House Speaker Paul Ryan plans to visit a Boeing factory in Washington State tomorrow to promote the GOP’s ideas for tax reform, which include a deep cut in the corporate tax rate, while House Ways and Means Chairman Kevin Brady is bringing the same message today to employees of AT&T in Dallas. What is unclear is how much lower taxes for these companies can possibly go.
Tax Reform Options and Challenges
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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blog August 23, 2017 GOP Leaders Tout Corporate Tax Cuts at Boeing and AT&T, Companies that Already Have Single-Digit Tax Rates
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ITEP Work in Action August 17, 2017 Maine Center for Economic Policy: Maine Millionaires Primary Recipients of Proposed Trump Tax Breaks
New analysis from the Institute on Taxation and Economic Policy (ITEP) shows Maine’s millionaires would get an average tax cut of $135,220 under President Trump’s proposed tax plan. Maine millionaires represent only 0.3 percent of all Maine households, yet would receive more than a quarter of all tax breaks.
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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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blog July 28, 2017 Art Laffer and Stephen Moore’s Misleading Case for the Trump Tax Cuts
Art Laffer and Stephen Moore recently penned an op-ed in the Wall Street Journal in which they called on state and local policymakers to support the Trump tax cuts. They claimed that the Trump plan would provide a significant boost to state and local tax revenues, thereby allowing states with large budget deficits to “regain fiscal health.”
State and local lawmakers should not be fooled by these claims. The reality is that Trump’s tax cuts are more likely to worsen state and local fiscal health than improve it.
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blog July 27, 2017 GOP Leaders in Congress and the White House Set Out Goals for Tax Reform that Their Plans Fail to Meet
Today Republican leaders in Congress and officials from the White House released a joint statement on tax reform, claiming that “the single most important action we can take to grow our economy and help the middle class get ahead is to fix our broken tax code for families, small business, and American job creators competing at home and around the globe.”
Unfortunately, the proposals they have put forward so far do not address any such goals.
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blog July 26, 2017 Trump Touts Tax Cuts for the Wealthy as a Plan for Working People
Unless the administration takes a radically different direction on tax reform from what it has already proposed, its tax plan would be a monumental giveaway to the top 1 percent. The wealthiest one percent of households would receive 61 percent of all the Trump tax breaks, and would receive an average of $145,400 in 2018 alone.
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ITEP Work in Action July 21, 2017 Florida Policy Institute: The Growing Divide: Federal Tax Plan Would Give Massive Tax Cuts to Wealthy Floridians as the Poorest Americans Continue to Struggle
The federal tax plan broadly outlined by the current administration would do very little to create opportunities for Floridians struggling to make ends meet. Instead, the tax plan would provide massive tax cuts for Florida’s highest income earners, accordingly to a recent report by the Institute on Taxation and Economic Policy (ITEP). Broadly outlined, the plan is likely to make an already unfair tax system that favors the wealthy even worse.
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ITEP Work in Action July 21, 2017 New Jersey Policy Perspectives: Trump Tax Plan: A Boon for the Wealthiest New Jerseyans
A federal tax package based on President Trump’s April outline would fail to deliver on its promise of mostly helping the middle class, instead showering most of its help to the richest 1 percent, according to a new 50-state analysis from the Institute on Taxation and Economic Policy released today.
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ITEP Work in Action July 21, 2017 Hope Policy Institute: Mississippi’s Wealthiest Get the Most Benefit under New Federal Tax Cut Proposal
New research from the Institute on Taxation and Economic Policy (ITEP) looks at the potential effects of a tax cut proposal from the Trump Administration on families in the 50 states. The tax cut proposal would reduce the tax rate on corporate income from 35 percent to 15 percent, would repeal the estate tax, replace the current income tax brackets with three brackets at 10 percent, 25 percent, and 35 percent, eliminate most itemized deductions, except charitable giving and home mortgage interest, and create a new tax credit for childcare expenses, among other things.
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ITEP Work in Action July 21, 2017 Kentucky Center for Economic Policy: Trump Tax Plan Would Be a Windfall for Only the Wealthiest Kentuckians
The wealthiest Kentuckians would be winners from the $4.8 trillion in federal tax cuts President Donald Trump has proposed, as shown by a new report from the Institute on Taxation… -
ITEP Work in Action July 20, 2017 West Virginia Center on Budget & Policy: New Report Shows Trump Tax Plan Benefits Wealthy, Fails to Help Middle Class
A new analysis from the Institute on Taxation and Economic Policy reveals a federal tax reform plan based on President Trump’s April outline would fail to deliver on its promise of largely helping middle-class taxpayers, showering 61.4 percent of the total tax cut on the richest 1 percent nationwide. In West Virginia, the top 1 percent of the state’s residents would receive an average tax cut of $51,600 compared with an average tax cut of $720 for the bottom 60 percent of taxpayers in the state.
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ITEP Work in Action July 20, 2017 Economic Progress Institute: Trump Tax Plan Would Mostly Benefit Wealthiest Rhode Island Taxpayers
A new analysis from the Institute on Taxation and Economic Policy reveals a federal tax reform plan based on President Trump’s April outline would fail to deliver on its promise of largely helping middle-class taxpayers, showering 61.4 percent of the total tax cut on the richest 1 percent nationwide. In Rhode Island, the top 1 percent of the state’s residents would receive an average tax cut of $86,610 compared with an average tax cut of just $430 for the bottom 60 percent of taxpayers in the state.
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ITEP Work in Action July 20, 2017 Maine Center for Economic Policy: Trump Tax Plan Would Give Richest Maine Taxpayers an Average $53,000 Tax Cut and Trigger Deep Cuts to Federal Dollars for Maine
A new analysis from the Institute on Taxation and Economic Policy reveals a federal tax reform plan based on President Trump’s April outline would fail to deliver on its promise of helping middle-class taxpayers, showering three out of every five dollars of the total tax cut on the richest 1 percent nationwide. In Maine, the top 1 percent of the state’s residents would receive an average tax cut of $53,000 compared with an average tax cut of $400 for the bottom 60 percent of taxpayers in the state.
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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.
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report July 17, 2017 Comment Letter on Tax Reform to Senate Finance Chairman
This letter outlines ITEP’s two broad objectives for meaningful federal tax reform and discusses six recommendations that would achieve them.
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blog July 6, 2017 Why We Need to End the Era of Anonymous Shell Corporations
What do terrorists, opioid and human traffickers, corrupt government officials and tax evaders have in common? They all depend on the secrecy provided by anonymous shell corporations to allow them to finance and profit from their crimes. Momentum is building in the House and Senate to pass legislation that would strike against illicit finance in the United States and around the world by bringing an end to the anonymity provided by U.S. incorporation.
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report June 29, 2017 Trump Budget Uses Unrealistic Economic Forecast to Tee Up Tax Cuts
The Trump Administration recently released its proposed budget for Fiscal Year 2018. The administration claims that its proposals would reduce the deficit in nearly every year over the next decade before eventually achieving a balanced budget in 2027, but the assumptions it uses to reach this conclusion are deeply flawed. This report explains these flaws and their consequences for the debate over major federal tax changes.
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blog June 16, 2017 The GOP Health Plan Cuts Medicaid to Lower Taxes for the Richest 3 Percent
The bill passed by the House of Representatives last month to repeal the Affordable Care Act (ACA) is the most unpopular legislation in decades.
Lawmakers should reverse course and take the necessary time to put together legislation that would preserve or, better yet, improve access to health care. But this isn’t likely to happen because at its core, the American Health Care Act isn’t truly health care reform. It is tax cuts that disproportionately benefit the rich shrouded in legislative provisions that would weaken the existing health care law.
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blog June 15, 2017 Which States Benefit from the Tax Cuts in the GOP Health Plan?
Congressional Republicans’ plans to repeal the two largest tax increases on individuals that were enacted as part of the Affordable Care Act (ACA) would disproportionately benefit residents of Connecticut, New York, the District of Columbia and 10 other states. The remaining states would receive a share of the tax cuts that is less than their share of the total U.S. population.
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blog June 12, 2017 The Best Way to Radically Simplify Tax Filing
One of the supposed selling points of the House GOP’s “Better Way” tax plan is that it will make the tax system so simple that you could do your taxes on a postcard. The reality, however, is that their promised postcard is a deception that would require numerous additional pages of worksheets to fill out. A better solution to making tax preparation simpler is called “return-free filing.” It does not just reduce your work to filling out a postcard, it could eliminate it altogether.
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blog June 8, 2017 Kansas May Have Saved Us All
Sitting in the National Museum of American History in Washington, DC, hidden in the jumble of Americana like Thomas Jefferson’s desk, Michelle Obama’s inaugural gown and the ruby slippers worn in the Wizard of Oz, is a napkin with a drawing on it. Probably one of the least known exhibits in the museum, this napkin, quietly hiding behind glass lest some child wandering from a school group wipe his nose on it, has on several occasions destroyed the finances of the federal government and several state governments, most recently in Kansas.
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blog May 25, 2017 Congressional Hearing Highlights Problems with the Border Adjustment Tax
The debate over the so-called border adjustment tax (or BAT) took center stage this week when the House Ways and Means Committee held its first hearing on the topic. Despite strong support by the House Republican leadership and the Chairman of the Ways and Means Committee, Rep. Kevin Brady, the proposal faced an onslaught of criticism during the hearing from invited witnesses and members of both parties.
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blog May 22, 2017 ITEP’s Commitment to Being a Voice for Low-, Moderate- and Middle-Income People in Tax Policy Debates
A strong voice for working people in federal and state tax policy debates is absolutely critical. Sound, progressive tax policies make all the difference between high-quality educational systems or crowded classrooms with limited resources. They account for the difference between structurally sound roads and bridges or potholes and other crumbling infrastructure. At the federal level, good tax policy means raising enough revenue so the nation can adequately fund child care and early education, health care, food inspection, national parks, and a clean, safe environment among other things.
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blog May 5, 2017 Key Resources for Digging into the Trump and GOP Tax Reform Agenda
President Donald Trump’s tax sketch released in late April is the starting point for federal tax reform discussions. For now, the sketch includes too few details to properly analyze its… -
report April 27, 2017 What Real Tax Reform Should Look Like
If lawmakers truly want to create an environment in which economic mobility is possible for more working people, budget-busting tax cuts are the wrong way to achieve this goal. Dramatic tax giveaways would force cuts to programs that provide early education, health care, job training, affordable housing, nutrition assistance, and other vital services that promote economic mobility. Further, current tax proposals from Congress and the Trump Administration defy what most Americans would consider true reform and, instead, embrace supply-side economic theories. This policy brief outlines two sensible, broad objectives for meaningful federal tax reform and discusses six tax policies that can help achieve these objectives.