Institute on Taxation and Economic Policy (ITEP)

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States Are Opening a Pandora’s Box of Data Centers

November 19, 2025 • By Page Gray

States Are Opening a Pandora’s Box of Data Centers

State governments are rushing to offer billions of dollars in subsidies to data center construction, apparently without understanding their full costs.

State Rundown 10/1: State and Local Governments Doing the Opposite of Shutting Down

State and local officials are staying very busy by considering a dizzying amount of reversals.

State Rundown 9/18: Lawmakers Confront Revenue Loss from Federal Policy Changes

Some states are trying to avoid revenue loss while others are welcoming it and doubling down.

State Earned Income Tax Credits Support Families and Workers in 2025

Nearly two-thirds of states now have an Earned Income Tax Credit (EITC). Momentum continues to build on these credits that boost low-paid workers’ incomes and offset some of the taxes they pay, helping lower-income families achieve greater economic security.

Trump’s Tax Law Clobbers State Budgets. Now’s the Time to Prepare.

The Trump megabill hands the richest 1% a trillion-dollar windfall while gutting funding for health care, education, and disaster relief — leaving communities to pick up the pieces. State and local leaders must step up, tax the wealthiest fairly, and safeguard the essentials that keep America healthy, educated, and safe.

State Rundown 7/24: States Begin Preparing for Federal Megabill Fallout

All eyes in statehouses in recent weeks have been on federal budget negotiations, and now that the “megabill” has passed, they are focused in on their own budgets in search of ways to cope with the enormous consequences coming their way. All states will see fewer federal dollars flowing through their coffers, higher needs due […]

Over the next month, 15 states will temporarily exempt a range of products from sales tax, joining one that held its sales tax holiday earlier this summer and two that do so a little later in the year. While these temporary suspensions may have some surface appeal, they have many significant downsides, as we explain in […]

Sales Tax Holidays Miss the Mark When it Comes to Effective Sales Tax Reform

Sales tax holidays are often marketed as relief for everyday families, but they do little to address the deeper inequities of regressive sales taxes. In 2025, 18 states offer these holidays at a collective cost of $1.3 billion.

How Much Would Every Family in Every State Get if the Megabill’s Tax Cuts Given to the Rich Had Instead Been Evenly Divided?

If instead of giving $117 billion to the richest 1 percent, that money had been evenly divided among all Americans, we'd each get $343 - or nearly $1,400 for a family of four.