Personal Income Taxes

blog April 12, 2023
8 Things to Know About State Taxes

As Tax Day approaches, it’s worth thinking about not only the taxes that we individually pay but the overall condition of our tax code as well. State tax codes, while…
blog March 31, 2023
Minnesota’s Tax Code Should Be Based on Ability to Pay, Not Year of Birth

Minnesota lawmakers are considering a carveout that would treat seniors much more favorably than young families. The proposal would fully exempt all Social Security income from state income tax, even for seniors with exceptionally high incomes.
blog March 23, 2023
States Prioritize Old Over Young in Push for Larger Senior Tax Subsidies

Under a well-designed income tax based on ability to pay, it is simply not necessary to offer special tax subsidies to older adults but not younger families. At the end of the day, your income tax bill should depend on what you can afford to pay, not the year you were born. It’s really as simple as that.
blog February 28, 2023
Dear Ohio: Beware the Flat Tax

The flat tax plan and others being discussed that would cut even deeper would be windfalls for the wealthy, and expensive ones at that. Families with incomes over $300,000 per year, for example, could expect to gain, as a group, about a billion dollars annually under the flat tax plan. If you asked Ohio families about their top priorities for this legislative session, it’s a safe bet that very few of them would choose a billion-dollar tax cut for this group over funding for schools, parks, and infrastructure.
blog February 22, 2023
The Five Best Tax Ideas Coming from Governors This Year

The word “tax” appears 97 times and counting in one recent summary of governors’ addresses to state legislators so far this year. The policy visions that governors are bringing, however, vary enormously. While there’s good reason to worry about tax cuts for wealthy families and the flattening or elimination of income taxes, there are at least five great tax ideas coming directly out of governors’ offices this year.
blog February 9, 2023
Why the States Have a Major Role to Play If We Want Tax Justice

With fears of gridlock in a divided Washington, tax justice champions are building momentum in other places where there’s dire need for better tax policy: the states. We can upgrade communities across the country by making 2023 a year to win tax improvements in statehouses.
blog January 18, 2023
State Lawmakers Should Break the 2023 Tax Cut Fever Before It’s Too Late

Despite mixed economic signals for 2023, including a possible recession, many state lawmakers plan to use temporary budget surpluses to forge ahead with permanent, regressive tax cuts that would disproportionately benefit the wealthy at the expense of low- and middle-income households. These cuts would put state finances in a precarious position and further erode public investments in education, transportation and health, all of which are crucial for creating inclusive, vibrant communities where everyone, not just the rich, can achieve economic security and thrive. In the event of an economic downturn, these results would be accelerated and amplified.
brief January 17, 2023
The Pitfalls of Flat Income Taxes

Flat taxes have some surface appeal but come with significant disadvantages. Critically, a flat tax guarantees that wealthy families’ total state and local tax bill will be a lower share of their income than that paid by families of more modest means.
blog November 10, 2022
Election Day in the States: Voters Deliver Important Victories for Tax Justice

Voters in Massachusetts and Colorado raised taxes on their wealthiest residents to fund schools, public transportation and school lunches for kids while making their tax codes more equitable. And voters in West Virginia defeated a proposal to deeply cut taxes, mostly for businesses, and drain the coffers of county and local governments.
blog November 9, 2022
Massachusetts Voters Score Win for Tax Fairness with ‘Fair Share Amendment’

In a significant victory for tax fairness, Massachusetts voters approved Question 1—commonly known as the Fair Share Amendment—Tuesday night with 52 percent of the vote. The new constitutional amendment creates a 4 percent surcharge on income over $1 million, and the revenue will specifically fund education and transportation projects in the Bay State.
blog October 31, 2022
Tax Foundation’s ‘State Business Tax Climate Index’ Bears Little Connection to Business Reality

The big problem with the Index is that it peddles a solution that not only falls short of the goal of generating business investment, but one that actively harms state lawmakers’ ability to provide the kinds of public goods – like good schools and modern, efficient transportation networks – that businesses need and want.
blog October 26, 2022
Measures on the November Ballot Could Improve or Worsen State Tax Codes

In a couple of weeks, voters in a handful of states will weigh in on several tax-related ballot measures that could make state tax codes more equitable and raise money…
blog April 19, 2022
Some Lawmakers Continue to Mythologize Income Tax Elimination Despite Widespread Opposition

One of the most surprising trends this legislative session is that conservative leaders and the business community joined with progressive advocates to oppose income tax repeal plans. There is a general consensus that income tax repeal is a step too far.
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 January 19, 2022
Mississippi Is the Latest in a String of States Pursuing Short-Sighted, Top-Heavy Tax Cuts

Not only is Mississippi’s latest tax proposal deeply inequitable, the state simply cannot afford it.
blog January 10, 2022
The New Trend: Short-Sighted Tax Cuts for the Rich Will Not Grow State Economies

The same legislators who touted tax cuts for the rich as solution to our problems before the pandemic are also saying tax cuts for the rich are a solution during the pandemic. Tax cuts cannot be a solution to everything, especially at a time when the richest Americans are amassing more wealth than ever.
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.
report October 4, 2021
State Income Taxes and Racial Equity: Narrowing Racial Income and Wealth Gaps with State Personal Income Taxes

10 state personal income tax reforms that offer the most promising routes toward narrowing racial income and wealth gaps through the tax code.
blog August 25, 2021
Eliminating the State Income Tax Would Wreak Havoc on Mississippi

History has repeatedly shown that such policies harm state economies, dismantle basic public services, and exacerbate tax inequities.
blog July 23, 2021
DC Exemplifies Trend of Tax Justice Victories on the Ground Despite Distractions in the Sky

This month, we watched billionaire space-racers with skyrocketing fortunes literally rocket themselves into the sky to look down on us from the largest gap they could put between themselves and…
blog May 12, 2021
Arizonans Voted to Tax the Rich. Now Lawmakers Want to Undo Most of That.

In 2018, Arizona teachers took part in a national wave of teacher walkouts, protesting inadequate education funding and some of the lowest teacher pay in the nation—direct results of the state’s penchant for deep tax cuts and its decision to levy some of the lowest tax rates in the country on high-income families.
blog February 24, 2021
Income Tax Discussion Continues in Alaska

Alaska is notoriously reliant on tax and royalty revenue from oil to fund vital public services and institutions, but declining oil prices and production levels have rendered those revenues inadequate to meet the state’s needs. ITEP analysis of potential state income tax options in Alaska shows the potential to raise between $526 million and $696 million per year yet are quite modest compared to personal income tax structures in other states. When measured relative to state residents’ incomes, any of these options would rank among the bottom five lowest state income taxes in the nation.
blog September 17, 2020
Illinois’s Flat Income Tax Amounts to a Tax Subsidy for the Wealthiest Illinoisans that Compounds Income and Wealth Inequalities

This November, Illinoisans will decide whether to amend the state constitution to allow a graduated income tax. A “yes” vote on the Illinois Fair Tax constitutional amendment will make effective legislation that will replace the current flat tax rate of 4.95 percent with graduated rates that cut taxes for those with taxable income less than $250,000 and institute higher marginal rates on taxable incomes greater than $250,000.
report September 17, 2020
Illinois’s Flat Tax Exacerbates Income Inequality and Racial Wealth Gaps

Flat or graduated personal income taxes have varying effects on the annual individual tax liabilities of taxpayers at different income levels. Less examined is how tax structures affect income inequality and racial wealth gaps. This brief illustrates how Illinois’s historic flat income tax structure compares to the proposed Fair Tax through a multi-year retrospective analysis. It shows that Illinois’s flat income tax in lieu of a graduated rate tax used by most states amounts to a tax subsidy for the wealthiest Illinoisans that compounds income inequality and racial wealth gaps.
blog March 6, 2020
Talking Taxes in Alaska

Alaska’s tax system underwent major changes in the 1970s when oil was found at Prudhoe Bay. Lawmakers repealed the state’s personal income tax (making Alaska the only state ever to do so) and began balancing the state’s budget primarily with oil tax and royalty revenue instead. But as oil prices and production levels have declined, a yawning gap has opened between state revenues and the cost of providing vital public services.