Tax Basics
These ITEP publications provide a broad overview of state tax systems as well as narrower information about specific state tax policies.
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report April 25, 2012 How Federal Tax Reform Can Help or Hurt State and Local Governments
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… -
report March 6, 2012 Alaska Senate State Affairs Committee Regarding SB 29, The Alaska Tax Break Transparency Act
My testimony today deals with Senate Bill 29, which would take an important first step toward achieving these goals by requiring regular scrutiny of Alaska “tax expenditures”—that is, the various… -
report February 15, 2012 Arthur Laffer Regression Analysis is Fundamentally Flawed, Offers No Support for Economic Growth Claims
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… -
report February 8, 2012 “High Rate” Income Tax States Are Outperforming No-Tax States
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.… -
brief October 1, 2011 Tax Expenditures: Spending By Another Name
Lawmakers often provide targeted tax cuts to groups of individuals or corporations in the form of special tax breaks–including exemptions, deductions, exclusions, credits, deferrals, and preferential tax rates. These tax breaks have long been called “tax expenditures” because they are essentially government spending programs that happen to be administered through the tax code. However, tax expenditures are usually less visible than other types of public spending and are therefore harder for policymakers and the public to evaluate. This policy brief surveys the difficulties created by tax expenditures, and describes options for better integrating them into the normal budget process.
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report September 22, 2011 State Tax Codes As Poverty Fighting Tools (2011)
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… -
brief September 1, 2011 Taxes and Economic Development 101
One of the main economic goals of most state policymakers is, quite sensibly, to attract businesses to their state. But, all too often, these policymakers have been encouraged to think that tax cuts make the best bait. A growing body of literature reminds us that taxes themselves create public infrastructure that spurs investment and improves the quality of life for businesses and workers alike. Communities that illustrate a strong commitment to public institutions like good schools, well-built transportation systems, and quality police and fire protection will ultimately have an advantage in attracting new business investment. This policy brief looks at the complicated role taxes play in economic development and discusses why low-tax strategies are not effective.
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brief September 1, 2011 Fighting Back: Accountable Economic Development Strategies
Even though there is little evidence that cutting taxes and reducing public investments actually spurs economic development, lawmakers across the country have been persuaded to give tax breaks to companies in hopes of encouraging a thriving economic climate in their state. Some lawmakers are wising up to the idea that subsidies don’t work. But for policymakers who insist on offering incentives, there are some important, simple, and concrete steps that can be taken to ensure that subsidies aren’t allowed to go unchecked. This policy brief offers guidance on best practices for alternatives to providing blanket tax breaks.
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brief September 1, 2011 Examining Economic Development Research
State and local lawmakers face enormous pressure to attract and retain business investment–and all too often, anti-tax advocates will argue that tax cuts are the best approach to economic development, usually armed with “research” studies that conclude slashing taxes is necessary for economic development. But all too often, these studies are based on shoddy assumptions that make their results unreliable. This policy brief offers guidance on how to critically examine studies that claim that taxes must be cut in order to spur economic development.
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brief August 1, 2011 How State Personal Income Taxes Work
The personal income tax can be–and usually is–the fairest of the main revenue sources relied on by state and local governments. When properly structured, it ensures that wealthier taxpayers pay their fair share and provides lower tax rates on middle-income families. The personal income tax can be used to offset regressive sales, excise and property taxes. This policy brief explains the basic workings of the income tax.
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brief August 1, 2011 How State Tax Changes Affect Your Federal Taxes: A Primer on the “Federal Offset”
State lawmakers frequently make claims about how proposed tax changes would affect taxpayers at different income levels. Yet these lawmakers routinely ignore one important consequence of their tax reform proposals: the effect of state tax changes on their constituents’ federal income taxes. Wealthier taxpayers can use the federal income tax to partially offset their state and local income and property taxes. This “federal offset” has important implications for how state tax changes affect people. This policy brief explains this important but often-forgotten link between state and federal taxes.
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brief August 1, 2011 How Property Taxes Work
The property tax is the oldest major revenue source for state and local governments. At the beginning of the twentieth century, property taxes represented more than eighty percent of state and local tax revenue. While this share has diminished over time as states have introduced sales and income taxes, the property tax remains an important mechanism for funding education and other local services. This policy brief discusses why property is taxed and how property taxes are calculated.
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brief August 1, 2011 Tax Policy Nuts and Bolts: Understanding the Tax Base and Tax Rate
This policy brief explains two basic, but important tax policy terms- the tax base and tax rate. Since these concepts are often confusing, having a grasp on the ins and outs of tax bases and rates will help provide a better understanding of how all state and local taxes work.
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brief August 1, 2011 Introduction to ITEP’s Tax Incidence Analysis
Everyone agrees that tax “fairness” is important–even though there is often disagreement on what fairness means. A well-informed debate on who should pay the most taxes must start by assessing who actually does pay the most–and the least. Too often taxes are studied only with an eye towards tax rates instead of an understanding of how taxes impact people depending on their income. Tax incidence analyses answer basic questions by measuring how taxpayers at different income levels are affected by the current tax system and various tax reform alternatives. This policy brief provides a basic introduction to using ITEP’s tax incidence analyses.
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brief August 1, 2011 How State Corporate Income Taxes Work
A robust corporate income ensures that profitable corporations that benefit from public services pay their fair share towards the maintenance of those services, just as working people do.. More than forty states currently levy a corporate income tax. This policy brief explains why corporations should be taxed and the basic workings of the corporate tax.
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report May 19, 2011 ITEP’s Testimony on Tax Expenditure Procedural Reform
My testimony today focuses on House Bill 5737, which would enact a variety of reforms designed to enhance the level of scrutiny applied to new tax credits, deductions, exemptions, and… -
report March 3, 2011 The ITEP Guide to Fair State and Local Taxes
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… -
report December 22, 2010 Dear Wall Street Journal: No Need to File a Missing Persons Report, Oregon’s High-Income Taxpayers Have Not “Vanished”
The Wall Street Journal recently published an editorial suggesting that a 2 percentage point increase in Oregon’s top income tax rate caused up to 10,000 wealthy Oregonians to flee the… -
report December 15, 2010 How the Bush Tax Cuts Affect State Revenues
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… -
report September 15, 2010 Census Data Reveal Washington’s Fundamental Tax Mismatch: Washington is a Low Tax State, But Not for Families Living in Poverty
Recently released data from the Census Bureau confirms that overall Washington could be considered a “low tax state.” However, families living near or below the poverty line generally do not… -
report September 15, 2010 Census Data Reveal Texas’ Fundamental Tax Mismatch: Texas is a Low Tax State, But Not for Families Living in Poverty
Recently released data from the Census Bureau confirms that overall Texas could be considered a “low tax state.” However, families living near or below the poverty line generally do not… -
report September 15, 2010 Census Data Reveal Tennessee’s Fundamental Tax Mismatch: Tennessee is a Low Tax State, But Not for Families Living in Poverty
Recently released data from the Census Bureau confirms that overall, Tennessee could be considered a “low tax state.” However, families living near or below the poverty line generally do not… -
report September 15, 2010 Census Data Reveal Florida’s Fundamental Tax Mismatch: Florida is a Low Tax State, But Not for Families Living in Poverty
Recently released data from the Census Bureau confirms that overall, Florida could be considered a “low tax state.” However, families living near or below the poverty line generally do not… -
report September 15, 2010 Census Data Reveal Arkansas Fundamental Tax Mismatch: Arkansas is a Low Tax State, But Not for Families Living in Poverty
Recently released data from the Census Bureau confirms that overall, Arkansas could be considered a “low tax state.” However, families living near or below the poverty line generally do not… -
report March 25, 2010 Maryland’s Millionaire Migration Debate: Understanding the Relevance of the New Jersey Migration Studies
As the debate over extending the Maryland “millionaires’ tax” continues, numerous lawmakers and advocates have recently begun to look toward New Jersey’s experience with its own “halfmillionaires’ tax” to help…