Institute on Taxation and Economic Policy

ITEP Work in Action

CPPP: The Staggering Unfairness of Our State Tax System

October 19, 2018

Here’s one way to think about it: Families at the top of the income ladder receive 20 percent of all personal income in Texas, but pay only 8.5 percent of all state and local taxes. Families at the bottom of the scale receive only three percent of all income, but pay 5.7 percent of all taxes.

WVTF: Study: State Taxes Have Disproportionate Impact On Lower Income Virginians

October 19, 2018

Virginians who make the least amount of money pay 40 percent more taxes as a percent of their income than the wealthiest Virginians. That’s according to a new report from the Institute on Taxation and Economic Policy, which says Virginia’s tax code is upside down.

WOWK TV: Tax Issues in West Virginia

October 19, 2018

WOWK TV - Sean O'Leary, of the West Virginia Center on Budget and Policy, talks to Mark Curtis about a new report that shows there's room improve West Virginia's upside-down tax system.

FOX13 SLC: Middle Income Utahns Bear Brunt of State and Local Tax Burden

October 19, 2018

The Institute on Taxation and Economic Policy released a report showing how every state and the District of Columbia use tax policy in regressive and progressive ways. Their conclusion: all but five states and the District of Columbia have regressive systems, meaning they favor the wealthy over middle and/or low-income earners.

Eagle Pass Business Journal: Report: Low-Income Taxpayers Pay Most in Connecticut

October 19, 2018

The report, by the Institute on Taxation and Economic Policy and Connecticut Voices for Children, found the state’s lowest-income earners pay 41 percent more of their income in taxes than wealthier residents. According to Jamie Mills, director of fiscal policy and economic inclusion at Children’s Voices of Connecticut, taken as a whole the tax system in the Nutmeg State is upside down – because, as in many other states, the tax on personal income is only part of total tax revenue.

Florida Phoenix: New Study Says Florida Has the 3rd Most Unfair State and Local Tax System in US

October 19, 2018

Florida is the third largest state in the country, and according to a new report, has the third-most unfair state and local tax system in the U.S. That data comes from the Institute on Taxation and Economic Policy (ITEP), a nonpartisan, nonprofit tax policy organization.

New Hampshire Fiscal Policy Institute: Report Shows Higher Effective Tax Rates for Residents with Low Incomes

October 18, 2018

Most New Hampshire residents with lower incomes pay a higher percentage of the money they earn in state and local taxes than residents with higher incomes do. In a new report released yesterday, the Institute on Taxation and Economic Policy conducted evaluations of state and local government tax systems in each of the 50 states and modeled their impacts on non-elderly residents. The report concludes that 45 states have tax systems that ask a greater percentage of the incomes of those with low earnings than those with the highest incomes.

Kentucky Center for Economic Policy: New Report Shows Kentucky’s Tax System Worsens Income Inequality

October 18, 2018

In Kentucky, the income inequality that exists between our poorest and wealthiest residents is magnified by the structure of our tax system. And thanks to the new tax law enacted by the 2018 General Assembly, that problem is getting worse.

West Virginia Center on Budget & Policy: West Virginia’s Upside Down Tax System Grows Inequality

October 18, 2018

State and local tax systems can be effectively used to boost economic opportunity, create broadly shared prosperity and build equitable state economies. But in most states, including West Virginia, tax systems are upside down and are making inequality worse, as a new report from the Institute on Taxation and Economic Policy (ITEP) shows.

Seattle Met: Report: Washington State Taxes Are Still the Most Inequitable in the Country

October 18, 2018

In Washington state, the less money you make, the larger your percentage of income goes toward taxes. A study from the Institute on Taxation and Economic Policy released on Wednesday concludes that Washington state still has the most regressive taxes in the U.S., meaning the poorest households pay a disproportionate amount of taxes compared to the richest households in the state.

NJ Spotlight: New Jersey’s Tax System Ranked Among Fairest in the Country

October 18, 2018

A report on the fairness of state and local tax policy that was released yesterday by the Washington, D.C.-based Institute on Taxation and Economic Policy ranked New Jersey among the U.S. states with the most equitable tax systems. Read more

Message-Inquirer: Tax Study Explores ‘Who Pays?’ in Kentucky

October 18, 2018

A new study from a national economic policy research group suggests Kentucky’s tax structure has become less equitable since the last General Assembly's tax reform legislation, putting more tax obligation on poor and middle-class Kentuckians.

Providence Business Journal: Study Finds the Wealthy Pay a Lesser Share of Their Income Taxes in R.I.

October 18, 2018

The greater your income in Rhode Island, the less of it you pay in state and local taxes, a new study finds. The top one percent of Rhode Islanders [those making more than $467,700 a year] pay 7.9 percent of their income in total state and local taxes, while the bottom 20 percent [those earning less than $21,700 a year] pay 12.1 percent of their income in such taxes.

KRWG: Lowest-Income Taxpayers in NM Pay 1.8 Times the Tax Rate Paid by the Richest New Mexicans

October 18, 2018

Commentary: A new study released by the Institute on Taxation and Economic Policy (ITEP) finds that the lowest-income New Mexicans pay a state and local tax rate that is almost double what the state’s wealthiest residents pay as a share of their income.

Rutland Herald: In All Fairness

October 18, 2018

Anti-tax advocates across the country and in Vermont continue to push for policies that reduce tax rates for the wealthy and businesses, the report finds. However, a movement is growing in opposition to this agenda, as the public realizes that tax cuts for the wealthy and corporations mean less money to fund the things that benefit everyone: schools, parks and public spaces, infrastructure, public safety and other basic services.

NJ BIZ: Report: NJ’s Top Earners Pay Lower Tax Share Than Middle-Income Families

October 17, 2018

New Jersey’s top earners enjoy vastly more wealth than the majority of New Jersey residents but pay a much lower percentage of taxes than middle-income families in the state. That’s according to a nationwide analysis released Wednesday by New Jersey Policy Perspective and the Institution of Taxation and Economic Policy.

Big Island Now: STUDY: Hawai‘i’s Low-Income Taxpayers Carry 2nd Highest Tax Rate

October 17, 2018

The main cause of the heavy tax burden on those making the least in Hawaiʻi is the General Excise Tax (GET). Families in the lowest fifth spend 10.5% of their meager incomes on the GET, while the top 1% spend only 1.2% of their large earnings. In other words, those at the bottom spend 8.75 times more of their income on the GET than do those at the top.

DC Fiscal Policy Institute: Narrowing Income Inequality Through the Tax Code

October 17, 2018

DC’s tax system stands out in two key ways, according to a new analysis on how state tax policies affect families at different income levels. First, taxes on DC families living on very low incomes–below about $24,000 a year–are lower than in any state in the U.S. That good news is due primarily to income and property tax credits targeted to help residents working hard to make ends meet. But the analysis shows that families with incomes just above that level pay the same share of their income in DC taxes (income, sales, and property taxes) as the District’s wealthiest…

Maine Center for Economic Policy: Maine Still Has Work to Do in Building a Balanced and Adequate Tax Code

October 17, 2018

Building an inclusive economy requires tax policy that meets two conditions. The first is that those with the most are asked to pay more, or at the very least pay as great a share of their income in taxes as everyone else. The second is that enough shared resources are raised through the tax code to invest adequately in foundations of a strong economy including good schools, access to health care, and safe and modern infrastructure.

Iowa Fiscal Partnership: Tax Inequity: Iowa’s Continuing Story

October 17, 2018

Iowa taxes its middle- and low-income families more as a share of income than it does wealthy families, a long-term trend worsened by the 2018 tax overhaul. The latest “Who Pays” report by the Washington-based Institute on Taxation and Economic Policy (ITEP), again shows the effect of sales taxes and property taxes on lower-income households tilts Iowa’s overall tax system so the poorest pay the highest percentage in taxes.

New Mexico Voices for Children: New Analysis: Lowest-Income Taxpayers in NM Pay 1.8 Times the Tax Rate Paid by the Richest New Mexicans

October 17, 2018

“Taxes are the way we accomplish great things for our state – build our schools and infrastructure, provide health care and public safety, and more,” said James Jimenez, executive director of New Mexico Voices for Children, which partnered with ITEP on the report release. “These systems and services underpin our economy and improve our quality of life. We all need to do our part to support them, but our current state tax system ensures that those who can afford to pay the most actually pay the least.”

Michigan League for Public Policy: News Flash: Michigan Taxes Are Still Upside-Down

October 17, 2018

While no news is often regarded as good news, in this case, it’s not. Michigan’s tax structure is still highly regressive, and taxes Michiganders with low incomes at a higher rate than Michigan’s wealthiest residents, according to a report by the Institute on Taxation and Economic Policy.

Oregon Center for Public Policy: Oregon Taxes Fall Hardest on Those Who Earn the Least

October 17, 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).

Arkansas Advocates for Children and Families: Arkansas Tax System Worsens Economic Inequality

October 17, 2018

Another key driver of inequality in Arkansas’s tax system is the preferential treatment given to capital gains income. Currently, half of all capital gains income is exempted, or ignored, from income taxes even though nearly no one makes a significant share of their income through capital gains (except for the top 1 percent). According to a report from the Congressional Budget Office, capital gains make up 38 percent of the income of the richest 1 percent of households in this country, compared to just 5 percent of the income for the poorest households.

Minnesota Budget Project: Minnesota Ranks High for Tax Fairness in 50-State Study

October 17, 2018

In an era of income inequality and growing concentration of wealth, a new 50-state study released today analyzes whether state tax systems make income inequality better or worse. The Institute on Taxation and Economic Policy (ITEP) finds that nearly every state fails basic measures of fairness, but Minnesota is among a small number of states where income inequality is reduced by state tax 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.