As a July 2024 report from the nonpartisan Institute on Taxation and Economic Policy (ITEP) shows, people who are undocumented paid $97 billion in taxes in 2022. A total of $34 billion comes from payroll taxes to cover programs that exclude people who are undocumented from getting benefits: $25.6 billion paid to Social Security, $6.4 billion to Medicare, and, through contributions of their employers, $1.8 billion to unemployment insurance (which is a joint federal and state program). In other words, workers who are undocumented have wages withheld or employers are required to pay for programs that benefit other Americans, but which systematically leave them behind.2
ITEP Work in Action
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.
-
ITEP Work in Action July 30, 2024 Immigration Research Initiative: People Who Are Undocumented: Occupations, Taxes Paid, and Long-Term Economic Benefits
-
ITEP Work in Action July 3, 2024 The Volcker Alliance: Benefit or Burden
The issue paper addresses how US states hand out massive tax breaks every year to advance policy goals, such as aiding low-income families, spurring business investment and job creation, or mirroring the federal tax code. Known broadly as tax expenditures, these exemptions, credits, abatements, and other measures reduce state revenues by an estimated $1 trillion a year, almost three times their 2021 total state expenditures on education. Such tax expenditures, which often suffer from lax government oversight, may be leaving states short on revenue at time when the effects of climate change and the cost of deferred maintenance means that they will need to spend more on infrastructure now and in the decades ahead.
-
ITEP Work in Action June 26, 2024 U.S. Senate Committee on Health, Labor, Education, and Pensions: By the Wealthy, for the Wealthy: The Coordinated Attacks on Public Education in the United States
Public education is the cornerstone of opportunity in the United States. No matter who they are,
where they live, or how much money their parents make, every child in this nation has a
fundamental right to a public education. But in America today, the public education system—one
of the cornerstones of democracy—is under attack. -
ITEP Work in Action June 26, 2024 Americans for Tax Fairness: Engine of Inequality: A Flood of Corporate Profits Is Enriching Wealthy Shareholders Through Stock Buybacks and Dividends, At The Expense of Workers and The Public
All but a handful of 280 large, profitable corporations spent more money making their wealthy shareholders richer through dividends and stock buybacks than they paid in federal income taxes in the five years after the enactment of the Trump-GOP tax law, according to a new analysis by Americans for Tax Fairness. And it wasn’t even close: altogether the stockholder payouts outstripped tax payments by 7-to-1, $4.4 trillion vs. $608 billion. This heavy bias towards shareholder payments for wealthy investors over tax payments for public services exacerbates economic inequality and promotes political instability, as increasingly frustrated American workers struggle to get by while wealthy stock investors surge ever further ahead.
-
ITEP Work in Action June 20, 2024 The Hamilton Project: The Austere US Safety Net for Poor, Non-Elderly Adults Who Are Not Raising Children and Do Not Receive Disability Benefits
The U.S. safety net has grown significantly stronger for children and elderly adults over the past half century. However, the story is starkly different for non-elderly adults who are not raising children and do not receive Supplemental Security Income disability benefits or Social Security benefits, Robert Greenstein argues in his Hamilton Project paper. In 2017, this group numbered nearly 106 million people, or nearly 33 percent of the U.S. noninstitutionalized population.
-
ITEP Work in Action June 20, 2024 Arkansas Advocates for Children & Families: The Definition of Regressive
Today the Legislature, in a special session called by the Governor, begins discussion of Senate Bill 1. According to an analysis by the Institute on Taxation and Economic Policy, this bill will eliminate at least $450 million in tax revenue every year from general revenue. This revenue is essential for services important to all Arkansans, such as education and health services. What’s more, this tax giveaway prevents strategic investment in our state to help all Arkansans thrive. We deserve investment from our elected officials, not a race to the bottom.
-
ITEP Work in Action June 18, 2024 Roosevelt Institute: When Tax Policy Discriminates: The TCJA’s Impact on Black Taxpayers
We found that black taxpayers who looked like their white counterparts in terms of these and other demographic factors paid higher taxes because the IRC favors certain behaviors and benefits that are closed to black people. For example, black people were then (and are now) less likely to receive valuable employer-provided tax benefits such as the opportunity to save for retirement tax-free, up to $50,000 of tax-free life insurance, and reimbursement for employee business expenses. A long history of federal government actions created and sustained redlining, making black people less likely to own homes and thus barred from receiving the home mortgage interest deduction and the deduction for state and local taxes, while also making it more difficult for black taxpayers to escape the standard deduction to get the benefit of other itemized deductions through IRS Form 1040 Schedule A. A long American history gave white people wealth while it made black people property, and so kept the benefits of the capital gains rate from Black taxpayers. The list of inequalities was extensive and, in the end, we inspired a generation of scholars to produce quantitative research on racial tax disparities.
-
ITEP Work in Action June 14, 2024 Hawaiʻi Appleseed Center for Law and Economic Justice: Hawaiʻi’s Elected Leaders Again Buy-In to Costly “Trickle-Down” Myth
When it comes to tax policy, Hawaiʻi’s 2024 legislative session was largely defined by a single bill—House Bill 2404. Signed into law as Act 046 by Governor Green on June 3, the bill enacts sweeping tax cuts for people of all income levels, but most of the benefit goes to those at the top of the income scale.
-
ITEP Work in Action June 13, 2024 Institute for Policy Studies: A Fair Tax Agenda for Wall Street
Thank you, Chairman Whitehouse, Ranking Member Grassley, and members of the committee, for the invitation to participate in this important hearing. I am Sarah Anderson, Global Economy Director at the Institute for Policy Studies, an independent center for research and action founded in 1963. I also co-edit the Institute’s Inequality.org web site.
-
ITEP Work in Action June 11, 2024 The FACT Coalition: FACT Sheet: Congress Should Repeal a Wasteful Tax Break for Big Tech
The 2017 tax reform massively reshaped how U.S. multinationals are taxed on their foreign income, including through the application of a global minimum tax that grants corporations a substantial discount on their foreign profits. This discount gave big multinationals new incentives to stash their most valuable intangible assets – intellectual property like patents, trademarks, and other highly mobile properties – in foreign tax havens to avoid taxation at the full U.S. domestic rate. In an attempt to balance this perverse incentive, the 2017 law sought to bring investment back to the United States through a provision known as the Foreign-Derived Intangible Income (FDII) deduction, a massive tax break for corporations that earn income from their U.S. intellectual property by selling goods and services abroad.
-
ITEP Work in Action June 7, 2024 Policy Matters Ohio: Income Tax Extremism Is a Gift to the Wealthy. Repairing the Damage Would Cost Us All
Ohioans deserve an equitable tax system that supports the public goods and services that enable all of us to thrive. Unfortunately, that is not the system we have today. After two decades of tax handouts to corporations and the rich, our upside-down tax system increasingly perpetuates inequality while failing to adequately fund services like education and health care. This all pales in comparison to the extreme proposal from lawmakers that would eliminate the state’s personal income tax.
-
ITEP Work in Action June 5, 2024 Center on Budget and Policy Priorities: States Should Reverse Course on Defunding Public Education Through Private School Vouchers and Property Tax Cuts
During this year’s legislative sessions, at least one in three states are considering or have enacted school voucher expansions alongside broad, untargeted property tax cuts. Over half of states have already enacted deep personal and corporate income tax cuts in the last three years. These policies will result in under-resourced public schools, worse student outcomes, and, over time, weaker communities.
-
ITEP Work in Action May 31, 2024 Colorado General Assembly: HB24-1311 Family Affordability Tax Credit
Gov. Polis of Colorado signed the bill expanding its Child Tax Credit, which cites ITEP’s research on the second page of the bill text. Read the bill and its status. -
ITEP Work in Action May 21, 2024 International Journal of Economics, Business and Management Research: The U.S. Federal and State Tax Simplification and Reform for Senior Citizens
The U.S. Federal and many State Governments provide social security tax deductions, either partial or all, for senior citizens. However, tax systems still require those whose incomes exceed standard deductions to report and calculate their income taxes. Usually, senior citizen’s income sources are from social security benefits, 401K retirement funds, IRA, annuities, pensions, and/or others. This paper provides a linear tax rate and tax formula to simplify federal and state social security and retirement taxes compared with the existing complicated tax calculation systems. This research also provides a reform proposal to combine all taxable incomes for qualified seniors who have certain retirement taxable incomes, such as less than $25,000 for Single Filers or $50,000 for Married Filing Jointly, and have no federal or state tax responsibilities. The numbers can be adjusted according to the tax revenue change after the tax reform. Senior citizens with more than standard deductions can simplify their tax returns. The benefits would include tax processing time and cost reductions for those qualified seniors and governments. It will comply with the goal of the IRS to make tax laws easier for senior citizens. In other words, the proposed method could achieve tax efficiency and optimal senior personal income taxation for federal and state governments, which may also be a good application for other countries.
-
ITEP Work in Action May 21, 2024 Democrats: President Biden Delivers for Wisconsin While Trump Backs Billionaires Over Working Families
Today, President Biden’s visit to Racine, Wisconsin will underscore how his economic agenda is uplifting Wisconsin families by creating good-paying jobs, cutting costs, and building the middle class. Just last week, Trump spent his short time in Wisconsin lying about President Biden’s economic wins, because he knows that his only defense against President Biden’s successful record is to lie in a desperate attempt to hide how he failed Wisconsin families.
-
ITEP Work in Action May 21, 2024 Senate Committee on the Budget: Extending Trump Tax Cuts Would Add $4.6 Trillion to the Deficit, CBO Finds
According to the latest report by the nonpartisan Congressional Budget Office (CBO), extending the Trump tax cuts for the next 10 years—as Republicans have proposed—would add $4.6 trillion to the deficit.
-
ITEP Work in Action May 16, 2024 Bipartisan Policy Center: Credit Where Credit’s Due: Engaging State and Local Governments in Refundable Tax Credit Design and Administration
The Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) are two of the most effective anti-poverty tools in the United States, helping to boost household economic security while incentivizing work for millions of Americans each year. Over the past three years in particular, attention increased on the interactions between state and federal tax policy as states grappled with the EITC’s and the CTC’s rapid temporary expansion, as well as changes to complementary federal policies and programs during the COVID-19 pandemic. Changes at the federal level to these two credits highlighted critical challenges facing policymakers and the public including optimal tax policy design and administration.
-
ITEP Work in Action May 6, 2024 Economic Policy Institute: The Evolution of the Southern Economic Development Strategy
The Southern economic development model has failed to create shared prosperity in the region. In fact, this model was deliberately designed to do the opposite—to extract the labor of Black… -
ITEP Work in Action May 1, 2024 Center for American Progress: The Tax Cuts and Jobs Act Failed To Deliver Promised Benefits
The 2017 Tax Cuts and Jobs Act (TCJA) made sweeping changes to America’s tax laws. Signed into law by then-President Donald Trump and approved with only Republican support in both the House of Representatives and the Senate, the TCJA permanently slashed corporate tax rates and changed the way the nation taxes the profits of U.S. multinational corporations.1 It also temporarily cut personal income and estate taxes, changes that largely benefited the wealth.
-
ITEP Work in Action April 29, 2024 ThinkTennessee: Tennessee’s Working Families Are Paying More Than Their Fair Share of Taxes
A new fact sheet released today by nonpartisan think tank ThinkTennessee finds that while Tennessee has one of the lowest overall tax burdens in the nation, its low-income families face a higher effective tax rate than both wealthier families and businesses. The analysis comes on the heels of Tax Day when millions of individual income tax returns are due to be submitted to the federal government.
-
ITEP Work in Action April 22, 2024 Liberation in a Generation: Separate & Unequal: Transforming Our Tax Code to Deliver a Liberation Economy
The tax exclusions, exemptions, deductions, and credits in the U.S. tax code aimed at helping all individuals and families build economic security instead provided $1.2 trillion in support to mostly wealthy white households. The U.S. tax code was intended to more evenly collect and distribute the aggregate resources of our nation to care for all, over the course of its 111-year existence, this system has been molded by wealthy, largely white, elites and our policymakers into a wealth-hoarding mechanism for the nation’s most privileged people seeking to amass obscene levels of wealth.
-
ITEP Work in Action April 18, 2024 Illinois Fund Our Futures Coalition: Funding Our Futures: The Equitable Revenue Policies Illinois Families Need to Thrive
Read the report here. -
ITEP Work in Action April 18, 2024 OpenSky Policy Institute: Modeling Details How Amended Tax Package Would Impact Nebraskans
Most Nebraskans who claim the state income tax credit on property taxes paid to public schools will see little change in what they pay resulting from the tax package to… -
ITEP Work in Action April 18, 2024 Center on Budget and Policy Priorities: Black Women Best Framework Points the Way to Equitable and Just State Tax Reform
States and localities can realize more equitable, thriving economies by proactively addressing the historical marginalization and persistent exploitation of Black women through their revenue policies. State tax policy is not… -
ITEP Work in Action April 17, 2024 Scholars Strategy Network: Tax Policy as a Potential Tool for Reducing Infant Mortality
Increased tax revenues and increased tax progressivity need to be further explored as policy solutions in Illinois. More specifically, the adoption of worldwide combined reporting and a state-level child tax credit, could help prevent infant deaths in our state.