Congress has a historic opportunity to fix the way the preferential treatment of investment income widens the racial wealth gap and to strive toward a racially equitable tax code.
Federal Policy
ITEP’s federal policy resources provide quantitative and qualitative research and analysis on current tax policies, proposals and reform options. Its distributional analyses highlight how tax proposals will affect Americans in different income groups nationally and in all 50 states.
ITEP's Federal Policy Research Priorities
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brief October 14, 2021 Investment Income and Racial Inequality
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blog October 14, 2021 Limiting Tax Breaks for Capital Gains Would Mitigate the Racial Wealth Gap
A new report from ITEP finds that recent proposals to limit tax breaks for capital gains would reduce the racial wealth gap and mitigate economic inequality while affecting few people… -
blog October 4, 2021 State Income Tax Reform Can Bring Us Closer to Racial Equity
The origins of the racial wealth gap are far from mysterious. A long history of injustices and exclusionary policies and social practices created an economic system that privileges wealth and… -
blog September 28, 2021 The Billionaires’ Income Tax Is the Latest Proposal to Reform How We Tax Capital Gains
Last week, a new report from the White House examining the wealthiest 400 Americans reaffirmed what the public recently learned from a ProPublica expose: The very wealthy do not pay… -
blog September 28, 2021 Reforming Federal Capital Gains Taxes Would Benefit States, Too
Congress’s action or inaction on federal tax changes under consideration in the Build Back Better plan could have important implications for states on many fronts. One critical area of note… -
report September 23, 2021 Repealing the SALT Cap Would Wipe Out Revenue Raised by the House Ways and Means Bill’s Income Tax Provisions
Download National and State-by-State Figures A recent report from ITEP finds that the tax provisions in the House Ways and Means Committee Build Back Better bill would raise revenue from… -
blog September 21, 2021 New ITEP Report Examines the Tax Changes in the House Ways and Means Build Back Better Bill
Download National and State-by-State Data A new ITEP report finds that the combination of tax changes in the Build Back Better bill recently approved by the House Ways and Means… -
report September 21, 2021 Tax Changes in the House Ways and Means Committee Build Back Better Bill
Download National and State-by-State Data NOTE: This report was revised on October 1 to incorporate new estimates of one of the proposals, the 3 percent surcharge on income in excess… -
report September 17, 2021 Why Congress Should Reform the Federal Corporate Income Tax
Congress is considering legislative changes that would increase federal corporate income taxes partly by closing or limiting the special breaks and loopholes that companies use to avoid taxes. The following… -
blog September 15, 2021 House Ways and Means Provisions to Raise Revenue Would Significantly Improve Our Tax System But Fall Short of the President’s Plan
The Ways and Means Committee, the tax-writing body in the House of Representatives, is continuing its work today on tax provisions in a reconciliation bill. The provisions to raise revenue… -
blog September 14, 2021 New Census Data Highlight Need for Permanent Child Tax Credit Expansion
Millions of families struggled to make ends meet before Covid-19, and they continue to bear the brunt of the pandemic. Low- and moderate-income workers in the earliest days of the… -
blog September 13, 2021 A Data-Driven Case for the CTC Expansion in the Ways & Means Committee’s Recent Proposal
There is a lot to commend in the Ways and Means committee’s proposal to temporarily extend and, in some cases, make permanent federal tax credit enhancements. ITEP today analyzed the… -
blog September 13, 2021 Extending Federal EITC Enhancements Would Bolster the Effects of State-Level Credits
Download the PDF Brief In a new brief, ITEP provides estimates of how a permanent expansion of federal Earned Income Tax Credit (EITC) enhancements under the American Rescue Plan Act… -
report August 26, 2021 Options to Reduce the Revenue Loss from Adjusting the SALT Cap
Download National and State-by-State Data Read as PDF Lawmakers determined to eliminate the cap on federal income tax deductions for state and local taxes (SALT) have several options to reduce… -
brief August 25, 2021 The One Thing Missing From the Qualified Business Income Deduction Conversation: Racial Equity
When crafting tax policy, lawmakers and bill authors often work backward, using a patchwork of changes to help achieve their stated goal. One important consideration that is routinely left out is what impact the change will have on racial equity. Such is the case with the qualified business income deduction, which is helping to further enrich wealthy business owners, the overwhelming majority of whom are white. At present, white Americans own 88 percent of private business wealth despite making up only 60 percent of the population. Meanwhile, Black and Hispanic families confronting much higher barriers to entrepreneurship each own less than 2 percent, despite making up 13 percent and 19 percent of the population, respectively.
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report July 29, 2021 Corporate Tax Avoidance Under the Tax Cuts and Jobs Act
Thirty-nine profitable corporations in the S&P 500 or Fortune 500 paid no federal income tax from 2018 through 2020, the first three years that the Tax Cuts and Jobs Act (TCJA) was in effect. Besides the 39 companies that paid nothing over three years, an additional 73 profitable corporations paid less than half the statutory corporate income tax rate of 21 percent established under TCJA. As a group, these 73 corporations paid an effective federal income tax rate of just 5.3 percent during these three years.
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blog July 20, 2021 Child Tax Credit Expansion Acknowledges There Is More We Can Do for Children
For the next six months, low-, middle- and upper-middle-income families with children are eligible to receive part of their 2021 Child Tax Credit (CTC) in advanced monthly payments. More than putting money in people’s pockets, this policy recognizes “the dignity of working-class families and middle-class families,” as President Biden said last week.
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blog July 16, 2021 Opposition to Biden’s Tax Plan Has Nothing to Do with Small Businesses or Family Farms
Special interests lobbying against President Joe Biden’s tax agenda claim that his proposed corporate income tax rate hike will harm small businesses and that his proposed capital gains tax reforms will hurt family farms. Both claims are absurd attempts by powerful interests to pretend they are defending the little guy.
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blog July 16, 2021 Washington Post Confirms that Corporations Are Bolder than Ever in Claiming Dubious Tax Breaks
IRS budget cuts starting in 2010 have forced the agency to reduce its audit rate for corporations with $20 billion or more in assets from 98 percent to 50 percent. The Washington Post found that during the decade, the amount of “uncertain tax benefits” claimed by corporations increased 43 percent, from $164 billion in 2010 to $235 billion in 2020.
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blog July 15, 2021 Experts Weigh in on the Payoffs of Advanced Child Tax Credit Payments
During a Tuesday webinar (The Child Tax Credit in Practice: What We Know about the Payoffs of Payments) hosted by ITEP and the Economic Security Project, panelists explained why the expanded Child Tax Credit is a transformative policy that should be extended beyond 2021. They highlighted tax policy and anti-poverty research and discussed lessons learned from demonstration projects that have provided a guaranteed income to low-income families.
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July 7, 2021 The Child Tax Credit in Practice: What We Know About the Payoffs of Payments (Webinar)
Join us for a discussion on why tax credits like the Child Tax Credit (CTC) expansion are good economic policy. You’ll hear from anti-poverty experts on why Congress should extend the policy beyond 2021 and what we can learn from an initiative providing low-income mothers in Jackson, Miss., $1,000 cash on a monthly basis, no strings attached. From theory to practice and what it means for American families, this CTC webinar will provide a unique angle through which to view this transformative policy.
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blog July 7, 2021 Congress Should Follow States’ Lead on Inclusive Economic Recovery
President Joe Biden’s American Families and Jobs plans intend to “build back better” and create a more inclusive economy. To fully live up to this ideal, the final plan must include undocumented people and their families.
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blog June 25, 2021 When Tax Breaks for Retirement Savings Enrich the Already Rich
Members of Congress frequently claim they want to make it easier for working people to scrape together enough savings to have some financial security in retirement. But lawmakers’ preferred method to (ostensibly) achieve this goal is through tax breaks that have allowed the tech mogul Peter Thiel to avoid taxes on $5 billion. This is just one of the eye-popping revelations in the latest expose from ProPublica.
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brief June 17, 2021 ITIN Filer Data Gap: How Changing Laws, Lack of Data Disaggregation Limit Inclusive Tax Policy
Like U.S. citizens, noncitizens who live, work, or invest in the United States must file local, state and federal taxes. But in order to file personal income taxes, they must first be issued a processing number called an Individual Taxpayer Identification Number (ITIN) by the IRS. These numbers are issued to both legal permanent residents and nonresidents who are not eligible for Social Security numbers. ITINs do not imply immigration status, nor can they be used for immigration enforcement purposes, but they can be used to create burdensome barriers that make it difficult for ITIN holders to file taxes and to impose additional eligibility restrictions on benefits that exclude ITIN filers. The time is now to focus on integrating all ITIN filers, regardless of immigration status, into our tax policies. But a lack of information on the ITIN population creates large gaps in our understanding of these filers and the role they play in the U.S. tax system.
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blog June 11, 2021 Child Tax Credit Is a Critical Component of Biden Administration’s Recovery Package
Nearly one in seven children in the United States live in poverty and about 6 percent of all children live in deep poverty. President Joe Biden’s American Families Plan would tackle child poverty in an immediate, meaningful way. It is expected to extend the one-year Child Tax Credit (CTC) enhancements included in the March 2021 American Rescue Plan (ARP) through 2025. Next year alone, this would provide around a $110 billion collective income boost to roughly 88 percent of children in the United States.