America’s tax system overall is marginally progressive. The share of all taxes paid by the richest Americans slightly exceeds their share of the nation’s income. Conversely, the share of all taxes paid by the poorest Americans is slightly smaller than the share of the nation’s income going to that group.
Reports
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report April 11, 2018 Who Pays Taxes in America in 2018?
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report April 10, 2018 Extensions of the New Tax Law’s Temporary Provisions Would Mainly Benefit the Wealthy
This analysis finds that extending the temporary tax provisions in 2026 would not be aimed at helping the middle-class any more than TCJA as enacted helps the middle-class in 2018.
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report March 14, 2018 ITEP Testimony on “Post Tax Reform Evaluation of Recently Expired Tax Provisions”
Statement of Richard Phillips, Senior Policy Analyst
Institute on Taxation and Economic Policy
Before the Committee on Ways and Means Subcommittee on Tax Policy
Hearing on “Post Tax Reform Evaluation of Recently Expired Tax Provisions” -
report December 16, 2017 The Final Trump-GOP Tax Plan: National and 50-State Estimates for 2019 & 2027
The final Trump-GOP tax law provides most of its benefits to high-income households and foreign investors while raising taxes on many low- and middle-income Americans. The bill goes into effect in 2018 but the provisions directly affecting families and individuals all expire after 2025, with the exception of one provision that would raise their taxes. To get an idea of how the bill will affect Americans at different income levels in different years, this analysis focuses on the bill’s impacts in 2019 and 2027.
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report December 16, 2017 Multinational Corporations Would Receive $413 Billion in Tax Breaks from Congressional Repatriation Proposal
Rather than making companies pay what they owe, the final legislation reported out of conference proposes to tax accumulated offshore earnings at a rate lower than the 35 percent that they owe under current law. The final bill would tax offshore earnings being held as cash at a rate of 15.5 percent and tax all other offshore earnings at a rate of 8 percent. According to the Joint Committee on Taxation, this proposal would allow U.S. companies to collectively pay about $339 billion in taxes on their offshore earnings, rather than the roughly $752 billion that they owe, meaning that this proposal would give U.S. multinationals a tax break of $413 billion.
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report December 14, 2017 Tax Bill Would Increase Abuse of Charitable Giving Deduction, with Private K-12 Schools as the Biggest Winners
In its rush to pass a major rewrite of the tax code before year’s end, Congress appears likely to enact a “tax reform” that creates, or expands, a significant number of tax loopholes.[1] One such loophole would reward some of the nation’s wealthiest individuals with a strategy for padding their own bank accounts by “donating” to support private K-12 schools. While a similar loophole exists under current law, its size and scope would be dramatically expanded by the legislation working its way through Congress.[2]
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report December 6, 2017 National and 50-State Impacts of House and Senate Tax Bills in 2019 and 2027
The House passed its “Tax Cuts and Jobs Act” November 16th and the Senate passed its version December 2nd. Both bills would raise taxes on many low- and middle-income families in every state and provide the wealthiest Americans and foreign investors substantial tax cuts, while adding more than $1.4 trillion to the deficit over ten years. National and 50-State data available to download.
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report December 1, 2017 How True Tax Reform Would Eliminate Breaks for Real Estate Investors Like Donald Trump
The federal tax code includes several loopholes and special breaks that advantage wealthy real estate investors like President Donald Trump. Under current law, real estate investors can claim losses much more quickly and easily than other taxpayers, but they also have several methods to delay or avoid reporting any profits to the IRS.
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report November 29, 2017 Six More Things to Know About the Senate Tax Plan
A recent ITEP study concluded that the tax bill before the Senate would raise taxes on at least 29 percent of Americans and cause the populations of 19 states to pay more in federal taxes in 2027 than they do today, while providing foreign investors with more benefits than American households. This report delves deeper by breaking out impacts of different components of the Senate tax plan on U.S. taxpayers in 2019 and 2027. This approach leads to several conclusions.
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report November 18, 2017 Revised Senate Plan Would Raise Taxes on at Least 29% of Americans and Cause 19 States to Pay More Overall
The tax bill reported out of the Senate Finance Committee on Nov. 16 would raise taxes on at least 29 percent of Americans and cause the populations of 19 states to pay more in federal taxes in 2027 than they do today.
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report November 6, 2017 Analysis of the House Tax Cuts and Jobs Act
The Tax Cuts and Jobs Act, which was introduced on Nov. 2 in the House of Representatives, would raise taxes on some Americans and cut taxes on others while also providing significant savings to foreign investors.
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report November 5, 2017 American Corporations Tell IRS that 61 Percent of Their Offshore Profits Are in 10 Tax Havens
Recent revelations that a Bermuda law firm helped facilitate offshore tax avoidance has heightened awareness of the vast amount of income and wealth flowing into tax and secrecy havens worldwide. The countries through which this firm helped funnel global elites’ assets also act as tax havens for multinational corporations. Recently released data from the Internal Revenue Service show that U.S. corporations claim that 61 percent of their foreign subsidiaries’ pretax worldwide income is being earned in 10 tiny tax haven countries.
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report November 5, 2017 Fact Sheet: Nike and Tax Avoidance
Nike earned more than $10 billion in U.S. profits from 2008 to 2015 but only paid 18.6 percent in U.S. federal taxes during this time. This is just over half of the official U.S. corporate tax rate of 35 percent.
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report November 5, 2017 Fact Sheet: Facebook and Tax Avoidance
Since Facebook became a public company, its annual revenues have increased by 250 percent from around $8 billion in 2013 to nearly $28 billion last year. In the same time period, the company’s before-tax profits shot up four-and-a-half fold to $12.5 billion. But in this time it has also managed to avoid billions of dollars in U.S. taxes.
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report November 5, 2017 Fact Sheet: Apple and Tax Avoidance
Apple is the most valuable public company of all time with a market value of more than $800 billion. Last year, it cleared $45.7 billion[iii] in profits after taxes, making it the most profitable company in the Fortune 500 for the third straight year.
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report November 3, 2017 9 Things You Should Know About the Tax Debate
A Chart Book on the U.S. Tax System
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report October 26, 2017 The Domestic Production Activities Deduction: Costly, Complex and Ineffective
When the Domestic Production Activities Deduction (DPAD) became law in 2004, proponents described it as a way to help American companies manufacture in the United States and export products abroad. In recent years, the DPAD has grown into one of the largest corporate tax expenditures, with an estimated cost of more than $15 billion in 2016 and $174 billion over the next 10 years.
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report October 26, 2017 Trickle-Down Dries Up: States without personal income taxes lag behind states with the highest top tax rates
Lawmakers who support reducing or eliminating state personal income taxes typically claim that doing so will spur economic growth. Often, this claim is accompanied by the assertion that states without income taxes are booming, and that their success could be replicated by any state that abandons its income tax. To help evaluate these arguments, this study compares the economic performance of the nine states without broad-based personal income taxes to their mirror opposites—the nine states levying the highest top marginal personal income tax rates throughout the last decade.
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report October 17, 2017 Offshore Shell Games 2017
This study explores how in 2016 Fortune 500 companies used tax haven subsidiaries to avoid paying taxes on much of their income. It reveals that tax haven use is now standard practice among the Fortune 500 and that a handful of the country’s biggest corporations benefit the most from offshore tax avoidance schemes.
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report October 4, 2017 Benefits of GOP-Trump Framework Tilted Toward the Richest Taxpayers in Each State
The “tax reform framework” released by the Trump administration and Congressional Republican leaders on September 27 would affect states differently, but every state would see its richest residents grow richer if it is enacted. In all but a handful of states, at least half of the tax cuts would flow to the richest one percent of residents if the framework took effect.
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report September 14, 2017 State Tax Codes as Poverty Fighting Tools
Astonishingly, tax policies in virtually every state make it harder for those living in poverty to make ends meet. When all the taxes imposed by state and local governments are taken into account, every state imposes higher effective tax rates on poor families than on the richest taxpayers.
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report September 13, 2017 Trump Proposals Would Reduce the Share of Taxes Paid by the Richest 1%, Raise It for Everyone Else
The tax proposals released by the Trump Administration in April would reduce the share of total federal, state and local taxes paid by America’s richest 1 percent while increasing the share paid by all other income groups. This clearly indicates that the tax system would be less progressive under the president’s approach.
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report September 6, 2017 Turning Loopholes into Black Holes: Trump’s Territorial Tax Proposal Would Increase Corporate Tax Avoidance
The problem of offshore tax avoidance by American corporations could grow much worse under President Donald Trump’s proposal to adopt a “territorial” tax system, which would exempt the offshore profits of American corporations from U.S. taxes. This change would increase the already substantial benefits American corporations obtain when they use accounting gimmicks to make their profits appear to be earned in a foreign country that has no corporate income tax or has one that is extremely low or easy to avoid.
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report August 17, 2017 Nearly Half of Trump’s Proposed Tax Cuts Go to People Making More than $1 Million Annually
A tiny fraction of the U.S. population (one-half of one percent) earns more than $1 million annually. But in 2018 this elite group would receive 48.8 percent of the tax cuts proposed by the Trump administration. A much larger group, 44.6 percent of Americans, earn less than $45,000, but would receive just 4.4 percent of the tax cuts.
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report July 20, 2017 Trump’s $4.8 Trillion Tax Proposals Would Not Benefit All States or Taxpayers Equally
The broadly outlined tax proposals released by the Trump administration would not benefit all taxpayers equally and they would not benefit all states equally either. Several states would receive a share of the total resulting tax cuts that is less than their share of the U.S. population. Of the dozen states receiving the least by this measure, seven are in the South. The others are New Mexico, Oregon, Maine, Idaho and Hawaii.