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.

• 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.

• 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.  

• blog   July 29, 2020

  Biden’s Minimum Corporate Tax Proposal: Yes, Please Limit Amazon’s Tax Breaks

  By Matthew Gardner and Steve Wamhoff 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…
• 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.

• 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.

• 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.

• 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.

• blog   July 17, 2020

  SALT Cap Repeal Has No Place in COVID-19 Legislation: National and State-by-State Data

  The Trump-GOP tax law enacted at the end of 2017 includes a $10,000 cap on the amount of state and local taxes (SALT) that people can deduct on their federal tax returns, and this is one of the few limits the law places on tax breaks for high-income people. Unfortunately, it is also the provision that some Democrats are most determined to remove.

• report   July 14, 2020

  Who Pays Taxes in America in 2020?

  Having a sound understanding of who pays taxes and how much is a particularly relevant question now as the nation grapples with a health and economic crisis that is devastating lower-income families and requiring all levels of government to invest more in keeping individuals, families and communities afloat. This year, the share of all taxes paid by the richest 1 percent of Americans (24.3 percent) will be just a bit higher than the share of all income going to this group (20.9 percent). The share of all taxes paid by the poorest fifth of Americans (2 percent) will be just a bit lower than the share of all income going to this group (2.8 percent).

• blog   July 10, 2020

  Adequately Funding the IRS Would Be One Small Step Toward Racial Equity in the Tax Code

  IRS Commissioner Charles Rettig vowed to work with Congress to explore how the federal tax system contributes to the racial wealth gap. There are at least two ways this can happen: tax policies enacted by Congress and IRS enforcement of these policies.

• blog   July 9, 2020

  Congressional Budget Office Confirms That IRS Budget Cuts Lose Money and Benefit the Rich

  Lawmakers often claim that they are “saving” taxpayers money by slashing federal spending, but the truth is that these cuts often are counterproductive and costly in the long-term. One type of budget-cutting has costs that are immediate and obvious—cuts to the IRS, the agency that collects the revenue that pays for federal spending. A new report from the Congressional Budget Office (CBO) confirms that lawmakers’ anti-government, IRS funding-cuts zeal has increased the deficit.

• report   June 30, 2020

  Republican Tax Credit Proposal Would Provide New Breaks to Tax Avoiders Like Amazon and Netflix

  While lawmakers of both parties and policy experts discuss various ways to respond to the continuing COVID-19 crisis and resulting economic downturn, Republicans in Congress are offering a new solution. Their idea, which is still being discussed, is to waive existing limits on business tax credits. This could benefit corporations that are profitable but that nonetheless pay no taxes or very little in taxes because of the many tax breaks and legal loopholes they already enjoy.

• blog   June 2, 2020

  White House Incredibly Still Believes Tax Cuts Are the Answer to America’s Problems

  White House officials continue to discuss tax cuts in response to the COVID-19 pandemic. Steve Wamhoff provides a roundup of these terrible ideas that would do little to boost investment or reach those who need it most.

• report   June 2, 2020

  Depreciation Breaks Have Saved 20 Major Corporations $26.5 Billion Over Past Two Years

  The Trump administration and its congressional allies have proposed making permanent the expensing provision in the Trump-GOP tax law. Expensing is the most extreme form of accelerated depreciation, which allows businesses to deduct the cost of purchasing equipment more quickly than it wears out. But expensing and other types of accelerated depreciation already account for a very large share of corporate tax breaks and allows many companies to pay nothing at all.

• blog   June 2, 2020

  Trump-GOP Tax Law Encourages Companies to Move Jobs Offshore–and New Tax Cuts Won’t Change That 

  New tax cuts to incentivize bringing jobs back to the United States will fail. No new tax provisions can be more generous than the zero percent rate the 2017 law provides for many offshore profits or the loopholes that allow corporations to shift profits to countries with minimal or no corporate income taxes.   

• blog   May 28, 2020

  Trump Administration Stops Pretending to Care About the Economy with Its Capital Gains Tax Proposal

  Proponents of capital gains tax breaks have always offered a weak argument that they encourage investment and thereby grow the economy. But the Trump administration is now floating a temporary capital gains tax break, which is supported by no argument at all. It would only reward investments made in the past while doing nothing to encourage new investment.

• blog   May 20, 2020

  The HEROES Act Would Correct CARES Act Business Tax Mistakes

  The Health Economic Recovery and Omnibus Emergency Solutions (HEROES) Act includes important changes to business tax provisions in the CARES Act, the most recent COVID-19 legislation enacted by Congress and…
• blog   May 20, 2020

  A Dimon Memo Will Buy You a Dime’s Worth of Social Change

  JPMorgan Chase CEO Jamie Dimon, in a May 19 memo to employees, outlines steps the company is taking to help its customers, small businesses and communities stay afloat. The part…
• report   May 15, 2020

  Major Cash Payment and Tax Provisions in the HEROES Act

  The major provisions for cash payments and tax changes in the House Democrats’ Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act would provide nearly $600 billion to individuals and households and average benefits of more than $3,000 to families in all but the highest income levels.

• brief   May 14, 2020

  Analysis: How the HEROES Act Would Reach ITIN Filers

  The HEROES Act, filed by the House Democrats this week, includes a new one-time payment of $1,200 per adult and child and extends the payment to ITIN filers and their families. The bill also includes a retroactive change to the CARES Act ensuring ITIN filers will also receive the initial payment under the CARES Act. ITEP estimates more than 4.3 million adults and 3.5 million children would benefit from this change.

• blog   May 12, 2020

  HEROES Act is an Appropriate Recession Response 

  House Democrats today introduced a proposal that responds to our staggering economic crisis with the right policies at the necessary scale. It’s a refreshing change from some of the misdirected ideas that have passed or been floated in these alarming economic times.  

• blog   May 8, 2020

  Which Workers Wouldn’t Be Helped by a Payroll Tax Cut?

  New data released today estimates 20.5 million jobs were lost in the month of April alone. Workers not currently receiving paychecks would be left out of any benefits provided by a payroll tax cut.

• blog   May 6, 2020

  Trump’s Latest Tax Break Proposals Include Everything—Except Helping Regular People 

  None of the tax proposals considered by the administration would provide help to those who need it or do much, if anything, to boost investment.

• blog   May 5, 2020

  Trump’s Payroll Tax Cut Makes Even Less Sense as Job Losses Mount

  Last August, long before COVID-19 ravaged the U.S. economy, the Trump Administration began touting a payroll tax cut as a stimulus. Now, with more than 30 million official unemployment claims…
• blog   May 5, 2020

  The Price We Pay for Amazon in Its Prime

  There is every reason to believe that Amazon will continue its tax-avoidance ways in 2020. The entirely-legal tax avoidance tools the company used to zero out its federal income tax bills over the last three years remain entirely legal today. From accelerated depreciation to the research and development tax credit to the deduction for executive stock options, Amazon’s tax avoidance tools have been blessed by lawmakers, and presidents, of all stripes.