Institute on Taxation and Economic Policy

ITEP Work in Action

Better Wyoming: New Report: Low-income Residents in Wyoming Pay an Effective Tax Rate More Than Three Times Higher Than the State’s Wealthiest One Percent

October 17, 2018

A new study released today by the Institute on Taxation and Economic Policy (ITEP) and Better Wyoming finds that the lowest-income Wyomingites pay an effective tax rate more than three times higher than the state’s richest residents. Wyoming’s tax rate gap between the working poor and the ultra-rich is one of the worst in the nation.

The Half Sheet: Virginia’s Tax System Is Upside Down

October 17, 2018

Virginia’s state and local taxes help to shape economic opportunity across the state. That’s because state and local revenues pay for the building blocks of thriving communities: schools, roads, libraries, and other public services. Unfortunately, the current state and local tax system is upside down. Families in Virginia have taxes withheld from their paychecks, and they also pay taxes when they shop at local businesses, buy groceries, or fill their gas tanks. But updated analysis from the Institute on Taxation and Economic Policy (ITEP) shows that Virginia’s low- and moderate-income households pay a higher share of their incomes toward state…

Oklahoma Policy Institute: New Analysis: Low-income Taxpayers in Oklahoma Pay More than Twice the Tax Rate Paid by the Richest Oklahomans

October 17, 2018

While Oklahoma has a reputation as a low tax state, poor and middle-income Oklahomans are actually paying a greater share of their income in taxes than the national average, while the richest 5 percent of households — with annual incomes of $194,500 or more — pay less.

Budget and Policy Center: Unacceptable. Washington Still Has the Nation’s Most Inequitable State Tax Code

October 17, 2018

Washington state continues to have the most upside-down tax code of any U.S. state, according to a new report from the Institute on Taxation and Economic Policy (ITEP). It wrongly requires people with the lowest incomes to pay six times more in taxes as a percent of their income than the state’s wealthiest residents to fund investments that benefit all Washingtonians.

Florida Policy Institute: Florida Has Third Most Unfair State and Local Tax System

October 17, 2018

Florida’s reputation as a “low-tax” state belies the reality that it is, in fact, a high-tax state for low- and moderate-income residents. Floridians with the lowest incomes — those earning less than $18,700 — contribute 12.7 percent of their incomes to state and local taxes, while the wealthiest top 1 percent — those with incomes of more than $548,700 — contribute just 2.3 percent of their income.

Louisiana Budget Project: Who Pays Taxes in Louisiana?

October 17, 2018

When it comes to paying for government services, Louisiana asks a lot more of those with the fewest resources than it does of its wealthiest citizens, according to new analysis by the Institute on Taxation and Economic Policy. Thanks to a heavy reliance on sales taxes and tax exemptions that favor the wealthy, the less you earn in Louisiana, the more of you pay in taxes as a percentage of income.

Louisiana Budget Project: Analysis: Louisiana’s Regressive Tax Structure Disproportionately Affects Low-income Residents

October 17, 2018

A new study released Wednesday by the Institute on Taxation and Economic Policy and the Louisiana Budget Project finds that Louisiana has the 14th most unfair state and local tax system in the country, with the lowest-income Louisianans paying almost two times more in taxes as a percent of their income compared to the state’s wealthiest residents.

Center on Budget Policy Priorities: State, Local Tax Systems Worsening Inequality

October 17, 2018

State and local tax systems can be a powerful tool for boosting economic opportunity, creating broadly shared prosperity, and building equitable state economies. But in nearly every state, they’re reinforcing and often worsening inequality, as the Institute on Taxation and Economic Policy shows in a new report.

Kentucky Center for Economic Policy: New Report: Wealthiest Kentuckians Pay the Lowest Tax Rate and the Problem Is Worsening

October 17, 2018

The study, Who Pays? A Distributional Analysis of the Tax Systems in All 50 States, evaluates the major components of state and local tax systems – including personal and corporate income taxes, property taxes, sales taxes and other excise taxes – for their overall distributional impact across income groups. For example, Kentucky’s low income tax credit means that people in poverty do not pay state income taxes. However, because the state fails to provide refundable tax credits to offset sales, excise and property taxes paid by low-income people, and because the state has a flat as opposed to graduated income…

Indiana Institute for Working Families: New Analysis: Indiana’s Tax System is Among the Dozen Most Regressive in the Country

October 17, 2018

The new ‘Who Pays?’ analysis follows the Institute’s August report ‘The Status of Working Families in Indiana, 2018’ which found the wealthiest Indiana earners have received an extra $2,446 from combined state income, corporate, and fuel tax changes since 2012, while taxes for the bottom 60% of middle class and working families have increased by an average $36.

Kansas Center for Economic Growth: New Analysis: Tax Reform Reduces Inequality for Kansans, but Low-Income Taxpayers Still Pay 1.5 Times the Rate Paid by the Richest

October 17, 2018

A new study released today by the Institute on Taxation and Economic Policy and the Kansas Center for Economic Growth finds that the lowest-income Kansans pay 1.5 times more in taxes as a percent of their income compared with the state’s wealthiest residents.

Insider NJ: New Analysis: Middle Class Taxpayers in New Jersey Still Paying More Than Tax Rate Paid by Richest 1 Percent of New Jerseyans

October 17, 2018

A new study released today by the Institute on Taxation and Economic Policy (ITEP) and New Jersey Policy Perspective (NJPP) finds that New Jersey’s middle class families pay more in taxes as a percent of their income compared to the state’s wealthiest residents. 

Politico Morning Tax: Desperately Seeking Clarity

October 17, 2018

MOST STATE TAX SYSTEMS REGRESSIVE: No state has more regressive taxes on its citizens than Washington, followed by Texas, Florida, South Dakota and Nevada, according to a distributional analysis of state tax systems that will be released today by the Institute on Taxation and Economic Policy. Most states take a larger share of income from low- and middle-income families than from wealthy families, it said. The 10 most regressive in the rankings tax their residents in the bottom 20 percent of the income scale at rates up to six times higher than the wealthy, while their middle-income families pay a rate up to…

Public News Service: Report: NM Tax Overhaul Would Benefit Kids, Families

October 17, 2018

Regressive tax systems hurt children and families, according to a new report from the Institute on Taxation and Economic Policy - and by that standard, it says New Mexico has the 19th-worst tax system in the United States. The study showed that as a share of their income, the lowest-income New Mexicans are paying state and local tax rates almost double those of the state's wealthiest residents.

Louisiana Budget Project: Federal Tax Cut Worsening Racial Wealth Divide

October 12, 2018

While President Trump and Republicans in Congress heralded the Tax Cut and Jobs Act of 2017 as a major tax cut for the middle class, the numbers don’t bear that out. A new analysis by researchers at Prosperity Now and the Institute on Taxation and Economic Policy reveals just how much of the federal tax cut benefits went to the highest income earners, and the crumbs that were left over for low and middle-class households.

BTC Report: Income tax rate cap amendment is costly for taxpayers, communities

September 28, 2018

Imposing an arbitrary income tax cap in the North Carolina Constitution could fundamentally compromise our state’s ability to fund our schools, roads, and public health, as well as raise the cost of borrowing. This could all happen even as the tax load shifts even further onto middle- and low-income taxpayers and the state’s highest income taxpayers — the top 1 percent — continue to benefit from recent tax changes since 2013.

The Free Press: Think Tank Releases Blueprint to Fully Fund Education, Medicaid & Lower Property Taxes

September 20, 2018

Tax cuts passed by the Maine Legislature and Gov. Paul LePage over the past eight years will cost the state $864 million in revenue in the next biennium, according to an analysis by the Maine Center for Economic Policy and the Institute on Taxation and Economic Policy. At the same time the state continues to ignore its legal obligations to fully fund education, Medicaid expansion and revenue sharing.

West Virginia Center on Budget & Policy: Don’t Double Down on Failed Federal Tax Cuts

September 18, 2018

Extending most of these provision does more of the same and is a huge and alarming waste of resources. According to the Institute on Taxation and Economy Policy, if the individual tax provisions are extended to 2026 and beyond, the richest 1 percent – those making on average $762,000 – in West Virginia would receive an average tax cut of over $20,000. Meanwhile, the poorest 20 percent with an average income of $12,900 will see an average tax increase of $40.

WRAL: Meg Wiehe: Capping North Carolina’s top income tax rate isn’t good for our communities

September 4, 2018

ITEP Deputy Director Meg Wiehe writes for WRAL.com that it would be unwise to constitutionally cap the North Carolina state income tax rate, pointing out that school funding in the state is already down and faltering revenues in other states have led to teacher pay crises and strikes. 

Keystone Research: The State of Working Pennsylvania 2018

August 30, 2018

“The State of Working Pennsylvania 2018,” Keystone Research Center’s 23rd annual review of the Pennsylvania economy and labor market finds that, nearly a decade into the current national economic expansion, many Pennsylvania workers are still waiting for a raise. The report points to three factors that help explain this.

Kentucky Center for Economic Policy: Clean Up the Tax Code to Invest in Our Commonwealth

August 22, 2018

To move our tax code in the right direction, Kentucky should rejoin 32 other states with a graduated income tax based on ability to pay. Income below $37,500 single/$75,000 married should still be taxed at 5 percent, between that point and $75,000 single/$150,000 married at 6 percent and above those incomes at 7 percent, phasing […]

Press Herald: Will Maine Referendum On Home Care Result In ‘Marriage Penalty’ Tax?

August 17, 2018

Aidan Davis, senior policy analyst at the nonpartisan Institute on Taxation and Economic Policy, wrote a letter to the Secretary of State’s Office on June 15 stating that the income threshold would be double for married couples filing jointly. “We found the language of the initiative to be clear in describing that individual (not household) […]

Itchy Tax Trigger Finger: Tax Foundation Says Aim Toward Foot

August 6, 2018

Accounting for all the possible curveballs the future economy might throw at our state is impossible. That’s why legislators bother coming together every year to assess our budget and make choices based on the best available, most current information. One dubious new style of tax change, “tax triggers”, attempts to base major future tax and revenue changes only on the information we have today. Tax triggers are dangerous and generally work by automatically kicking in a tax cut when revenue or some other metric reaches a certain level.

Indiana Institute for Working Families: The Status of Working Families in Indiana: 2018 Report

August 1, 2018

Indiana faces a choice of whether to continue down a southward-leading path of low-road policies, or to rebuild its economy for Hoosier families. By adopting a policy agenda for working families that improves Indiana’s jobs with higher wage and labor standards; strengthens protections for Hoosier families including repairing the safety net and crafting consumer and job safeguards; and increases economic mobility through improved access to education, rebalancing the state’s regressive tax and budget structure, and focusing economic development on strengthening Hoosier families and communities, Indiana can reclaim its place as a leader in the Midwest and in the nation.

Cleveland.com: Changes Needed in Ohio’s Tax Policy (Opinion)

July 15, 2018

The Institute on Taxation & Economic Policy has examined the major state tax changes since 2005. For the top 1 percent, who make at least $480,000 a year, the tax cuts average $40,790 annually. Middle-income Ohioans on average have not received a cut, while those in the poorest fifth, earning less than $22,000, got an average increase of $140.

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.