Tax Reform Options and Challenges
New ITEP Report Explains How the Biden Administration Can Act on Its Own to Fix Our Tax Code
March 25, 2022 • By Steve Wamhoff
The Biden administration should revise regulations from the TCJA to enforce the law as it was written and passed by Congress, not as big banks and multinational corporations have lobbied for it to be enforced.
What the Biden Administration Can Do on Its Own, Without Congress, to Fix the Tax Code
March 25, 2022 • By Steve Wamhoff
The Biden administration has several options to address tax reform even when Congress is unable or unwilling to help.
Women’s History Month is a Reminder that Sensible Tax Policy is Central to Women’s Economic Security
March 24, 2022 • By Brakeyshia Samms
Women’s History Month is a chance to remember what happens for women when tax policy becomes more progressive, boosts income, and helps make raising a family more affordable.
Key Reform in Build Back Better Act Would Close Loophole Used by the Rich To Avoid Funding Healthcare
November 18, 2021 • By Joe Hughes
The proposal in the Democrats’ Build Back Better proposal applies the 3.8 percent Net Investment Income Tax to all profit distributions from partnerships and S-corporations so that this income of wealthy pass-through business owners no longer escapes.
House Ways and Means Provisions to Raise Revenue Would Significantly Improve Our Tax System But Fall Short of the President’s Plan
September 15, 2021 • By Steve Wamhoff
High-income people and corporations would pay more than they do today, which is a monumental change. But some wealthy billionaires like Jeff Bezos would continue to pay an effective rate of zero percent on most of their income, and American corporations would still have some incentives to shift profits offshore.
The Child Tax Credit in Practice: What We Know About the Payoffs of Payments (Webinar)
July 7, 2021 • By ITEP Staff
Join us for a discussion on why tax credits like the Child Tax Credit (CTC) expansion are good economic policy. You’ll hear from anti-poverty experts on why Congress should extend the policy beyond 2021 and what we can learn from an initiative providing low-income mothers in Jackson, Miss., $1,000 cash on a monthly basis, no strings attached. From theory to practice and what it means for American families, this CTC webinar will provide a unique angle through which to view this transformative policy.
Congress Should Follow States’ Lead on Inclusive Economic Recovery
July 7, 2021 • By Meg Wiehe
President Joe Biden's American Families and Jobs plans intend to “build back better” and create a more inclusive economy. To fully live up to this ideal, the final plan must include undocumented people and their families.
When Tax Breaks for Retirement Savings Enrich the Already Rich
June 25, 2021 • By Steve Wamhoff
Members of Congress frequently claim they want to make it easier for working people to scrape together enough savings to have some financial security in retirement. But lawmakers’ preferred method to (ostensibly) achieve this goal is through tax breaks that have allowed the tech mogul Peter Thiel to avoid taxes on $5 billion. This is just one of the eye-popping revelations in the latest expose from ProPublica.
Income Tax Increases in the President’s American Families Plan
May 25, 2021 • By ITEP Staff, Matthew Gardner, Steve Wamhoff
President Biden’s American Families Plan includes revenue-raising proposals that would affect only very high-income taxpayers.[1] The two most prominent of these proposals would restore the top personal income tax rate to 39.6 percent and eliminate tax breaks related to capital gains for millionaires. As this report explains, these proposals would affect less than 1 percent of taxpayers and would be confined almost exclusively to the richest 1 percent of Americans. The plan includes other tax increases that would also target the very well-off and would make our tax system fairer. It would raise additional revenue by more effectively enforcing tax…
SALT Cap Repeal Would Worsen Racial Income and Wealth Divides
April 20, 2021 • By Carl Davis, ITEP Staff, Jessica Schieder
A bipartisan group of 32 House lawmakers banded together to form the “SALT Caucus,” demanding elimination of the SALT cap. None of their arguments in favor of repeal change the fact that it would primarily benefit the rich and, according to new research, exacerbate racial income and wealth disparities.
Biden’s Minimum Corporate Tax Proposal: Yes, Please Limit Amazon’s Tax Breaks
July 29, 2020 • By ITEP Staff, Matthew Gardner, Steve Wamhoff
A large majority of Americans want corporations to pay more taxes and Democratic presidential candidate Joe Biden has several proposals to achieve that. The newest idea is to require corporations to pay a minimum tax equal to 15 percent of profits they report to shareholders and to the public if this is less than what they pay under regular corporate tax rules. A recent article in the Wall Street Journal quotes several critics of the proposal, but none of their points are convincing.
New Analysis Compares HEROES Act and HEALS Act, Disaggregates Data by Race and Income
July 28, 2020 • By ITEP Staff, Jessica Schieder, Meg Wiehe, Steve Wamhoff
The Health, Economic Assistance, Liability Protection and Schools (HEALS) Act released by Senate Republicans Monday includes a tax rebate that is slightly more generous than the one provided under the March CARES Act, but fails to correct most of the earlier act’s problems. House Democrats addressed these shortcomings in the May HEROES Act, a better starting place for negotiations over the next round of COVID-19 relief. ITEP has analyzed both acts to provide a detailed comparison of how the tax rebate provisions would affect families across the income spectrum and by race. Both measures would provide cash payments to a…
Addressing the COVID-19 Economic Crisis: Advice for the Next Round
April 7, 2020 • By Steve Wamhoff
Americans need many things right now beyond tax cuts or cash payments. But for people whose incomes have declined or evaporated, money is the obvious, immediate need to prevent missed rent or mortgage payments, skipped hospital visits and other cascading catastrophes. So, what should Congress do next to get money to those who need it?
How the Tax Rebate in the Senate’s Bill Compares to Other Proposals
March 25, 2020 • By Steve Wamhoff
Congress is poised to pass a $2 trillion plan that includes $150 billion in fiscal aid to states, $150 billion in health care spending, large expansions of unemployment compensation and more. These measures are clearly needed as the economy teeters on the brink. As the Senate votes on its stimulus/COVID19 bill, one provision ITEP has deeper insights on is the payments to households in the form of tax rebates. ITEP has provided several analyses over the past few days showing that the rebate in the current bill is an improvement over a previous GOP proposal but still falls short of…
Why the GOP Senate Bill Fails to Address the Crisis, and Why a Democratic Bill Looks More Promising
March 20, 2020 • By ITEP Staff, Meg Wiehe, Steve Wamhoff
National and state-by-state data available for download By Steve Wamhoff and Meg Wiehe On Thursday night, Senate Majority Leader Mitch McConnell released a bill that reportedly cost more than $1 trillion, most of which would go toward breaks for corporations and other businesses. A provision in the bill to provide payments to families would cost […]
How Democratic Presidential Candidates Would Raise Revenue
February 19, 2020 • By Steve Wamhoff
One of the biggest problems with the U.S. tax code in terms of fairness is that investment income, which mostly flows to the rich, is taxed less than the earned income that makes up all or almost all of the income that working people live on.
Washington Is Finally Having the Right Conversation about Taxes
February 4, 2020 • By Amy Hanauer
Presidential candidates and some elected officials are finally talking about bold tax policy ideas that would increase taxes and raise revenue. This is a dramatic shift from when a radical, right-wing narrative dominated the public debate. Republicans redefined “fiscal responsibility” as fewer taxes and less government, peddled supply-side economic theories, and denied the clear evidence that tax cuts were adding to our nation’s deficits.
ITEP Urges IRS to End SALT Workaround Scheme for Businesses
January 29, 2020 • By Carl Davis
A new IRS proposal could once again allow wealthy business owners to use state charitable tax credits–including tax credits for donating to support private and religious K-12 schools–to dodge the federal government’s $10,000 cap on state and local tax (SALT) deductions.
Corporate Tax Avoidance Is Mostly Legal—and That’s the Problem
December 19, 2019 • By Steve Wamhoff
As usual, corporate spokespersons and their allies are trying to push back against ITEP’s latest study showing that many corporations pay little or nothing in federal income taxes. One way they respond is by stating that everything they do is perfectly legal. This is an attempt by the corporate world to change the subject. The entire point of ITEP’s study is that Congress has allowed corporations to avoid paying taxes, and that this must change.
Corporate Tax Avoidance in the First Year of the Trump Tax Law
December 16, 2019 • By ITEP Staff, Lorena Roque, Matthew Gardner, Steve Wamhoff
Profitable Fortune 500 companies avoided $73.9 billion in taxes under the first year of the Trump-GOP tax law. The study includes financial filings by 379 Fortune 500 companies that were profitable in 2018; it excludes companies that reported a loss.
House Democrats’ Latest Bill on SALT Deductions Would Mean Bigger Tax Cuts for the Rich
December 11, 2019 • By Steve Wamhoff
ITEP estimates show that if the House Democrats' proposal was in effect in 2022, it would have a net cost of $81 billion in that year alone. The estimates also show that 51 percent of the benefits would go to the richest 1 percent of taxpayers in the U.S. Clearly, lawmakers concerned about the SALT cap need to go back to the drawing board.
How Congress Can Stop Corporations from Using Stock Options to Dodge Taxes
December 10, 2019 • By ITEP Staff
The stock option rules in effect today create a problem because they allow corporations to report a much larger expense for this compensation to the IRS than they report to investors. The result is that corporations can report larger profits to investors but smaller profits to the IRS, undermining the fundamental fairness of the tax system.
There’s a lot more to Corporate Tax Reform than Tax Rates
October 30, 2019 • By Lorena Roque
Several Democratic candidates have proposed raising the statutory corporate tax rate from its current level of 21 percent to fund their spending proposals. Political reporters and observers may read a great deal into the different corporate rates proposed by candidates, but the truth is that rates mean very little on their own.
Benefits of a Financial Transaction Tax
October 28, 2019 • By Jessica Schieder, Lorena Roque, Steve Wamhoff
A financial transaction tax (FTT) has the potential to curb inequality, reduce market inefficiencies, and raise hundreds of billions of dollars in revenue over the next decade. Presidential candidates have proposed using an FTT to fund expanding Medicare, education, child care, and investments in children’s health. Any of these public investments would be progressive, narrowing resource gaps between the most vulnerable families and the most fortunate.
Emmanuel Saez and Gabriel Zucman’s New Book Reminds Us that Tax Injustice Is a Choice
October 15, 2019 • By Steve Wamhoff
Cue Emmanuel Saez and Gabriel Zucman. In their new book, The Triumph of Injustice, the economists, who already jolted the world with their shocking data on exploding income inequality and wealth inequality, tell us to stop acting like we are paralyzed when it comes to tax policy. There are answers and solutions. And in about 200 surprisingly readable pages, they provide them.
In addition to distributional analyses of existing and proposed tax law, ITEP provides policy recommendations for lawmakers to build a more equitable tax code, from progressive revenue-raising options to corporate tax reform to establishing a model for a wealth tax.
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