As one of the most prosperous countries in human history, we have enough resources for our collective needs. By better taxing corporations and the wealthiest, we can generate revenue to improve family security, strengthen our communities, and reduce the debt too.
Inequality and the Economy
ITEP analyzes the overall fairness of the current tax system and proposals to change it. We help lawmakers and the public decide what tax policies will create the kind of economy Americans want and examine how public policy perpetuates economic inequality. See ITEP’s most recent analysis of the total tax system Who Pays Taxes in America in 2019? and ITEP’s explainer on the need for progressive tax revenue.
blog March 14, 2023
Worried About the Debt? Tax the Rich
blog January 11, 2023
“Fair Tax” Plan Would Abolish the IRS and Shift Federal Taxes from the Wealthy to the Rest of Us
The “Fair Tax” bill would impose a 30 percent federal sales tax on everything we buy – groceries, cars, homes, health care – and lead to a giant tax shift from the well-off to everyone else.
blog April 21, 2022
Biden’s Proposals Would Fix a Tax Code that Coddles BillionairesBillionaires can afford to pay a larger share of their income in taxes than teachers, nurses and firefighters. But our tax code often allows them to pay less, as demonstrated…
blog March 1, 2022
Taxes Should be Part of the State of the Union Agenda
President Biden should elevate his tax and revenue proposals which remain essential if we are to pay for environmental restoration, health priorities and peacekeeping, the front-burner items that may dominate the speech.
blog October 18, 2021
Federal Tax Reform Would be a Step in the Right Direction for Millennials of Color
Currently, millennials of color are worse off than their parents when it comes to wealth expectations. So, if one of the goals of federal policymakers is to reduce racial income and wealth disparities, the proposals outlined are a good start. Tax reforms included in the budget package making its way through Congress would help by boosting incomes and making raising children more affordable—two things that would help millennials of color thrive in today’s economy.
blog October 18, 2021
The Role of Census Data in Policy and Racial Equity
The Census has changed the way it asks questions in the past and can choose to do so again in the future. As the Biden administration makes data a central part of its plan to achieve greater racial equity, it has an opportunity to implement research-backed changes that will improve our understanding of race and ethnicity in the United States, and in turn, our ability to draw meaningful conclusions about how our tax laws impact tax filers of different races.
brief October 14, 2021
Investment Income and Racial Inequality
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.
blog October 14, 2021
Limiting Tax Breaks for Capital Gains Would Mitigate the Racial Wealth Gap
The racial wealth and income gaps are the results of centuries of government policies favoring the accumulation of wealth among white communities while marginalizing communities of color. Policy solutions that are race-forward, meaning they remedy past and ongoing racial inequities, can also address broader social inequities.
blog October 4, 2021
State Income Tax Reform Can Bring Us Closer to Racial Equity
To pave the way for a more racially equitable future, states must move away from poorly designed, regressive policies that solidify the vast inequalities that exist today.
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.
blog April 27, 2021
Inclusive Child Tax Credit Reform Would Restore Benefit to 1 Million Young ‘Dreamers’
As the Biden administration maps out the next steps in America’s response to the coronavirus pandemic—through what is now being called the American Families Plan—it should make sure a proposed expansion of the Child Tax Credit (CTC) includes undocumented children who have largely been left out of federal relief packages this past year. Prior to 2017 Tax Cut and Jobs Act, all children regardless of their immigration status received the credit as long as their parents met the income eligibility requirements. This change essentially excluded around 1 million children and their families.
report April 20, 2021
Not Worth Its SALT: Tax Cut Proposal Overwhelmingly Benefits Wealthy, White Households
A previous ITEP analysis showed the lopsided distribution of SALT cap repeal by income level. The vast majority of families would not benefit financially from repeal and most of the tax cuts would flow to families with incomes above $200,000.
This report builds on that work by using a mix of tax return and survey data within our microsimulation tax model to estimate the distribution of SALT cap repeal across race and ethnicity. It shows that repealing the SALT cap would be the latest in a long string of inequitable policies that have conspired to create the vast racial income and wealth gaps that exist today.
report April 8, 2021
A Proposal to Simplify President Biden’s Campaign Plan for Personal Income Taxes and Replace the Cap on SALT Deductions
In this paper, we describe a tax policy idea that would simplify the proposals President Biden presented during his campaign to raise personal income taxes for those with annual incomes greater than $400,000. Our proposal would replace the cap on state and local tax (SALT) deductions with a broader limit on tax breaks for the rich that would raise more revenue than the personal income tax hikes that Biden proposed during his campaign. Our proposal would also achieve Biden’s goals of setting the top rate at 39.6 percent and raising taxes only on those with income exceeding $400,000.
April 8, 2021
The High Cost of Corporate Tax Avoidance (Webinar)
When communities thrive, so do corporations. But when profitable corporations build their empires by exploiting the tax code, it is workers, the environment and our communities—not CEOs or shareholders—that are harmed. Amazon posted its highest U.S. profit ever for 2020, an unprecedented year defined by a pandemic. Yet the company sheltered more than half its profits from corporate taxes—legally. While the company may be one of the most recognizable tax avoiders, it’s not an outlier.
blog March 1, 2021
Senator Warren Introduces Federal Wealth Tax Legislation
With the onslaught of news about billionaire wealth soaring while low- and moderate-income families have trouble making ends meet, a federal wealth tax makes good economic and fiscal sense—and the public supports it. One poll found that 64 percent of respondents favor the idea, including a majority of Republicans.
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.
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 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 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 March 24, 2020
COVID-19 and the Case for Race-Forward Economic Policy Prescriptions
Unconscious bias runs deep. Legislative proposals to assuage the exploding economic crisis are advancing and changing quickly, but initial GOP proposals are consistent with the nation’s long history of ostensibly race-neutral policies that are discriminatory in their outcomes.
blog March 10, 2020
Taxes in a Time of Coronavirus
Some problems can only be solved when public officials have the resources to act. Today’s public health crisis is that kind of problem. Unfortunately, the Trump administration’s deep tax cuts leave our health infrastructure knee-capped, just when we need it most.
blog March 2, 2020
The Latest Wildly Misleading Argument Against Taxing the Rich
Anti-tax activists’ convoluted claims that the rich pay too much in taxes broke new ground with an op-ed published last week in the Wall Street Journal. Penned by former Texas Sen. Phil Gramm and John Early, a former official of the Bureau of Labor Statistics, the piece is particularly misleading. The so-called evidence in support of their argument against raising taxes on the rich fails to correctly calculate effective tax rates.
blog February 12, 2020
2021 Trump Budget Continues 40-Year Trickle-Down Economic Agenda
The 2017 Tax Cuts and Jobs Act may as well have been called the Promise for Austerity Later Act.
blog January 14, 2020
White House Council of Economic Advisers Crows about Lowest-Income Americans Being Infinitesimally “Wealthier”
When the White House Council of Economic Advisors last week tweeted that the poorest 50 percent of Americans’ wealth is growing 3 times faster than the wealth of the top 1 percent, we were skeptical. As it turns out, the CEA’s tweet is a reminder that the poorest 50 percent wealth grew twice as fast during Barack Obama’s second term than it has under Trump, but to this day remains far below its pre-recession share and significantly less than what it was 30 years ago.
blog January 13, 2020
Time to Throw Cucumbers
A basic understanding and idea of fairness is a trait we share with intelligent primates, which is precisely why more than two years ago as Congress was debating the Tax Cuts and Jobs Act, the American public disapproved of the tax bill.