States
Four Tax Ideas for Jobs-Focused Governors
July 15, 2012 • By ITEP Staff
As the nation's governors gather in Williamsburg, Virginia this week, their focus is on their Chairman's initiative, Growing State Economies. Too often, however, a governor's knee-jerk response to a lagging economy is to start cutting taxes, even though state tax cuts offer a demonstrably low economic bang-for-the-buck, for a number of reasons.
How Federal Tax Reform Can Help or Hurt State and Local Governments
April 25, 2012 • By Matthew Gardner
Federal tax reform can affect state and local taxes in several ways. The federal government can create, repeal or change tax expenditures in a way that is passed on to the states because virtually every state has tax rules linked to the federal rules. The federal government can subsidize state and local governments’ ability to […]
Arthur Laffer Regression Analysis is Fundamentally Flawed, Offers No Support for Economic Growth Claims
February 15, 2012 • By Carl Davis
A November 2011 report from the Oklahoma Council for Public Affairs (OCPA) in partnership with Arduin, Laffer & Moore, a consulting group headed by Arthur Laffer, explains the method that Laffer has been using to make the case that tax cuts lead to economic growth. The results he offers appear impressive, but his methods are […]
“High Rate” Income Tax States Are Outperforming No-Tax States
February 8, 2012 • By Carl Davis
Don’t Be Fooled by Junk Economics With the economy lagging, lawmakers seeking to reduce or eliminate state personal income taxes are touting their proposals as tools for boosting economic growth. Of particular note are the governors of Kansas and Oklahoma, both of whom justified income tax repeal in their State of the State speeches by […]
Building a Better Gas Tax
December 14, 2011 • By Carl Davis
State gas taxes are currently levied in every state, and are the most important source of transportation revenue under the control of state lawmakers. In recent years, however, state gas taxes have fallen dramatically relative to the rising cost of asphalt, concrete, labor, and everything else that goes into maintaining a transportation network. The results […]
Corporate Tax Dodging In the Fifty States, 2008-2010
December 7, 2011 • By Matthew Gardner
In October, South Carolina Governor Nikki Haley suggested that gradually repealing the state’s corporate income tax should be a priority for lawmakers in 2012. Haley’s idea was alarming, but hardly surprising: in the past year, governors in Arizona and Florida have proposed similar plans, and lawmakers in a number of other states have moved to […]
Corporate Taxpayers & Corporate Tax Dodgers
November 13, 2011 • By Matthew Gardner
Earlier this year, Berkshire Hathaway Chairman Warren Buffett made headlines by publicly decrying the stark inequity between his own effective federal tax rate (about 17 percent, by his estimate) and that of his secretary (about 30 percent). The resulting media firestorm has drawn welcome attention to unfair tax breaks that allow the richest Americans to […]
State Tax Codes As Poverty Fighting Tools (2011)
September 22, 2011 • By Meg Wiehe
This report presents a comprehensive view of anti-poverty tax policy decisions made in the states in 2011 and offers recommendations every state should consider to help families rise out of poverty. States can jump-start their anti-poverty efforts by enacting one or more of four proven and effective tax reforms: refundable state Earned Income Tax Credits, […]
Sales Tax Holidays: A Boondoggle
July 14, 2011 • By Meg Wiehe
Sales taxes are among the most important--and most unfair--taxes levied by state governments. Sales taxes accounted for a third of state taxes in 2011, but sales taxes are regressive, falling far more heavily on low- and middle- income taxpayers than on the wealthy. In recent years, lawmakers thinking they might lessen the impact of these taxes have enacted "sales tax holidays" that provide temporary sales tax breaks for purchases of clothing, computers, and other items. This policy brief looks at sales tax holidays as a tax reduction device.
States Should Not Allow Amazon.com to Bully Them into Forgoing Sales Tax Reform
April 14, 2011 • By Carl Davis
In just the last few weeks, Arkansas and Illinois joined New York, North Carolina, and Rhode Island in enacting legislation requiring some online retailers, like Amazon.com, to collect sales taxes on purchases made by their state’s residents. Vermont’s House of Representatives recently passed similar legislation, and Arizona, California, Connecticut, Hawaii, Massachusetts, Minnesota, Mississippi, Missouri, New […]
Don’t Give Up on Pease: States Can Decouple from Recent Federal Tax Cuts for Wealthy Itemizers
April 10, 2011 • By Meg Wiehe
In 2011, thirty one states and the District of Columbia allow a group of income tax breaks known as “itemized deductions” (Figure 1). Itemized deductions are designed to help defray a wide variety of personal expenditures that affect a taxpayer’s ability to pay taxes, including charitable contributions, extraordinary medical expenses, mortgage interest payments and state […]
In It for the Long Haul: Why Concerns over Personal Income Tax “Volatility” Are Overblown
March 31, 2011 • By Matthew Gardner
The precipitous drop in state tax collections during the recent recession has prompted some observers to argue that relying on volatile state taxes is a recipe for budgetary disaster. The most recent version of this argument, made by the Wall Street Journal’s Robert Frank, suggests that the personal income tax in particular is highly volatile, […]
Topsy-Turvy: State Income Tax Deductions for Federal Income Taxes Turn Tax Fairness on its Head
March 10, 2011 • By Carl Davis, Meg Wiehe
The budget outlook for state governments is bleak. Despite evidence that revenues are rebounding, there is a general acknowledgement that ?broad fiscal conditions remain fragile. The need for public investments—particularly health care for low-wage or unemployed workers and their families—is greater than ever. An increasing number of states are struggling to keep their fiscal year […]
The ITEP Guide to Fair State and Local Taxes
March 3, 2011 • By Carl Davis, Matthew Gardner, Meg Wiehe
The ITEP Guide to Fair State and Local Taxes, released in March of 2011, offers citizens, activists, journalists, and policymakers a detailed primer on state and local tax policy. The guide explains the differences between progressive, flat, and regressive taxes — and why you should care. It covers the full range of taxes that states […]
A Capital Idea
January 15, 2011 • By Carl Davis, Meg Wiehe
The budget outlook for the states is improving, but uncertain. In this context, states must find ways to generate additional revenue that create neither additional responsibilities for individuals and families struggling to make ends meet nor additional distortions in the economy as a whole. For eight states – Arkansas, Hawaii, Montana, New Mexico, North Dakota, […]
How the Bush Tax Cuts Affect State Revenues
December 15, 2010 • By Matthew Gardner
Less than one month from now, federal tax cuts pushed through by President George W. Bush are scheduled to expire—and Congressional tax writers have spent much of this year debating how these tax cuts should be extended. This debate has huge implications for the nation’s fiscal health, but also has often-overlooked implications for state revenues. […]
The Good, the Bad and the Ugly: 2010 State Tax Policy Changes
December 15, 2010 • By Carl Davis, Meg Wiehe
Compared to previous years, the budget outlook for the states improved only slightly in 2010 and virtually every state continued to face a budget shortfall. As a result, the overwhelming majority of state policymakers were put in the unenviable position of having to address some very difficult budgetary issues. Lawmakers were forced to make the […]
Credit Where Credit is (Over) Due: Four State Tax Policies Could Lessen the Effect that State Tax Systems Have in Exacerbating Poverty
September 15, 2010 • By Meg Wiehe
The ongoing recession has had an unrelenting impact on families and communities in every state across the country. Millions of Americans are without work and in many cases those with jobs are experiencing reduced work hours and wages. New poverty figures from the US Census suggest that the road to economic security will be a […]
“Writing Off” Tax Giveaways: How States Can Help Balance Their Budgets by Reforming or Repealing Itemized Deductions
August 24, 2010 • By Carl Davis, Meg Wiehe
“Writing Off” Tax Giveaways examines options for reforming itemized deductions in the thirty-one states, plus DC, that offer such deductions. The study, released on August 24, 2010, focuses on five potential reforms: repealing itemized deductions entirely, capping the maximum size of itemized deductions, converting itemized deductions to a credit, instituting a phase-out for upper-income taxpayers, […]
Leaving Money on the Table: “Federal Offset” Provides Incentive for States to Rely on Progressive Income Taxes
April 10, 2010 • By ITEP Staff
Seven states—Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming—have chosen to make up for the lack of an income tax by increasing their reliance on general sales taxes.1 The result is an “upside down” state tax system, which imposes higher effective tax rates on middle- and low-income families than on the best-off taxpayers. But […]
Who Pays? A Distributional Analysis of the Tax Systems in All 50 States 3rd Edition
November 18, 2009 • By Carl Davis, Matthew Gardner
Who Pays? is a comprehensive analysis of state and local tax systems in all fifty states. The study, released on November 18, 2009, shows that on average, state and local tax systems require the poorest taxpayers to pay the highest effective tax rates. Read the Full Report (PDF)
Recent Assertions about State Tax Increases Don’t Hold Much Water [Revised Aug 7, 2009]
August 7, 2009 • By ITEP Staff
A more careful examination of Internal Revenue Service (IRS) data for the period from 1997 to 2006 reveals a far different picture, however. They show that the number of “rich” taxpayers (federal income tax filers with adjusted gross incomes (AGI) in excess of $200,000) rose considerably in Connecticut, New Jersey, and New York over the […]
A Capital Idea: Repealing State Tax Breaks for Capital Gains Would Ease Budget Woes and Improve Tax Fairness
March 15, 2009 • By ITEP Staff
This report explains what capital gains are, how they are treated for tax purposes, and who typically receives them. It also details the consequences of providing preferential tax treatment for capital gains income for states’ budgets, taxpayers, and economies in nine key states. Lastly, it responds to claims about both the relationship between capital gains […]
Latest IRS Data Reveal Fundamental Mismatches in the States
August 15, 2008 • By ITEP Staff
Data released late last week by the Internal Revenue Service (IRS) indicate that 10 states have greater concentrations of reported income among their very wealthiest residents than the country as a whole. Unfortunately, the tax systems in those ten states generally ignore that very important reality. Of those ten states: • four lack a broad-based […]
Combined Reporting – How Does Your State Stack Up?
April 15, 2007 • By ITEP Staff
Over the past few years, a number of states, seeking to address longstanding flaws in their corporate income taxes and significant declines in the revenue they yield, have instituted a major reform: combined reporting. Combined reporting requires multi-state corporations to report the income earned by both the parent corporation and all of its subsidiaries and […]
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