Institute on Taxation and Economic Policy

Income Taxes

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State and Local Tax Contributions by Undocumented Immigrants

August 1, 2024 • By ITEP Staff

Undocumented immigrants pay taxes that help fund public infrastructure, institutions, and services in every U.S. state. Nearly 39 percent of the total tax dollars paid by undocumented immigrants in 2022 ($37.3 billion) went to state and local governments.

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Which States Allow Deductions for Federal Income Taxes Paid?

January 3, 2024 • By ITEP Staff

Three states allow an unusual income tax deduction for federal income taxes paid. Missouri and Oregon limit these deductions by capping and/or phasing out the deduction, while Alabama, offers what amounts to an unlimited deduction. These deductions are detrimental to state income tax systems on many fronts, as they offer large benefits to high-income earners […]

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What Income Tax Subsidies Do States Offer to Seniors?

April 6, 2023 • By ITEP Staff

Every state with a personal income tax offers tax subsidies for seniors that are unavailable to younger taxpayers. The best academic research suggests that the median state asks senior citizens to pay about one-third less in personal income tax than younger families with similar incomes. The majority of these subsidies are costly and poorly targeted. […]

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Which States Have Tax Cut Triggers or Phase-ins?

March 7, 2023 • By ITEP Staff

In recent years, lawmakers have been quick to push for phased-in tax cuts or cuts attached to trigger mechanisms. These policy tools push the implementation of tax cuts outside of the current budget window with a predetermined phase-in schedule or a mathematical formula tied to state revenue trends.

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How Many States Have a Flat Income Tax?

January 18, 2023 • By ITEP Staff

Two-thirds of states with broad-based personal income tax structures have a graduated rate, while one-third have flat taxes.

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Which States Allow Deductions for Federal Income Taxes Paid?

August 16, 2019 • By ITEP Staff

Six states allow an unusual income tax deduction for federal income taxes paid. These deductions are detrimental to state income tax systems on many fronts, as they offer large benefits to high-income earners and undercut the adequacy and stability of state income tax systems.

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How Do Tax Rates on the Poor Compare to Taxes on the Rich in Your State?

August 1, 2019 • By ITEP Staff

No two state tax systems are the same, but 45 states have one thing in common: Low-income residents are taxed at a higher rate than the top 1 percent.  Effective tax rates for the lowest 20 percent of families range from a high of 17.8 percent in Washington State to a low of 5.5 percent in Delaware.

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Which States Have the Highest Tax Rates for Low-income People?

July 3, 2019 • By ITEP Staff

No two state tax systems are the same, but 45 states have one thing in common: Low-income residents are taxed at a higher rate than the top 1 percent. This map shows the effective tax rates for the lowest-income 20 percent in each state--ranging from a high of 17.8 percent in Washington to a low of 5.5 percent in Delaware.

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How Does Your State Tax Income?

May 22, 2019 • By ITEP Staff

One of the most important decisions that must be made when designing a state personal income tax is whether to charge taxpayers a single flat rate on all their taxable income, or whether to levy a series of graduated rates that ask more of high-income taxpayers

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How Heavily Does Your State Rely on Individual Income Taxes?

May 17, 2019 • By ITEP Staff

Income taxes vary considerably in their structure across states, though the best taxes are fine-tuned to taxpayers’ ability-to-pay.