Institute on Taxation and Economic Policy

ITEP Work in Action

Maine Center for Economic Policy: MECEP Testifies Against Bills to Cut Taxes for the Wealthy at Expense of Maine’s Schools

March 20, 2017

Augusta, Maine (Monday, March 20, 2017) State legislators on the taxation committee will hold a public hearing today on several bills that would roll back the tax to pay for education enacted under Question 2, the ballot initiative passed by Maine voters in November 2016. As a result of Question 2, the state will have the capacity to provide 55% of school funding mandated by voters previously in 2004.

Evidence Counts: Wealthiest 1% of West Virginians Gain from Tax Cuts in Health Care Repeal

March 20, 2017

The House proposal to repeal the federal Affordable Care Act (ACA) and replace it with the American Health Care Act (AHCA), provides only a tiny fraction of very wealthy West Virginians tax cuts while reducing the number of Americans with health coverage by an estimated 24 million. The two big tax cuts included in the […]

The Economic Progress Institute: Understanding Rhode Island’s Motor Vehicle Tax

March 19, 2017

The Motor Vehicle Tax (commonly known as the “Car Tax”) is a property tax collected by each Rhode Island municipality based on the value of each motor vehicle owned. There are three components that determine how much each individual car is taxed: valuation, tax rate and exemption. Read more here

North Carolina Justice Center: BTC POLICY BASIC: Marginal versus Effective Personal Income Tax Rates

March 19, 2017

A great deal of confusion abounds in discussions about state personal income tax rates and how they apply to income. This policy basic clarifies the difference between marginal and effective tax rates, and gives a North Carolina-specific example of how these rates work in action. Read more here  

North Carolina Justice Center: Still walking the path to zero: The Senate tax plan will harm North Carolina’s goal of building a stronger, inclusive economy

March 19, 2017

Senate leaders continue to pursue reductions to the income tax rate for wealthy taxpayers and profitable corporations even as they claim to be focused on helping low- and moderate-income taxpayers. This year they will do so without proposing immediate replacement of the revenue with sales-tax base expansions. The result is a loss of nearly $1 […]

Montana Budget & Policy Center: Capital Gains Tax Credit Valuing Wealth Over Work in Montana

March 19, 2017

In 2003, the Montana Legislature passed a capital gains tax credit that benefits a very narrow portion of our population at the great expense of our collective ability to adequately invest in public programs, from education to health care. Currently, Montana is one of just nine states offering a significant tax break for capital gains […]

Kansas Center for Economic Growth: A Flat Tax Would Only Worsen Kansas’ Budget Crisis

March 18, 2017

Governor Sam Brownback’s 2012 plan to phase out the state income tax created an unprecedented fiscal crisis for Kansas. Some options presented for addressing this crisis would “flatten” Kansas’ income tax and require all Kansans to pay the same income tax rate, regardless of how much they earn. Read more here

The Half Sheet: You Can’t Cut Your Way to Prosperity

March 17, 2017

Virginia’s tax system is upside down. Regular Virginians pay a higher share of their income in state and local taxes than the wealthy and powerful. An array of recently proposed schemes to give new handouts to the wealthy and powerful would make it even more unfair. Virginians can’t afford that.  As part of our work […]

Connecticut Voices for Children: Testimony Regarding S.B. No. 787 – AAC Revenue Items To Implement the Governor’s Budget

March 9, 2017

At Connecticut Voices for Children, we view the state budget as the clearest statement of Connecticut’s policy priorities. We believe that these priorities should advance long-term inclusive economic prosperity, equity of opportunity, and support for our most vulnerable residents. We believe that an effective revenue system can advance these core priorities by adhering to five […]

Minnesota Budget Project: Undocumented Immigrants Pay $83 Million in State Taxes, Would Pay More with Immigration Reform

March 9, 2017

Undocumented immigrants play a vital role in Minnesota’s economy and currently pay an estimated $83 million in state and local taxes, according to a new report from the Institute for Taxation and Economic Policy (ITEP). Under immigration reform that provides a path to legal status, ITEP estimates these contributions would substantially increase.

Georgia Budget and Policy Institute: Targeted Fix to Income Tax Package Can Deliver Georgians a Win

March 9, 2017

Georgia lawmakers are considering a large income tax proposal with three sound tax policy reforms alongside one serious shortcoming. On the plus side, the current bill proposes to boost families with a new Georgia Earned Income Tax Credit (EITC), close an outdated loophole and index several broadly available exemptions to ensure they keep pace with […]

Invest in Louisiana: Moving from Budget Cuts to State Investment

March 6, 2017

Louisiana’s tax system is broken. It doesn’t bring in enough revenue to pay for the things that allow communities to thrive- strong schools, good hospitals and public safety. It taxes people with low incomes at higher levels than the rich. It doesn’t keep up with economic growth. And it’s riddled with special-interest exemptions and tax […]

Connecticut Voices for Children: Testimony Regarding Estate and Gift Taxes and Exempting Retirement Income: SB 5, SB 58, HB 6358, SB 6, SB 272, HB 6558, and HB 5587

March 3, 2017

Exemptions to Pensions and Social Security – Exempting retirement income would not only cause immediate revenue deterioration, but given the state’s aging population, could threaten long-term adequacy of the income tax. According to the University of Virginia’s Demographics’ Research Group, Connecticut’s share of individuals age 65 and older is expected to increase rapidly from 14 […]

Evidence Counts: A Marriage Not Made in Heaven: A State EITC Without an Income Tax

February 28, 2017

Last Friday, the Senate Select Committee on Tax Reform explored the idea of amending SB 335 to include a version of a refundable state Earned Income Tax Credit. As noted previously, SB 335 would replace the personal and corporate income tax, along with the sales and use tax, with a general consumption tax of 8 […]

North Carolina Budget and Tax Center: The Road to Nowhere Good for North Carolina

February 22, 2017

Tax changes passed in the 2016 legislative session reduced the income tax rate and increased reliance on the sales tax. This continued flawed approach to taxation that policymakers have followed since 2013 has proven disastrous to other states’ fiscal and economic outlook. Such an approach delivers the greatest reduction in the tax load to the […]

Georgia Budget & Policy Institute: Income Tax Bill Offers Earned Income Tax Credit Upside, Flat Tax Downside

February 22, 2017

Members of the Georgia House are set to consider a large income tax proposal that contains a mix of positive reforms and measures that raise significant concerns. Some aspects of the bill offer benefits to working class Georgia families, while others could harm similar taxpayers or unduly jeopardize state revenues. While the bill provides a […]

Kentucky Center for Economic Policy: The Math Behind Ed Choice Tax Credit Fails Many Tests

February 21, 2017

Today in the House Education Committee legislators are hearing discussion of House Bill 162, a proposal to create a so-called Education Choice tax credit in Kentucky. This proposal does not target low- and moderate-income students as suggested; is expensive, taking resources away from public schools and other investments; and provides an excessively large credit under […]

Evidence Count: Governor Justice’s Tax Plan: Who Pays?

February 21, 2017

Governor Jim Justice has not introduced any tax measures yet, but in his State of the State Address and his executive budget  there are plans to enact several tax increases to close the Fiscal Year 2018 budget gap of $500 million and address the state’s declining road fund that pays for highway construction, maintenance, and road […]

West Virginia Center on Budget & Policy: Income Tax Elimination is a Poor Growth Strategy

February 20, 2017

Unfazed by a $600 million looming budget deficit, plans by some lawmakers to reduce or eliminate West Virginia’s state income tax  — which would mostly benefit the wealthiest residents — and replace it with a sales tax hike are unlikely to produce the economic growth supporter’s claim.  Instead it would dramatically shift tax responsibilities from […]

Evidence Counts: Replacing Income Taxes with a General Consumption Tax is Radical and Regressive (SB 335)

February 20, 2017

Senate leadership introduced SB 335 which would abolish the personal income tax and sales and use tax, phase out the corporate income tax, lower the severance tax, and replace these taxes with an 8 percent broad-based general consumption or sales tax. While it is unclear whether this tax shift would be revenue neutral, it would dramatically […]

West Virginia Center on Budget & Policy: What Would Eliminating the Income Tax Mean for West Virginia?

February 17, 2017

Eliminating the income tax is a strategy that has been tried over and over in other states with little or nothing to show, other than revenue erosion that brings cuts in support for schools, transportation and other true building blocks of broad prosperity. A better course for West Virginia would be to reform the tax […]

Maine Center for Economic Policy: Testimony in Opposition to Governor’s Proposed Budget, Parts D, E, and F

February 17, 2017

These proposed tax changes would stand in the way of building thriving communities and a strong Maine economy. There is a direct correlation between state resources and the ability to be proactive in making the kind of investments that lay the foundations for a strong economy. Cutting taxes for the rich at the expense of everyone […]

Open Sky Policy Institute: Income tax bills good for wealthy and non-residents

February 16, 2017

Forty percent of Nebraskans would see tax increases under LB 452 Low- and middle-income earners pay more of their incomes in sales taxes than income taxes. This is reflected in Institute on Taxation and Economic Policy (ITEP) data that show LB 452 – which includes a sales tax expansion — would raise taxes on average […]

West Virginia Center on Budget & Policy: Replacing Income Tax with Sales Tax is a Boon for the Wealthy

February 15, 2017

Scale back income tax exemptions – Every taxpayer regardless of income receives a $2,000 exemption for each dependent. Phase it out between $150,000-$200,000, and eliminate it for those over $200,000, and it would increase revenue by an estimated $10 million. PowerPoint presentation available here

Kansas Action for Children: KAC Testimony to the Senate Assessment and Taxation Committee in Support of Senate Concurrent Resolution 1604

February 15, 2017

The high food sales tax hurts Kansas families. Food is a basic necessity for Kansas’ families. According to the Institute on Taxation and Economic Policy, the state’s increasing reliance on sales tax hurts Kansas’ poorest residents. The lowest 20% of  income earners in Kansas pay an average of 11.1% of their income in state and […]

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.