Massachusetts

The centerpiece of the House and Senate tax plans is a major tax cut for profitable corporations that the American public does not want, and that will overwhelmingly benefit a small number of wealthy investors living in traditionally “blue” states. New ITEP research shows that poorer states such as West Virginia, Oklahoma, Alabama, and Tennessee would be largely left behind by a corporate tax cut, while the lion’s share of the benefits would remain with a relatively small number of wealthy investors who tend to be concentrated in larger cities near the nation’s coasts.

ITEP has analyzed each of the tax proposals advanced by the House and Senate in recent weeks. While some details have changed, the bottom line is the same: The plans would disproportionately benefit corporations and the wealthy. The Senate tax plan ITEP’s latest analysis examined the proposal that passed the Senate Finance Committee on Nov. […]

The tax bill reported out of the Senate Finance Committee on Nov. 16 would raise taxes on at least 29 percent of Americans and cause the populations of 19 states to pay more in federal taxes in 2027 than they do today.

The Senate tax bill released last week would raise taxes on some families while bestowing immense benefits on wealthy Americans and foreign investors. In Massachusetts, 56 percent of the federal tax cuts would go to the richest 5 percent of residents, and 17 percent of households would face a tax increase, once the bill is fully implemented.

A 50-state analysis of the Senate tax proposal finds that not only would greatest share of benefits go to the richest Americans, but also more than one in 10 taxpayers would face a tax hike, with a large number of those taxpayers residing in states where residents pay higher state and local taxes.

The House of Representatives is expected to vote this week on a bill that would reduce federal revenues by roughly $1.5 trillion over the next decade. Despite the bill’s high price tag, many households would pay more in federal tax if the bill is enacted, in large part because it slashes the deduction for state […]

The Tax Cuts and Jobs Act, which was introduced on November 2 in the House of Representatives, includes some provisions that raise taxes and some that cut taxes, so the net effect for any particular family’s federal tax bill depends on their situation. Some of the provisions that benefit the middle class — like lower tax rates, an increased standard deduction, and a $300 tax credit for each adult in a household — are designed to expire or become less generous over time. Some of the provisions that benefit the wealthy, such as the reduction and eventual repeal of the estate…

The Tax Cuts and Jobs Act, which was introduced on Nov. 2 in the House of Representatives, would raise taxes on some Americans and cut taxes on others while also providing significant savings to foreign investors.

The ITEP report concludes that many of the most affected people would be middle-income and upper-middle income taxpayers. For example, in Maryland, about one-third of those making from $48,700 to $73,700 would face a tax hike, while 41 percent of those between $73,700 and $126,500, would face an increase, the study says. And almost 65 […]

A 50-state analysis of the GOP tax framework reveals the top 1 percent of taxpayers would receive a substantial tax cut while middle- and upper-middle-income taxpayers in many states would pay more, the Institute on Taxation and Economic Policy said today. The GOP continues to tout its tax plan as “beneficial to the middle class.” […]

The “tax reform framework” released by the Trump administration and Congressional Republican leaders on September 27 would affect states differently, but every state would see its richest residents grow richer if it is enacted. In all but a handful of states, at least half of the tax cuts would flow to the richest one percent of residents if the framework took effect.

The “tax reform framework” released by the Trump administration and congressional Republican leaders on September 27 would not benefit everyone in Massachusetts equally. The richest one percent of Massachusetts residents would receive 76.0 percent of the tax cuts within the state under the framework in 2018. These households are projected to have an income of at least $771,800 next year. The framework would provide them an average tax cut of $136,960 in 2018, which would increase their income by an average of 4.5 percent.

Astonishingly, tax policies in virtually every state make it harder for those living in poverty to make ends meet. When all the taxes imposed by state and local governments are taken into account, every state imposes higher effective tax rates on poor families than on the richest taxpayers.

The Earned Income Tax Credit (EITC) is a policy designed to bolster the earnings of low-wage workers and offset some of the taxes they pay, providing the opportunity for struggling families to step up and out of poverty toward meaningful economic security. The federal EITC has kept millions of Americans out of poverty since its enactment in the mid-1970s. Over the past several decades, the effectiveness of the EITC has been magnified as many states have enacted and later expanded their own credits.

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.

A tiny fraction of the Massachusetts population (0.8 percent) earns more than $1 million annually. But this elite group would receive 56.1 percent of the tax cuts that go to Massachusetts residents under the tax proposals from the Trump administration. A much larger group, 40.0 percent of the state, earns less than $45,000, but would receive just 3.4 percent of the tax cuts.

2017 marked a sea change in state tax policy and a stark departure from the current federal tax debate as dubious supply-side economic theories began to lose their grip on statehouses. Compared to the predominant trend in recent years of emphasizing top-heavy income tax cuts and shifting to more regressive consumption taxes in the hopes […]

The Earned Income Tax Credit (EITC) is a policy designed to bolster the earnings of low-wage workers and offset some of the taxes they pay, providing the opportunity for struggling families to step up and out of poverty toward meaningful economic security. The federal EITC has kept millions of Americans out of poverty since its enactment in the mid-1970s. Over the past several decades, the effectiveness of the EITC has been magnified as many states have enacted and later expanded their own credits.

State lawmakers face a dilemma when it comes to sales tax holidays, an attractive and popular policy that nonetheless proves to be a poor choice compared to developing thoughtful, targeted tax policies or investing in well-executed public services. Luckily, word seems to be getting out that the costs associated with these holidays far outweigh their purported benefits.

Not only would President Trump’s proposed tax plan fail to deliver on its promise of largely helping middle-class taxpayers, it also would shower a disproportionate share of the total tax cut on taxpayers in some of the richest states while southern and a few other states would receive a smaller share of the tax cut […]

Earlier this year, the Trump administration released some broadly outlined proposals to overhaul the federal tax code. Households in Massachusetts would not benefit equally from these proposals. The richest one percent of the state’s taxpayers are projected to make an average income of $3,010,300 in 2018. They would receive 63.2 percent of the tax cuts that go to Massachusetts’s residents and would enjoy an average cut of $215,670 in 2018 alone.

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.

Sales taxes are an important revenue source, composing close to half of all state tax revenues. But sales taxes are also inherently regressive because the lower a family’s income, the more the family must spend on goods and services subject to the tax. Lawmakers in many states have enacted “sales tax holidays” (at least 16 states will hold them in 2017), to provide a temporary break on paying the tax on purchases of clothing, school supplies, and other items. While these holidays may seem to lessen the regressive impacts of the sales tax, their benefits are minimal. This policy brief…

Illinois and New Jersey made national news earlier this month after resolving their contentious budget stalemates. But they weren’t the only states working through (and in some cases after) the holiday weekend to resolve budget issues.