The Tax Cuts and Jobs Act (TCJA), signed into law by President Trump at the end of 2017, includes provisions that dramatically cut taxes and provisions that offset a fraction of the revenue loss by eliminating or limiting certain tax breaks. This page includes estimates of TCJA’s impacts in 2020.
Publications
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report August 28, 2019 TCJA by the Numbers, 2020
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report August 7, 2019 Tax Cuts and Jobs Act: A Timeline
In December 2017, federal lawmakers hastily enacted the Tax Cuts and Jobs Act. So rushed was its passage that provisions of the legislative text were scrawled in the margins. Scroll through this timeline for an in-depth look at the Tax Cuts and Jobs Act and the impact since its passage.
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brief July 26, 2019 Election 2020: Tax Policy Essentials
The nation’s tax policies and their role in economic inequality are front and center during this election cycle. For those interested in how the nation can move toward a fairer tax system and or more detailed information about progressive tax policy ideas, ITEP created this quick guide.
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brief July 17, 2019 Sales Tax Holidays: An Ineffective Alternative to Real Sales Tax Reform
Lawmakers in many states have enacted “sales tax holidays” (16 states will hold them in 2019), to provide a temporary break on paying the tax on purchases of clothing, school supplies, and other items. While these holidays may seem to lessen the regressive impacts of the sales tax, their benefits are minimal. This policy brief looks at sales tax holidays as a tax reduction device.
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brief June 27, 2019 Most Americans Live in States with Variable-Rate Gas Taxes
The flawed design of federal and state gasoline taxes has made it exceedingly difficult to raise adequate funds to maintain the nation’s transportation infrastructure. Twenty-eight states and the federal government levy fixed-rate gas taxes where the tax rate does not change even when the cost of infrastructure materials rises or when drivers purchase more fuel-efficient vehicles and pay less in gas tax. The federal government’s 18.4-cent gas tax, for example, has not increased in over 25 years. Many states have waited a decade or more since last raising their own gas tax rates.
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report June 25, 2019 BOOST Act
The BOOST Act would provide a new tax credit of up to $3,000 for single people and up to $6,000 for married couples, which would be in addition to existing tax credits. Income limits would prevent well-off households from receiving the credit. Unlike other refundable tax credit proposals, the BOOST Act would not be limited to people with earnings or people with children.
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report May 22, 2019 Understanding Five Major Federal Tax Credit Proposals
Federal lawmakers have recently announced at least five proposals to significantly expand existing tax credits or create new ones to benefit low- and moderate-income people. While these proposals vary a great deal and take different approaches, all would primarily benefit taxpayers who received only a small share of benefits from the Tax Cuts and Jobs Act.
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report May 22, 2019 Cost-of-Living Refund Act
The Cost-of-Living Refund Act would expand the Earned Income Tax Credit (EITC) for low- and moderate-income working people. The maximum EITC would nearly double for working families with children. Working people without children would receive an EITC that is nearly six times the size of the small EITC that they are allowed under current law.
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report May 22, 2019 American Family Act
The American Family Act would expand the Child Tax Credit (CTC) for low- and middle-income families. The CTC would increase from $2,000 under current law to $3,000 for each child age six and older and to $3,600 for each child younger than age six. The proposal removes limits on the refundable part of the credit so that low- and moderate-income families with children could receive the entire credit.
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report May 22, 2019 Working Families Tax Relief Act
The Working Families Tax Relief Act would expand the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) for low- and middle-income families.
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report May 22, 2019 LIFT the Middle Class Act
The LIFT (Livable Incomes for Families Today) the Middle Class Act would create a new tax credit of up to $3,000 for single people and up to $6,000 for married couples, which would be an addition to existing tax credits. Eligible taxpayers would be allowed a credit equal to the maximum amount or their earnings, whichever is less. Income limits would prevent well-off households from receiving the credit.
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report May 22, 2019 Rise Credit
The Rise Credit would replace the existing EITC. In most cases, the Rise Credit would be $4,000 for single people and $8,000 for married couples. Eligible taxpayers would be allowed a credit equal to the maximum amount or their earnings, whichever is less.
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May 10, 2019 Presentation: NCSL Task Force on State and Local Taxation, Taxing Cannabis
ITEP Research Director Carl Davis presented to the National Conference of State Legislatures (NCSL) Task Force on State and Local Taxation on approaches to cannabis taxation and the recent report Taxing Cannabis.
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April 26, 2019 ITEP Testimony Supporting H.B. No. 7415, An Act Concerning a Surcharge on Capital Gains
Comments are intended to offer some perspective on the broader tax policy context in which this proposal is being considered. We find that this proposal would help to lessen long-running inequities in Connecticut’s state and local tax law that have allowed high-income taxpayers to pay lower overall effective tax rates than most low- and middle-income families.
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report April 17, 2019 The Case for Extending State-Level Child Tax Credits to Those Left Out: A 50-State Analysis
As of 2017, 11.5 million children in the United States were living in poverty. A national, fully-refundable Child Tax Credit (CTC) would effectively address persistently high child poverty rates at the national and state levels. The federal CTC in its current form falls short of achieving this goal due to its earnings requirement and lack of full refundability. Fortunately, states have options to make state-level improvements in the absence of federal policy change. A state-level CTC is a tool that states can employ to remedy inequalities created by the current structure of the federal CTC. State-level CTCs would significantly reduce child poverty and deep poverty in all states while also addressing racial inequities that the current system has exacerbated. This report examines the poverty impacts, costs and beneficiaries of two options for a state-level CTC.
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report April 12, 2019 The Case For Progressive Revenue Policies
Income inequality is a national challenge. And inadequate federal revenue is a challenge that the nation will eventually have to reckon with. This chart book makes a strong case for why federal lawmakers should seriously consider progressive revenue-raising options.
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report April 11, 2019 Who Pays Taxes in America in 2019?
For years, Americans have been told that the rich are paying a highly disproportionate share of the nation’s taxes. Claims to that effect often focus on just one tax, the federal personal income tax, which is indeed progressive overall. But when the nation’s tax system is viewed in its entirety, it becomes clear that the reality is very different. Despite their enormous incomes and wealth, the nation’s richest taxpayers are paying a share of overall taxes that slightly exceeds their share of income.
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report April 11, 2019 Corporate Tax Avoidance Remains Rampant Under New Tax Law
For decades, profitable Fortune 500 companies have been able to manipulate the tax system to avoid paying even a dime in tax on billions of dollars in U.S. profits. This ITEP report provides the first comprehensive look at how the new corporate tax laws that took effect after the passage of the 2017 Tax Cuts and Jobs Act affects the scale of corporate tax avoidance.
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report March 6, 2019 Fairness Matters: A Chart Book on Who Pays State and Local Taxes
There is significant room for improvement in state and local tax codes. State tax codes are filled with top-heavy exemptions and deductions and often fail to tax higher incomes at higher rates. States and localities have come to rely too heavily on regressive sales taxes that fail to reflect the modern economy. And overall tax collections are often inadequate in the short-run and unsustainable in the long-run. These types of shortcomings provide compelling reason to pursue state and local tax reforms to make these systems more equitable, adequate, and sustainable.
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report February 14, 2019 The Illusion of Race-Neutral Tax Policy
It is well known that the bulk of the federal tax cuts flowed to the highest-earning households, who received the largest tax cut both in terms of real dollars and also as a share of income. But as our analysis with Prosperity Now reveals, solely examining the tax law in the context of class misses a bigger-picture story about how the nation’s public policies not only perpetuate widening income and wealth inequality, they also preserve historic and current injustices that continue to allow white communities to build wealth while denying the same level of opportunity (and often suppressing it) to communities of color.
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February 6, 2019 Shared Prosperity: A Progressive Approach to Marginal Tax Rates
Panel: In recent years, economists have been engaged in robust academic debate over the top marginal tax rate, with leading researchers estimating the optimal rate to be 73 percent or even higher. Yet despite widespread public support for raising the rate from its current level of 37 percent, many policymakers and media figures have demonstrated misunderstandings over what marginal tax rates are and how they work.
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report February 5, 2019 Progressive Revenue-Raising Options
America has long needed a more equitable tax code that raises enough revenue to invest in building shared prosperity. The Tax Cuts and Jobs Act (TCJA), enacted at the end of 2017, moved the federal tax code in the opposite direction, reducing revenue by $1.9 trillion over a decade, opening new loopholes, and providing its most significant benefits to the well-off. The law cut taxes on the wealthy directly by reducing their personal income taxes and estate taxes, and indirectly by reducing corporate taxes.
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report February 1, 2019 Congress Should Reduce, Not Expand, Tax Breaks for Capital Gains
Even though income derived from capital gains receives a special lower tax rate and is therefore undertaxed, some proponents of lower taxes on the wealthy claim that capital gains are overtaxed due to the effects of inflation. But existing tax breaks for capital gains more than compensate for any problem related to inflation. Congress should repeal or restrict special tax provisions for capital gains rather than creating even more breaks.
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report January 23, 2019 The U.S. Needs a Federal Wealth Tax
A federal wealth tax on the richest 0.1 percent of Americans is a viable approach for Congress to raise revenue and is one of the few approaches that could truly address rising inequality. As this report explains, an annual federal tax of only 1 percent on the portion of any taxpayer’s net worth exceeding the threshold for belonging to the wealthiest 0.1 percent (likely to be about $32.2 million in 2020) could raise $1.3 trillion over a decade.
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report January 23, 2019 Taxing Cannabis
State policy toward cannabis is evolving rapidly. While much of the debate around legalization has rightly focused on potential health and criminal justice impacts, legalization also has revenue implications for state and local governments that choose to regulate and tax cannabis sales. This report describes the various options for structuring state and local taxes on cannabis and identifies approaches currently in use. It also undertakes an in-depth exploration of state cannabis tax revenue performance and offers a glimpse into what may lie ahead for these taxes.