. Two Years Later, It’s Backing Seattle’s Version.

October 26, 2018

In 2016, an Olympia household earning $25,000 a year paid about 13 percent of its income in state and local taxes, while a household earning $250,000 paid less than 4 percent, according to the resolution. A report this month from the Institute on Taxation and Economic Policy said Washington has the most regressive tax structure in the country, thanks to its lack of a personal income tax and comparatively high sales taxes.

Massachusetts Budget and Policy Center: Who Pays? Low and Middle Earners in Massachusetts Pay Larger Share of their Incomes in Taxes

October 25, 2018

Taxes are the main way communities pay for the things we do together. Taxes pay for essential programs and infrastructure we take for granted, like fire protection, public education, and health inspectors; roads, bridges, and public transit; and the support for people facing hard times. Examining how much people at different income levels pay in taxes is important when considering the fairness of tax policy.

Oregon Center for Public Policy: Measure 105 Would Set Oregon Back

October 25, 2018

Immigrants, regardless of their immigration status, give the economy a boost. In Marion County alone, undocumented immigrants pay more than $14 million in taxes every year to local and state authorities. Oregon is better for having immigrants, and will be better for it for generations to come. Read more here

News and Tribune: In Indiana and Illinois, Taxes Hit Low-earners Hard

October 25, 2018

TERRE HAUTE -- Low-earning residents of Indiana and Illinois pay a greater share of state and local taxes than those in all other Midwestern states, and those in most states nationally, according to a new study by a non-partisan think tank.

The Garden Island: Gap Keeps Growing Between Rich, Poor

October 25, 2018

The study finds that those in the bottom fifth of the income spectrum in Hawaii pay 15 percent of their income in state and local taxes, while those in the top 1 percent pay only 8.9 percent, “which exacerbates inequality in our state,” according to a press release about the study.

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.