Institute on Taxation and Economic Policy (ITEP)

Reports

429 posts
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Low Tax for Who?

• By Meg Wiehe

Annual state and local finance data from the Census Bureau are often used to rank states as "low" or "high" tax states based on taxes collected as a share of state personal income. But focusing on a state's overall tax revenues overlooks the fact that taxpayers experience tax systems very differently. In particular, the poorest 20 percent of taxpayers pay a greater share of their income in state and local taxes than any other income…

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State Tax Codes As Poverty Fighting Tools

• By Meg Wiehe

New Census Bureau data released this month show that the share of Americans living in poverty remains high, despite other signs of economic recovery. The national 2012 poverty rate of 15 percent is essentially unchanged since 2010 , but still 2.5 percentage points higher than pre-recession levels. This means that in 2012, 46.5 million, or about 1 in 6 Americans, lived in poverty.1 The poverty rate in most states also held steady with five states…

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Washington is a “Low Tax State” Overall, But Not for Families Living in Poverty

• By Meg Wiehe

Read the Report in PDF Form See all “Low Tax for Who?” states New data from the Census Bureau appear to lend support to Washington’s reputation as a “low tax state,” ranking it 36th nationally in taxes collected as a share of personal income.1 But focusing on the state’s overall tax revenues has led many […]

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Texas is a “Low Tax State” Overall, But Not for Families Living in Poverty

• By Meg Wiehe

Read the Report in PDF Form See all “Low Tax for Who?” states New data from the Census Bureau appear to lend support to Texas’ reputation as a “low tax state,” ranking it 40th nationally in taxes collected as a share of personal income. 1 But focusing on the state’s overall tax revenues has led […]

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Tennessee is a “Low Tax State” Overall, But Not for Families Living in Poverty

• By Meg Wiehe

Read the Report in PDF Form See all “Low Tax for Who?” states New data from the Census Bureau appear to lend support to Tennessee’s reputation as a “low tax state,” ranking it 49th nationally in taxes collected as a share of personal income.1 But focusing on the state’s overall tax revenues has led many […]

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South Dakota is a “Low Tax State” Overall, But Not for Families Living in Poverty

• By Meg Wiehe

Read the Report in PDF Form See all “Low Tax for Who?” states New data from the Census Bureau lend support to South Dakota’s reputation as a “low tax state,” ranking it 50th nationally in taxes collected as a share of personal income, the lowest overall tax state.1 But focusing on the state’s overall tax […]

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Florida is a “Low Tax State” Overall, But Not for Families Living in Poverty

• By Meg Wiehe

New data from the Census Bureau appear to lend support to Florida's reputation as a "low tax state," ranking it 45th nationally in taxes collected as a share of personal income.1 But focusing on the state's overall tax revenues has led many observers to overlook the fact that different taxpayers experience Florida's tax system very differently. In particular, the poorest 20 percent of Florida residents pay significantly more of their income (13.2 percent) in state…

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Arizona is a “Low Tax State” Overall, But Not for Families Living in Poverty

• By Meg Wiehe

New data from the Census Bureau appear to lend support to Arizona's reputation as a "low tax state," ranking it 35th nationally in taxes collected as a share of personal income.1 But focusing on the state's overall tax revenues has led many observers to overlook the fact that different taxpayers experience Arizona's tax system very differently. In particular, the poorest 20 percent of Arizona residents pay significantly more of their income (12.9 percent) in state…

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Tax Expenditure Reports: A Vital Tool with Room for Improvement

• By Carl Davis

State and local tax codes include a huge array of special tax breaks designed to accomplish almost every goal imaginable: from encouraging homeownership and scientific research, to building radioactive fallout shelters and caring for "exceptional" trees. Despite being embedded in the tax code, these programs are typically enacted with tax policy issues like fairness, efficiency, and sustainability only as secondary considerations. Accordingly, these programs have long been called "tax expenditures." They are essentially government spending…

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Tax Incentives: Costly for States, Drag on the Nation

• By Carl Davis

Tax incentives are intended to spur economic growth that would not have otherwise occurred. More specifically, these narrowly targeted tax breaks are usually offered in an attempt to convince businesses to relocate, hire, and/or invest within a state's borders.

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Sales Tax Holidays: An Ineffective Alternative to Real Sales Tax Reform

• By Meg Wiehe

Sales taxes are an important revenue source, comprising close to half of all state revenues in 2012. But sales taxes are also inherently regressive because the lower a family's income, the more of its income the family must spend on things subject to the tax.

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Undocumented Immigrants’ State and Local Tax Contributions (2013)

• By Matthew Gardner, Meg Wiehe

In the public debates over federal immigration reform, much has been made of the argument that undocumented immigrants would be a drain on federal, state and local government resources if granted legal status under reform. But it is also true that the 11.2 million undocumented immigrants living in the United States are already taxpayers, and that their local, state and federal tax contributions would increase under reform.

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Testimony: Evaluating the Motor Vehicle Fuel Tax Reforms in DC’s Bill 20-199

• By Carl Davis

Mr. Chairman and members of the committee, thank you for the opportunity to testify today. My name is Matt Gardner. I am the Executive Director of the Institute on Taxation and Economic Policy (ITEP), a Washington-DC-based nonprofit research group. ITEP's research focuses on federal and state tax policy with an emphasis on sustainability and fairness in the tax laws.

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Don’t Blame the Gas Tax for High Gas Prices

• By Carl Davis

American consumers are keenly aware of the price of gasoline, but uninformed about what drives that price. When asked about the federal gas tax, for example, six in ten Americans said the tax rate goes up every year. In reality, the federal gas tax hasn't budged from its 18.4 cent rate in almost twenty years, and roughly half the states haven't seen their gas tax rates change in a decade or more.

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5% Cut in Indiana’s Income Tax is Stacked in Favor of the Wealthy

• By Carl Davis

Indiana Governor Mike Pence and the state's legislative leaders recently announced a budget agreement that, among other things, phases the state's flat personal income tax rate down from 3.4 percent to 3.23 percent by 2017.

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Indiana Senate’s Income Tax Cut: Just as Lopsided as the Governor’s

• By Carl Davis

The Indiana Senate Appropriations Committee recently approved a budget cutting the state's personal income tax rate from 3.4 percent to 3.3 percent beginning in 2015. Although this proposal costs less than one-third the amount of Governor Pence's preferred cut (which would take the rate down to 3.06 percent), it would still reduce state revenues by roughly $150 million each year.

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Kansas House and Senate Proposals Set the Stage for Tax Hikes on Poor and Middle-Income Families

• By Meg Wiehe

Earlier this year, Kansas Governor Sam Brownback proposed another round of personal income tax cuts (on top of those he signed into law last year).1 The House and Senate each responded with their own tax cut plans and are expected to reconcile their differences this week. To date, much attention has been given to the major difference between the House and Senate plans -- the Senate bill includes permanently preserving a sales tax rate hike…

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Governor Jindal’s Tax Plan Would Increase Taxes on Poorest 60 Percent of Louisianans

• By Meg Wiehe

In recent weeks, Louisiana Governor Bobby Jindal has released many details of the tax plan he first sketched out in January. The Governor proposes a revenue-neutral "tax swap" that would repeal all state income taxes and increase the state's sales tax among other changes. A new ITEP analysis of the Governor's plan shows that, if fully implemented in 2013, the plan would increase taxes on the poorest sixty percent of Louisianans overall, while providing large…

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States with “High Rate” Income Taxes are Still Outperforming No-Tax States

• By Carl Davis

Lawmakers in about a dozen states are giving serious consideration to either cutting or eliminating their state personal income taxes. In each case, these proposals are being touted as a way to boost economic growth.

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Laffer’s New Job Growth Factoid is All Rhetoric and No Substance

• By Carl Davis

A new talking point printed on the opinion page of The Wall Street Journal is proving irresistible to state lawmakers looking for an excuse to reduce or eliminate their states' income taxes: A new analysis by economist Art Laffer for the American Legislative Exchange Council finds that, from 2002 to 2012, 62% of the three million net new jobs in America were created in the nine states without an income tax, though these states account…

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IDACorp– Biggest Winner Under Property Tax Plan– Pays Nothing in State Income Taxes

• By Carl Davis

Idaho Governor Butch Otter and the state legislature are seriously considering repealing the personal property tax on business equipment. The governor claims that repealing the tax would help the state's economy, but says that he is "painfully aware" that repeal would dramatically cut into the revenues that many local governments depend on to provide public services. 1 The tax generates $141 million in revenue every year for cities, counties, and public schools. As a result,…

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Kansas Governor’s New Plan Increases Taxes on Poor Yet Slashes Revenue by $340 Million

• By Meg Wiehe

Kansas Governor Sam Brownback proposed, for the second straight year, major tax changes during his State of the State speech. These new changes include lowering the tax rates to 1.9 and 3.5 percent, eliminating itemized deductions for mortgage interest and property taxes paid, and raising the sales tax.

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More Inaccuracies, Bigger Omissions: Arthur Laffer’s Newest Study of Income Tax Repeal Falls Short

• By Carl Davis

Arthur Laffer's consulting firm--Arduin, Laffer & Moore Econometrics (ALME)--has released a report purporting to show that North Carolina could usher in an economic boom if it repeals its personal and corporate income taxes and replaces them primarily with a much larger sales tax. Prepared for the Civitas Institute, "More Jobs, Bigger Paychecks" relies on an economic analysis that is fundamentally flawed to the point of making it entirely useless.

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Proposal to Eliminate Income Taxes Amounts to a Tax Increase on Bottom 80 Percent of Louisianans

• By Meg Wiehe

Louisiana Governor Bobby Jindal has said that he supports the elimination of the state's personal and corporate income taxes. In fiscal year 2012, Louisiana collected nearly $3 billion in revenues from its personal and corporate income taxes.

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Previewing Tax Reform in the States: National Trends and State-specific Prospects for 2013

• By Meg Wiehe

Following an election that left half the states with veto-proof legislative majorities, 39 states with one-party rule and more than a dozen with governors who put tax reform high on their agendas, 2013 promises to be a big year for changes to state tax laws.