The $1.9 trillion economic recovery plan, known as the American Rescue Plan, announced by President-elect Biden contains, among other provisions, expanded cash payments and changes to the Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC).
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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report January 15, 2021 NEW ANALYSIS: Cash and Tax Provisions in Biden’s Economic Recovery Plan
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blog January 15, 2021 Happy Double Take: A President Who Takes Economic Challenges Seriously
After a solid year of federal policy doing too little to combat staggering job loss, spiking poverty, a raging pandemic and nearly 400,000 COVID deaths, we are ready for a leader who wants to hunker down and get to work on behalf of the people. So we did a happy double take when President-elect Joe Biden outlined his economic plan last night.
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blog January 6, 2021 How the Proposed $2,000 Cash Payments Compare to the $600 Already Provided by Congress
On Dec. 28, the House of Representatives passed the Caring for Americans with Supplemental Help (CASH) Act of 2020, which would increase the cash payment recently provided by Congress from $600 per person to $2,000 per person, among other changes. New estimates from ITEP compare the impacts of $2,000 payments to $600 payments.
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news release December 21, 2020 COVID Relief Bill Will Help Families Now; Bigger, Bolder Package Needed in 2021
Following is a statement from Amy Hanauer, executive director of the Institute on Taxation and Economic Policy, regarding the COVID-19 relief deal reached Sunday night.
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report December 21, 2020 National and State-by-State Estimates of New $600 Cash Payments
The House and Senate are about to pass the first COVID-19 relief legislation since the CARES Act was enacted in March. The new relief package includes, among other provisions, cash payments of $600 per person, which is half as large as the payments provided under the CARES Act, but also extends payments to spouses and children of certain undocumented immigrants who were left out of the previous payments.
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blog December 8, 2020 A Second Round of Direct Cash Payments Could Provide an Average $1,550 to the Poorest Families
It will not magically become easier for families to put food on the table or make their next rent payment. Policymakers must act. People are struggling because they are either out of work, involuntarily working part-time, trying to financially catch up after being out of work for a spell, or squeaking by because we live in a wealthy democracy that fails to guarantee basics such as access to affordable housing, health care, food, and jobs that pay living wages.
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blog December 4, 2020 McConnell Balked at More Stimulus Aid to States, Betting Red States Wouldn’t Need It. Now?
It is December 2020. Sen. McConnell has denied states—and their residents—relief for months. Congress must act now. Even if it does, it is unlikely to provide the robust aid needed to keep communities afloat and positioned for healthy recovery. Lawmakers across the country should be prepared to return to state capitals and city halls in the new year with plans to raise revenue not just to weather this crisis, but also to invest in long-term recovery.
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blog December 4, 2020 These EITC Reforms Would Help Struggling Families Now and Address Systemic Challenges
The tepid economic recovery is leaving millions behind. The nation still has nearly 10 million jobs less than it did in February, according to the latest jobs report. The number of people living in or near poverty is rising. Twelve million workers are about to lose their unemployment insurance, roughly four in 10 people report experiencing food insecurity for the first time, and conditions are likely to deteriorate further in the weeks ahead as we brace for another deadly surge in COVID cases and new or tightened restrictions on business and personal activity.
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blog December 3, 2020 COVID-19 Containment Is Key to Recovery—So Is Another Round of Stimulus
You can learn a lot about our leaders from how they act during times of crisis. This December, we are in our 10th month of the pandemic in the United States. With COVID cases climbing, deaths exceeding 270,000 and hospitalizations surpassing 100,000 for the first time, some states have halted reopening plans and imposed new restrictions.
Containment of the virus is key to sustained economic recovery. As is another round of federal stimulus.
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news release December 2, 2020 Lame-Duck Session No Time for Perfection, but a Bold Compromise on COVID Relief Is Needed
Time for COVID relief is dwindling. A bipartisan group of lawmakers introduced a $908 billion COVID relief package on Tuesday, House Speaker Nancy Pelosi is floating a relief proposal and Sen. Mitch McConnell is circulating a wholly inadequate package. The best chance for legislation may be to include it in an omnibus appropriations bill, which Congress must pass this month. Following is a statement from Amy Hanauer, executive director of the Institute on Taxation and Economic Policy, regarding congressional negotiations over another round of economic relief.
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blog November 12, 2020 Biden’s Economic Policy Agenda Deserves Serious Debate, Not Obstruction
Obstructing policies that improve economic well-being should not be on any party’s legislative agenda, especially when so many are barely keeping their heads above water.
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blog October 22, 2020 Trump Says Taxes Will Be Too High on the 2% Who Pay More Under Biden’s Plan
The Trump campaign has failed to convince the public that large numbers of Americans would face tax hikes under Democratic presidential nominee Joe Biden’s tax plan. The claim has been widely discredited. For example, ITEP found that the federal taxes that people pay directly would rise for just 1.9 percent of taxpayers in the U.S., and that number does not vary much by state. So, Fox News and other conservative voices are trying out a new argument: Biden’s tax plan would be too burdensome for that 1.9 percent.
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blog October 13, 2020 Supreme Court Would Provide Massive Tax Cut for the Rich if It Strikes Down Affordable Care Act
If the Supreme Court strikes down the Affordable Care Act (ACA), as argued for by the Trump administration and the president’s nominee to the court, Amy Coney Barrett, one under-appreciated result will be a tax break of roughly $40 billion annually for about 3 percent of Americans, who all have incomes of more than $200,000.
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report October 7, 2020 National and State-by-State Estimates of Joe Biden’s Revenue-Raising Proposals
Former Vice President Joe Biden’s proposals to change the tax code would raise revenue directly from households with income exceeding $400,000. More precisely, Biden proposes to raise personal income taxes on unmarried individuals and married couples with taxable income exceeding $400,000, and he also proposes to raise payroll taxes on workers with earnings exceeding $400,000. Just 1.9 percent of taxpayers would see a direct tax hike (an increase in either personal income taxes, payroll taxes, or both) if Biden’s tax proposal were in effect in 2022. The share of taxpayers affected in each state would vary from a low of 0.6 percent in West Virginia to a high of 3.7 percent in Connecticut.
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blog September 24, 2020 Of Shiny Objects and Scapegoats
While the moneyed elite were dangling shiny objects, scapegoating Black and brown people, denigrating immigrants, and financing studies to convince us that poor people are the problem, they were concurrently securing policies that cut taxes primarily for the rich and profitable corporations, deregulated industry, weakened unions and attacked voting rights. This and more allowed the rich to amass even more wealth and power.
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blog September 18, 2020 New ITEP Estimates on Biden’s Proposal to Expand the Child Tax Credit
On Thursday, former Vice President Joe Biden announced that his tax plan would include a provision passed by House Democrats to temporarily expand the Child Tax Credit (CTC), potentially lifting millions of children out of poverty.
Estimates from ITEP show that this change would benefit most families with children—more than 83 million children live in households that would benefit if this was in effect in 2020—but the most dramatic boost would go to low-income families.
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blog August 25, 2020 Missed Opportunity: Flimsy Paper Touts Flawed Program
Republicans continue to tout Opportunity Zones as their main vehicle to assist poor people, most recently with a deeply flawed report from President Trump’s White House Council of Economic Advisors and a mention from Donald Trump Jr. in his opening night convention speech. The report purports to compare—as a way of cutting poverty—tax breaks for investors vs food, cash or health insurance coverage for struggling families.
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blog August 14, 2020 Action (lack thereof) on Economic Aid Reflects Longstanding Anti-Government Agenda
The biggest danger we face right now is that politicians will fail to get this health crisis under control and Americans will continue to die. The second biggest danger is that elected officials will fail to help families and communities, leading to foreclosures, evictions, and impoverishment—and also torpedoing the economy. With their inaction this week, the Senate seems determined to do both. Hold on everyone, we’re in for a sickening ride.
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blog August 5, 2020 Between the Lines: Amazon Q2 Report Hints It Will Avoid Taxes on This Year’s Record Profit Haul
The House Judiciary Committee last week held an antitrust hearing to scrutinize Amazon and other tech companies’ growing dominance. A look at the online retail giant’s new quarterly report and past tax avoidance reveals why lawmakers should be equally concerned about how the tax system allows dominant, profitable corporations to avoid most or all federal tax on their profits.
Amazon, yet again, is poised to pay little or no federal income tax on its record profits, and it appears likely to do so using entirely legal tax breaks for stock options and research and development.
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blog July 31, 2020 Sorry, States: GOP Senate Ignores Need for Federal Relief to State and Local Governments
During the Great Recession, the most ambitious state revenue-raising efforts closed just 10 percent of shortfalls and most states relied heavily on federal aid and budget cuts to balance their budgets. Of course, states can and should turn to progressive revenue-raising options now, but as the pandemic rages on, the extent of this crisis will become too significant for states and localities to handle on their own. The federal government should step in to help.
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blog July 29, 2020 Biden’s Minimum Corporate Tax Proposal: Yes, Please Limit Amazon’s Tax Breaks
A large majority of Americans want corporations to pay more taxes and Democratic presidential candidate Joe Biden has several proposals to achieve that. The newest idea is to require corporations to pay a minimum tax equal to 15 percent of profits they report to shareholders and to the public if this is less than what they pay under regular corporate tax rules. A recent article in the Wall Street Journal quotes several critics of the proposal, but none of their points are convincing.
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blog July 28, 2020 A Hero vs a Heel: No Contest
Americans are demanding policy that meets the needs of this urgent moment. There are now competing proposals from the U.S. House and Senate: One is a reasonable response to the staggering crisis we’re in. One is not.
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brief July 28, 2020 New Analysis Compares HEROES Act and HEALS Act, Disaggregates Data by Race and Income
The Health, Economic Assistance, Liability Protection and Schools (HEALS) Act released by Senate Republicans Monday includes a tax rebate that is slightly more generous than the one provided under the March CARES Act, but fails to correct most of the earlier act’s problems. House Democrats addressed these shortcomings in the May HEROES Act, a better starting place for negotiations over the next round of COVID-19 relief. ITEP has analyzed both acts to provide a detailed comparison of how the tax rebate provisions would affect families across the income spectrum and by race. Both measures would provide cash payments to a majority of individuals and families, but the HEROES Act goes farther and is more inclusive.
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blog July 21, 2020 New ITEP Report on Trump’s Payroll Tax Holiday
While the White House hasn’t clarified what it is proposing, we know that a payroll tax cut would not be well-targeted. In a new report, ITEP estimates the effects of suspending Social Security and Medicare payroll taxes for employees and employers from September 1 through the end of the year. We find that 64 percent of the benefits would go to the richest 20 percent of Americans while 24 percent of the benefits would go to the richest 1 percent.
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report July 21, 2020 An Updated Analysis of a Potential Payroll Tax Holiday
ITEP estimates that if Congress and the president eliminated all Social Security and Medicare payroll taxes paid by employers and employees from Sept. 1 through the end of the year, 64 percent of the benefits would go the richest 20 percent of taxpayers and 24 percent of the benefits would go to the richest 1 percent of taxpayers, as illustrated in the table below. The total cost of this hypothetical proposal would be $336 billion.