Income Taxes
Five Issues for States to Watch in the Federal Tax Debate
• By Dylan Grundman O'Neill, Kamolika Das, Marco Guzman, Miles Trinidad, Neva Butkus
This post covers five particularly notable provisions for states: increasing deductions for state and local taxes (SALT) paid, allowing more generous tax write-offs for businesses, offering new avenues for capital gains tax avoidance to people contributing to private school voucher funds, carving tips and overtime out of the tax base, and re-upping Opportunity Zone tax breaks for wealthy investors.
Analysis of Tax Provisions in the House Reconciliation Bill: National and State Level Estimates
• By Carl Davis, Jessica Vela, Joe Hughes, Steve Wamhoff
The poorest fifth of Americans would receive 1 percent of the House reconciliation bill's net tax cuts in 2026 while the richest fifth of Americans would receive two-thirds of the tax cuts. The richest 5 percent alone would receive a little less than half of the net tax cuts that year.
The House Tax Plan, By the Numbers
• By Carl Davis
The House of Representatives unveiled a sprawling piece of tax legislation earlier this week that would extend temporary tax changes enacted in 2017 and layer various kinds of tax cuts and increases on top. The JCT analysis makes clear that the House tax plan would be regressive, meaning it would offer larger tax cuts as a share of income to high-income taxpayers than to either middle-class or working-class families. It also makes clear that most…
Trump’s Proposed Higher Tax Rate on the Richest Taxpayers Would Affect Very Little of Their Income
• By Carl Davis, Steve Wamhoff
President Donald Trump has proposed allowing the top rate to revert from 37 percent to 39.6 percent for taxable income greater than $5 million for married couples and $2.5 million for unmarried taxpayers. But many other special breaks in the tax code would ensure that most income of very well-off people would never be subject to Trump’s 39.6 percent tax rate.
Maryland’s New Budget Boosts Tax Revenue and Equity
• By Miles Trinidad
The final budget adopted by the Maryland General Assembly shows progress in advancing tax equity in the state while boosting state revenues to address the state’s budget deficit. To help close a $3.3 billion budget deficit, Maryland legislators enacted much-needed tax reforms and progressive revenue raisers that help meet the state’s needs while making the […]
Trump 2025 Tax Law: Research and Resources
• By ITEP Staff
Want to know more about the tax and spending megabill that President Trump recently signed into law? We've got you covered.
Ending Direct File Program is a Gift to the Tax-Prep Industry That Will Cost Taxpayers Time and Money
• By Jon Whiten
The Trump administration reportedly plans to shutter the IRS Direct File program before it has a chance to get fully off the ground, taking away a free option for people to file their tax returns directly to the agency. Ending Direct File is another gift from this administration to large corporations, this time to the multibillion-dollar tax prep industry that profits from you filing your taxes.
A Windfall for the Wealthy: A Distributional Analysis of Mississippi HB 1
• By Aidan Davis, Dylan Grundman O'Neill, Neva Butkus
Mississippi lawmakers have approved the most radical and costly change to the state’s personal income tax system to date. House Bill 1 ultimately eliminates the state's personal income tax and cuts state revenues by nearly $2.7 billion a year when fully implemented. This deeply regressive legislation will create a windfall for the wealthiest residents of the poorest state in the nation while simultaneously jeopardizing the state’s ability to fund public services that support Mississippians and…
Advantaging Affluence: A Distributional Analysis of Missouri HB 798’s Uneven Tax Cuts for Wealth and Work
• By Aidan Davis, Carl Davis, Dylan Grundman O'Neill, Eli Byerly-Duke, Matthew Gardner
Missouri House Bill 798 would reduce personal and corporate income tax rates, fully eliminate taxes on capital gains income from sale of assets, and eliminates the state’s modest Earned Income Tax Credit that assists many working people in lower-paid jobs. HB 798 would radically transform Missouri’s income tax code into a system that privileges income from wealth over income from work, leaving many middle-income families to pay a higher income tax rate than wealthy people…
Tip Exemptions Have No Place in State Income Tax
• By Eli Byerly-Duke, Nick Johnson
Creating a special tax break for tipped income – as at least 20 states are considering this spring – would harm state budgets, encourage tax avoidance, and fail to reach the vast majority of low- and middle-income workers.
Proposed Missouri Tax Shelter Would Aid the Wealthy, Anti-Abortion Centers Alike
• By Carl Davis
In Missouri, donations to anti-abortion pregnancy resource centers come with state tax credits valued at 70 cents on the dollar. One bill currently being debated in the state would increase that matching rate to 100 percent—that is a full, state-funded reimbursement of gifts to anti-abortion groups.
Trump’s Address to Congress Obscures His Actual Tax Agenda
• By Amy Hanauer
In last night’s address to Congress, President Trump spent more time insulting Americans, lying, and bragging than he did talking about taxes. But regardless of what President Trump and Elon Musk talk about most loudly and angrily, there is one clear policy that they and the corporations and billionaires that support them will try hardest […]
Mississippi Considers Deep Tax Cuts Amidst Budget and Economic Uncertainty
• By Neva Butkus
At a time when states across the country are forecasting deficits or anticipating slowing revenue growth, Mississippi lawmakers are debating deeply regressive and expensive tax cuts that would overwhelmingly benefit their state’s richest residents.
Wide-Ranging 2025 State Tax Debates Come into Focus
• By Aidan Davis
In the face of immense uncertainty around looming federal tax and budget decisions, many of which could threaten state budgets, state lawmakers have an opportunity to show up for their constituents by raising and protecting the revenue needed to fund shared priorities. Lawmakers have a choice: advance tax policies that improve equity and help communities thrive, or push tax policies that disproportionately benefit the wealthy, drain funding for critical public services, and make it harder…
Turning IRS Agents to Deportation Will Reduce Public Revenues
• By Carl Davis, Jon Whiten
The Trump Administration’s plan to turn IRS agents into deportation agents will result in lower tax collections in addition to the harm done to the families and communities directly affected by deportations.
The (Mostly Untapped) Power of Local Income Taxes
• By Rita Jefferson
Local income taxes can be an important progressive revenue raiser, as they ask more of higher-income households and are connected to ability to pay. They can raise substantial revenue to fund key public services to make cities and regions better off.
Maryland Gov. Wes Moore’s Tax Plan Boosts Revenue, Increases Fairness
• By Miles Trinidad, Nick Johnson
Maryland’s Gov. Wes Moore put forward a tax reform plan that would make the tax system fairer, simpler, and better able to meet the state’s needs. The proposed changes to the income tax ask more of those at the top and provide an average tax cut for those earning less.
Maryland’s Tax Reform Likely Won’t Cause Millionaire Migration
• By Nick Johnson
The moment Gov. Wes Moore announced his proposal to reform Maryland’s tax system, in part, by raising income tax rates on high-income households, opponents began predicting that wealthy people would respond by leaving. Experience from other states says that’s not the case.
Congress Could — But Won’t — Pass a Tax Package That Pays for Itself
• By Joe Hughes
If Republican lawmakers were serious about deficit-neutral tax reform, they would focus on increasing taxes for the ultra-wealthy and large corporations. The absence of such proposals in their plan reveals their true priority: delivering enormous tax cuts to the wealthiest Americans while average working families receive crumbs.
Trump’s Plan to Extend His 2017 Tax Provisions: Updated National and State-by-State Estimates
• By Steve Wamhoff
Trump’s plan to make most of the temporary provisions of his 2017 tax law permanent would disproportionately benefit the richest Americans. This includes all major provisions except the $10,000 cap on deductions for state and local taxes (SALT) paid.
The Pitfalls of Flat Income Taxes
• By Carl Davis, Eli Byerly-Duke
While most states have a graduated rate income tax, some state lawmakers have recently become enamored with the idea of moving toward flat rate taxes instead. What’s the difference? And are states well served by the transition? In short: A flat tax is one where each taxpayer pays the same percentage of their income whereas […]
How Local Governments Raise Revenue — and What it Means for Tax Equity
• By Galen Hendricks, Rita Jefferson
Local taxes are key to thriving communities. One in seven tax dollars in the U.S.—about $886 billion annually—is levied by local governments in support of education, infrastructure, public health, and other priorities. Three fourths of this funding comes from property taxes, 18 percent comes from sales and excise taxes, and six percent comes from income taxes.
Louisiana Lawmakers Pass Deeply Regressive Tax Plan
• By Neva Butkus
Louisiana Gov. Jeff Landry called the legislature back to the capitol the day after the national election to take up his plan to overhaul the state’s tax system during a 20-day special session. Our analysis shows the tax overhaul would worsen the inequity already rampant in Louisiana’s tax system while potentially shortchanging essential services for families across the state.
Average Louisianans Will Pay for Gov. Landry’s Tax Break for the Rich
• By Neva Butkus
Tax cuts for the wealthy and corporations will not make Louisiana more competitive. Rather, they will blow a hole in the state budget while asking low- and middle-income working families to make up the difference. Gov. Landry and the Louisiana legislature would make much better use of their time looking for ways to make Louisiana’s tax structure fairer and more capable of adequately funding important priorities.
Tax Justice in the Crosshairs
• By Amy Hanauer
Billionaires and businesses have too much power in Washington. Tax revenue is needed to pay for things we all need. If we want economic justice, racial justice and climate justice, we must have tax justice.
