April 14, 2018

ITEP Resources for Tax Day 2018

news release

Two recent Congressional Budget Office reports underscore why the nation needs progressive tax policies. The first, published in March, demonstrates that tax and other public policies have a measurable effect on income disparity. According to CBO data, tax policies (think Earned Income Tax Credit and Child Tax Credit) and means-tested programs (Children’s Health Insurance Program, Medicaid, food assistance, etc.) have helped alleviate growing income inequality. The second CBO report, released this week, reveals that the national debt will soar to untenable levels in the coming years due in part to the recent Trump-GOP tax cuts.

It’s important to think about both of these reports in the context of our current tax policies because the Trump-GOP tax law upended what we know about how sound tax policy can make a positive difference in the lives of working families. The law reserved the lion’s share of its tax cuts for corporations and the wealthy, redistributing our nation’s wealth to those who already have the most. [A new ITEP report provides a full analysis.] Further, immediately after passing the tax law, GOP leaders said they intend to “tackle entitlement spending next,” meaning they plan to maintain tax cuts that mostly benefit the rich while significantly curbing spending on programs that help provide economic security for the most vulnerable families. Data reveal their approach is a recipe for making income inequality worse.

For Tax Day, ITEP has released several new reports that tell a broader story about our nation’s federal, state and local tax systems, providing important details about taxes we all pay, comprehensive information about the new federal tax law, and research on the tax-paying habits of Fortune 500 corporations.

The Trump-GOP tax cuts were one of the most historically unpopular pieces of tax legislation to pass. Part of the public relations push behind this law was based on the demonstrably false claim that our taxes are too high. The truth is that compared to other economically advanced countries, our taxes on individuals and corporations are below average.

The new federal tax law slashed the corporate tax rate from 35 to 21 percent under the false premise that the nation’s corporations are taxed to the point where they cannot compete. The truth is that before the tax law passed, many profitable Fortune 500 companies paid nowhere near the statutory corporate tax rate.

A few other ITEP resources related to state tax policies that may interest you this Tax Day: