A strong voice for working people in federal and state tax policy debates is absolutely critical. Sound, progressive tax policies make all the difference between high-quality educational systems or crowded classrooms with limited resources. They account for the difference between structurally sound roads and bridges or potholes and other crumbling infrastructure. At the federal level, good tax policy means raising enough revenue so the nation can adequately fund child care and early education, health care, food inspection, national parks, and a clean, safe environment among other things.
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 low-income, middle-class and wealthy Americans nationally and in all 50 states.
ITEP's Federal Policy Research Priorities
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blog May 22, 2017 ITEP’s Commitment to Being a Voice for Low-, Moderate- and Middle-Income People in Tax Policy Debates
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blog May 18, 2017 Tax Avoiding Companies Well Represented at Tax Reform Hearing
Today the House Ways and Means Committee will hold its first tax reform hearing of 2017, which marks the official opening of the tax reform debate in Congress. True tax reform, if the committee sought to achieve it, could create more jobs and ensure companies are paying their fair share by cracking down on the massive offshore tax avoidance that companies engage in. Unfortunately, the panel of witnesses for today’s hearing is largely made up of representatives of various major corporations that are beneficiaries of the loopholes in our current corporate tax laws. Given this, it seems likely that these panelists will not push for a fairer corporate tax code, but rather a code that allows them to avoid even more taxes and incentivizes moving more jobs offshore.
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blog May 17, 2017 Investors and Corporations Would Profit from a Federal Private School Voucher Tax Credit
A new report by the Institute on Taxation and Economic Policy (ITEP) and AASA, the School Superintendents Association, details how tax subsidies that funnel money toward private schools are being… -
report May 17, 2017 Public Loss Private Gain: How School Voucher Tax Shelters Undermine Public Education
One of the most important functions of government is to maintain a high-quality public education system. In many states, however, this objective is being undermined by tax policies that redirect public dollars for K-12 education toward private schools.
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blog May 9, 2017 Representative John Delaney’s Bills Take the Wrong Approach on Funding Infrastructure
Lawmakers across the political spectrum recognize the need for additional spending to maintain and upgrade our nation’s transportation infrastructure. According to the Federal Highway Administration, there is a backlog of… -
blog May 5, 2017 Key Resources for Digging into the Trump and GOP Tax Reform Agenda
President Donald Trump’s tax sketch released in late April is the starting point for federal tax reform discussions. For now, the sketch includes too few details to properly analyze its… -
blog May 4, 2017 Apple: A Case Study in Why a Tax Holiday for Offshore Cash is Indefensible
The Apple corporation made waves earlier this week with its disclosure that its worldwide cash now exceeds $250 billion. Less noticed was a separate disclosure on Wednesday that the company’s… -
blog May 2, 2017 Critical Anti-Tax Evasion Legislation Under Attack
The Foreign Account Tax Compliance Act – or FATCA – is a financial disclosure and transparency law designed to crack down on international tax evasion by U.S. taxpayers who hold… -
report May 2, 2017 Foreign Account Tax Compliance Act (FATCA): A Critical Anti-Tax Evasion Tool
For years, a subset of the well-to-do and well-connected have been able to exploit the intricacies of our global financial system to shelter their income and investments from taxation. The U.S. government took a stand against this type of willful tax evasion with the passage of the Foreign Account Tax Compliance Act – or FATCA – enacted as part of the Hiring Incentives to Restore Employment (HIRE) Act of 2010.
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report April 27, 2017 What Real Tax Reform Should Look Like
If lawmakers truly want to create an environment in which economic mobility is possible for more working people, budget-busting tax cuts are the wrong way to achieve this goal. Dramatic tax giveaways would force cuts to programs that provide early education, health care, job training, affordable housing, nutrition assistance, and other vital services that promote economic mobility. Further, current tax proposals from Congress and the Trump Administration defy what most Americans would consider true reform and, instead, embrace supply-side economic theories. This policy brief outlines two sensible, broad objectives for meaningful federal tax reform and discusses six tax policies that can help achieve these objectives.
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blog April 27, 2017 President Trump’s Corporate Tax Outline: At Least He Didn’t Use a Napkin
The most complimentary thing that can be said about the corporate tax changes outlined by President Trump earlier this week is that they weren’t scribbled on a napkin. Unlike supply-side… -
press release April 26, 2017 Trump Tax Plan Revives Economic Voodoo
Following is a statement by Alan Essig, executive director of the Institute on Taxation and Economic Policy, regarding the tax plan released today by the Trump Administration. The administration has… -
blog April 25, 2017 Does a 15 Percent Corporate Tax Rate Sound Low? For Dozens of Major Corporations, Maybe Not
President Donald Trump has promised to release new details Wednesday on what he says could be “the biggest tax cut we’ve ever had.” While much is unclear about the shape… -
blog April 21, 2017 The Trump Administration Should Not Reopen Offshore Loopholes Closed by Recent Regulations
A new executive order signed by President Donald Trump on Friday asks that Treasury Secretary Steven Mnuchin review significant tax regulations issued in 2016. The broader context of the order… -
report April 13, 2017 10 Things You Should Know on Tax Day
Every year around Tax Day, ITEP updates some of its key reports to help put the nation’s tax system in proper context. This year, as people around the country march to demand President Trump release his tax returns and as policymakers consider overhauling our federal tax system, these reports are especially critical. Read 10 Things You Should Know on Tax Day.
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report April 13, 2017 Who Pays Taxes in America in 2017?
All Americans pay taxes. Most of us pay federal and state income taxes. Everyone who works pays federal payroll taxes. Everyone who buys gasoline pays federal and state gas taxes. Everyone who owns or rents a home directly or indirectly pays property taxes. Anyone who shops pays sales taxes in most states.
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report April 13, 2017 Fifteen (of Many) Reasons We Need Corporate Tax Reform
Profitable Fortune 500 companies in a range of economic sectors have been remarkably successful in manipulating the tax system to avoid paying even a dime in tax on billions of dollars in U.S. profits. This ITEP report examines a select, diverse group of 15 corporations’ tax situations to shed light on the widespread nature of corporate tax avoidance. As a group, these companies paid no federal income tax on $21 billion in profits in 2016, and they paid almost no federal income tax on $111 billion in profits over the past five years. All but one received federal tax rebates in 2016, and almost all paid exceedingly low rates over five years.
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report April 10, 2017 The U.S. Is One of the Least Taxed Developed Countries
The most recent data from the Organization for Economic Cooperation and Development (OECD) show that the United States is one of the least taxed developed nations.
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report April 10, 2017 U.S. Collects Smaller Share of Corporate Taxes Than Developed Country Average
Corporate income taxes in the United States as a share of the economy are well below the average among developed nations, according to an analysis of the most recent data from the Organization for Economic Cooperation and Development (OECD). Data from the OECD show that U.S. corporate taxes as a percentage of GDP are 2.2 percent, which is 24 percent less than the 2.9 percent weighted average among the 34 other OECD countries for which data were available.
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blog April 7, 2017 How to Shut Down Offshore Corporate Tax Avoidance, Full Stop
A new bill introduced this week by Rep. Mark Pocan (D-WI), the Tax Fairness and Transparency Act, would rip out the offshore corporate tax avoidance system by its roots. This… -
blog April 6, 2017 Two New Bills Would Plug Major Loopholes in Our Offshore Corporate Tax System
A new pair of bills introduced by Representative Lloyd Doggett (D-TX) this week would crack down on loopholes that allow corporations and individuals to avoid paying their fair share in… -
press release March 31, 2017 New Analysis Compares Tax Rates Paid by Companies Lobbying for/against Border Adjustment Tax
An Institute on Taxation and Economic Policy analysis finds that, on average, companies that are opposed to the Border Adjustment Tax pay higher tax rates than a coalition of companies… -
blog March 30, 2017 A Comparative Analysis: Tax Rates Paid by Companies for and Against the Border Adjustment Tax
It’s often noted that corporate tax reform is difficult, in part, because it creates so many winners and losers. As Congress turns its attention to federal corporate tax reform, the… -
press release March 28, 2017 Corporations Offshore Cash Hoard Grew to $2.6 Trillion in 2016
Fortune 500 Avoiding up to $767 Billion in U.S. Taxes U.S. corporations now hold a record $2.6 trillion offshore, a sum that ballooned by more than $200 billion over the… -
blog March 28, 2017 The $767 Billion Money Pot Driving Tax Reform
With the failure of legislation to repeal the Affordable Care Act, the Trump administration and Republicans lawmakers are moving on to corporate tax reform. At the heart of this debate… -
report March 28, 2017 Fortune 500 Companies Hold a Record $2.6 Trillion Offshore
All told, Fortune 500 corporations are avoiding up to $767 billion in U.S. federal income taxes by holding more than $2.6 trillion of “permanently reinvested” profits offshore. In their latest annual financial reports, 29 of these corporations reveal that they have paid an income tax rate of 10 percent or less in countries where these profits are officially held, indicating that most of these profits are likely in offshore tax havens.
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press release March 28, 2017 Corporations’ Offshore Cash Hoard Grew to $2.6 Trillion in 2016
U.S. corporations now hold a record $2.6 trillion offshore, a sum that ballooned by more than $200 billion over the last year as companies moved more aggressively to shift their profits offshore, according to a new report, Fortune 500 Companies Hold a Record $2.6 Trillion Offshore, released today by the Institute on Taxation and Economic Policy (ITEP).
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press release March 27, 2017 New 50-State Analysis of AHCA Tax Provisions
A new Institute on Taxation and Economic Policy analysis of tax provisions in the American Health Care Act provides a 50-state breakdown of how taxpayers would be affected by the… -
blog March 22, 2017 GOP Healthcare Bill Cuts Insurance Coverage for Millions to Pay for Tax Cuts for the Wealthy; ITEP State-By-State Estimates
The House GOP’s American Health Care Act is being pushed quickly through the legislative process, with a vote on the House floor scheduled for as early as Thursday. The Republican… -
report March 17, 2017 Affordable Care Act Repeal Includes a $31 Billion Tax Cut for a Handful of the Wealthiest Taxpayers: 50-State Breakdown
Congressional Republicans have proposed legislation that would repeal the Affordable Care Act (ACA), including rolling back a number of tax changes that were enacted to pay for the ACA’s health care expansions. Among these tax changes are two targeted income tax increases that took effect in 2013, each of which apply only to a small number of the wealthiest Americans: the net investment tax and additional Medicare tax. Repealing these two taxes would cost over $31 billion a year if implemented in tax year 2016, and 85 percent of the benefit from repealing these taxes would go to the best off 1 percent of Americans nationwide.
This analysis includes a 50-state breakdown of these impacts.
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blog March 9, 2017 Debunking the 35 Percent Corporate Tax Myth
For years, the number one tax policy talking point from corporate lobbyists has been the claim that the United States has the highest corporate tax rate in the world. The… -
report March 9, 2017 The 35 Percent Corporate Tax Myth
Profitable corporations are subject to a 35 percent federal income tax rate on their U.S. profits. But many corporations pay far less, or nothing at all, because of the many tax loopholes and special breaks they enjoy. This report documents just how successful many Fortune 500 corporations have been at using loopholes and special breaks over the past eight years. As lawmakers look to reform the corporate tax code, this report shows that the focus of any overhaul should be on closing loopholes rather than on cutting tax rates.
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blog March 8, 2017 A Tax Perspective on International Women’s Day
Thursday, March 8 is International Women’s Day. The day draws attention to the progress that has been made and the work that still needs to be done in advancing gender… -
blog March 7, 2017 GOP Obamacare Repeal Would Slash Taxes on the Wealthy At the Expense of Middle- and Low-Income Families
On Monday, House Republicans released legislation that would repeal or modify many of the most significant portions of the Affordable Care Act (ACA). A central theme of the GOP plan… -
blog March 1, 2017 Fact-Checking Tax Policy Points in President Trump’s Address to Congress
Despite some expectations that President Donald Trump would use his address to a joint session of Congress to lay out more details of his plan for tax legislation, the speech… -
blog February 28, 2017 What to Watch in the States: State-Federal Relationship Shifting
So far in this series on tax policy topics to watch in 2017, we’ve covered important state debates in areas such as attempts to weaken or eliminate progressive taxes and… -
blog February 22, 2017 The Border Adjustment Tax Creates More Problems Than It Solves
In recent weeks, the Republican congressional leadership’s effort to introduce a comprehensive tax reform bill has increasingly faced opposition from major business groups and skeptical lawmakers from across the aisle.… -
report February 22, 2017 Regressive and Loophole-Ridden: Issues with the House GOP Border Adjustment Tax Proposal
In the summer of 2016, House Republicans released a blueprint for tax reform that is likely to be used as the starting point for major tax legislation in 2017.[1] One of the most radical provisions is a proposal to shift the corporate tax code from a residence-based to a destination-based system through applying a border adjustment on exports and imports. This proposal has major flaws that would make it a challenge to implement. Further, it is inherently regressive, rife with loopholes and would violate international agreements.
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blog February 8, 2017 Lawmakers Should Not Use Disproven Trickle-Down Myth to Ramrod Tax Cuts for the Rich
For more than four decades, supply-side ideologues have promoted the myth that tax cuts for the wealthy are self-financing and the benefits eventually trickle down to everyone else, despite real-life… -
blog January 18, 2017 Trump Plan to Give Billions in Tax Breaks to Multinational Corporations May Have Bipartisan Support
There are a lot of troubling components of the tax reform packages being proposed by President-Elect Donald Trump and the House GOP, but one that especially stands out is the… -
report January 18, 2017 Multinational Corporations Would Receive Half a Trillion in Tax Breaks from Trump’s Repatriation Tax Proposal
One of the central questions for lawmakers looking to reform the federal tax code this year is how to address the $2.5 trillion in earnings that U.S. companies are holding offshore to avoid taxes. Lawmakers on both sides of the aisle have supported proposals that would either require or allow companies to repatriate these earnings to the United States at a discounted tax rate. These proposals have ranged from letting companies repatriate their earnings tax-free to requiring them to immediately pay a discounted rate of 20 percent. All of the proposals would give corporations a substantial tax discount and forego much-needed revenue.
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blog January 17, 2017 Congress Shouldn’t Defy Public Opinion and Good Policy by Cutting Taxes for Corporations and the Wealthy
Members of Congress have floated fundamental changes to the tax code for years, but last week marked a ramping up of these efforts as Republican Speaker of the House Paul… -
blog January 17, 2017 State of Play: The Coming Debate Over the Ryan and Trump Tax Plans
If the incoming Trump Administration and Republican-lead Congress have their way, fundamental changes to the tax code are afoot. The most important similarity between the Ryan and Trump tax plans… -
report December 7, 2016 The Federal Estate Tax: A Critical and Highly Progressive Revenue Source
For years, wealth and income inequality have been widening at a troubling pace. A recent study estimated that the wealthiest 1 percent of Americans held 42 percent of the nation’s wealth in 2012, up from 28 percent in 1989. Public policies have exacerbated this trend by taxing income earned from investments at a lower rate than income from an ordinary job and by dramatically cutting taxes on inherited wealth. Further, lawmakers have done little to stop aggressive accounting schemes designed to avoid the estate tax altogether.
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report December 7, 2016 Fact Sheet: Preserving the Estate Tax
The federal estate tax is one of our most progressive sources of revenue and a critical tool in the fight against rising wealth inequality. Congressional legislation has significantly eroded the tax over the years, and now it is levied on only the wealthiest 0.2% of estates, meaning that 99.8% of estates will have no federal estate tax liability. The estate tax should be not only preserved but restored to a historical level to increase revenues and ensure more progressivity in the tax system.
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report November 30, 2016 Privatization, Waste, and Unfunded Projects: The Problems with Trump’s Infrastructure Proposal
In his acceptance speech, President-elect Donald Trump placed a heavy emphasis on the need to rebuild the nation’s infrastructure. In theory, expanded investments in our nation’s infrastructure could generate wide support among the public and within Congress. And yet Congressional negotiations on this issue have repeatedly broken down because of disagreements over how to fund those investments. Unfortunately, a flawed proposal for new funding put forth by Mr. Trump fails to offer a realistic path forward.
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report November 28, 2016 Comprehensive Guide to “Repatriation” Proposals
Corporations falsely claim that they have to engage in offshore tax avoidance maneuvers because the U.S. corporate tax rate is too high, an argument which has unfortunately found an audience in lawmakers on both sides of the aisle. In 2017, Congress likely will evaluate a number of approaches to taxing the trillions of dollars corporations currently hold offshore. This report explains and evaluates these proposals, including a so-called repatriation holiday and deemed repatriation. Further, it explains why ending deferral of taxes on U.S. multinational corporations’ foreign earnings could halt the widespread corporate practice of funneling money to subsidiaries for the express purpose of avoiding taxes.
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report November 28, 2016 Fact Sheet: What You Need to Know About Repatriation Proposals
Fortune 500 corporations collectively have stashed $2.5 trillion in profits offshore, on which they have avoided up to $718 billion in taxes. It’s no wonder that policymakers on both sides of the aisle are weighing legislative options to either tax these profits or create an incentive for corporations to “repatriate” or bring these profits to the United States so that they are subject to taxation.
Lawmakers have introduced several “repatriation” proposals that would glean tax revenue from these offshore profits. But the only solution that will ensure corporations pay taxes on their offshore profits AND shut down the practice of stashing cash offshore is to end deferral, the tax code loophole that allows corporations to indefinitely avoid paying taxes on profits stashed offshore.
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report November 15, 2016 Fact Sheet: Comparison of House GOP Tax Plan, Trump’s Initial Tax Proposal and Trump’s Revised Tax Proposal
Chart comparing House GOP Tax Plan, Trump’s Initial Tax Proposal and Trump’s Revised Tax Proposal.
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report October 4, 2016 Offshore Shell Games 2016
This study explores how in 2015 Fortune 500 companies used tax haven subsidiaries to avoid paying taxes on much of their income. It reveals that tax haven use is now standard practice among the Fortune 500 and that a handful of the country’s wealthiest corporations benefit the most from this tax avoidance scheme.