Oregon

In the last few weeks, Florida Gov. Ron DeSantis has served up his budget proposal, which advocates are eager to dig into and hoping to contribute to with a delectable Earned Income Tax Credit proposal of their own. Utah lawmakers have been cooking up tax ideas as well, but haven’t yet decided when to come to the table to debate them. And Maryland leaders finalized their menu of needed education reforms, now moving on to assigning responsibilities for funding them. With respect to dividing up the pie, our “What We’re Reading” section below includes reporting on evidence that corporate tax…

This report presents a comprehensive overview of anti-poverty tax policies, surveys tax policy decisions made in the states in 2019 and offers recommendations that every state should consider to help families rise out of poverty. States can jump start their anti-poverty efforts by enacting one or more of four proven and effective tax strategies to reduce the share of taxes paid by low- and moderate-income families: state Earned Income Tax Credits, property tax circuit breakers, targeted low-income credits, and child-related tax credits.

The Earned Income Tax Credit (EITC) is a policy designed to bolster the incomes of low-wage workers and offset some of the taxes they pay, providing the opportunity for families struggling to afford the high cost of living 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.

New tax data out of California, the world’s largest market for legal cannabis, tell a complicated story about the cannabis industry and its tax revenue potential. Legal cannabis markets take time to establish, and depending on local market conditions, the revenue states raise can vary significantly.

Six states allow an unusual income tax deduction for federal income taxes paid. These deductions are detrimental to state income tax systems on many fronts, as they offer large benefits to high-income earners and undercut the adequacy and stability of state income tax systems.

Cannabis tax revenue is becoming more significant as legal sales grow. The tax is far from a budgetary panacea, but an ITEP analysis of revenue data reported by the seven states with legal cannabis sales underway suggests that excise and sales tax revenues from the sale of the drug could reach $1.6 billion this year.

OHIO legislators passed a budget with unfortunate income tax cuts for high-income households. Other states turned their attention to unconventional ideas during their legislative off-seasons, for better and for worse. And there are many gems to be found in our “What We’re Reading” section below, including new research on the racial inequities that continue to pervade our communities and schools.

Several states this year proposed or enacted tax policies that would require high-income households and/or businesses to pay more in taxes. After years of policymaking that slashed taxes for wealthy households and deprived states of revenue to adequately fund public services, this is a necessary and welcome reversal.

We've said it before, and we'll say it again: states don't have to wait for federal lawmakers to make moves toward progressive tax policy. And so far, 2019 has been a good year for equitable and sustainable tax policy in the states. With July 1 marking the start of a new fiscal year for most states, this special edition of the Rundown looks at how discussions in 2019 have been dominated by plans to raise revenue for vital investments, tax the rich and corporations fairly, use the tax code to help workers and families and advance racial equity, and shore…

Low-income working families got good news and bad news this week, as Earned Income Tax Credit (EITC) enhancements passed in California and advanced in Oregon, while minimum wage increases failed in Pennsylvania, Rhode Island, and Wisconsin. Meanwhile, the momentum for taxing wealth and the very rich continued to grow, as more one-percenters called for enacting progressive taxes, and Inequality.org held a star-studded conference on why and how to do so.

Ohio now enjoys the distinction of being the 30th state to raise or reform its gas tax this decade, and the third state to do so this year, under a bill signed into law by Gov. Mike DeWine. While state tax policy can be a contentious topic, there has been a remarkable level of agreement on the gasoline tax. Increasingly, state lawmakers are deciding that outdated gas taxes need to be raised and reformed to fund infrastructure projects that are vital to their economies. These actions are helping reverse losses in gas tax purchasing power caused by rising construction costs…

As Americans observe Juneteenth today–the day two years after the Emancipation Proclamation on which news of the end of the Civil War and slavery reached some of the last slaves in Texas—most people’s attention should be on celebrating victories, remembering losses, gathering strength to continue the fight for racial justice, and the accompanying Congressional reparations hearings. In comparison, state tax debates over matters such as reluctance to invest in infrastructure in Michigan and Missouri, approval of income tax cuts in Wisconsin, and a budget standoff in New Jersey may seem unimportant and irrelevant. But we encourage our readers to think about how state policies often serve to enrich and empower white and wealthy households, and…

This week saw lawmakers in Ohio propose significant harmful tax cuts, leaders in California and Oregon work toward strengthening the state Earned Income Tax Credits (EITCs), and governors in Missouri and Kansas declare a truce to end the practice of bribing businesses in the Kansas City area with tax cuts to move from one side of the state line to the other. Meanwhile, Massachusetts leaders are discussing ways of raising taxes on their richest households, which our latest Just Taxes blog post notes is a promising trend this year across many states.

States are putting evidence into practice with multiple efforts to improve services and tax codes through more progressive taxes on the wealthy. Clear evidence has spread widely this year, informing a national conversation about progressive taxation and leading lawmakers in multiple states to eschew supply-side superstition and act on real evidence instead. Taxing the rich works, and in this Just Taxes blog we review state-level efforts to put these proven findings into effect.

Today the Internal Revenue Service (IRS) released its final regulations cracking down on a tax shelter long favored by private and religious K-12 schools, and more recently adopted by some “blue state” lawmakers in the wake of the 2017 Trump tax cut. The regulations come more than a year after the IRS first announced the […]

Income inequality continues to be an undercurrent in public discourse about our economy and how working families are faring. It drove the national debate over the 2017 Tax Cuts and Jobs Act, which, mounds of data reveal has exacerbated the problem. Some elected federal officials have responded to this step backward with calls for higher […]

After states implemented laws that allow taxpayers to circumvent the new $10,000 cap on deductions for state and local taxes (SALT), the IRS has proposed regulations to address this practice. It’s a safe bet the IRS will try to crack down on the newest policies that provide tax credits for donations to public education and other public services, but it remains to be seen whether new regulations will put an end to a longer-running practice of exploiting tax loopholes in some states that allow public money to be funneled to private schools.

Like certain recent controversially concluded television shows, tax and budget debates can end in many ways and often receive mixed reviews. Illinois leaders, for example, ended on a cliffhanger by approving a historic constitutional amendment to create a graduated income tax in the state, whose ultimate conclusion will be crowdsourced by voters next November. Arizona’s fiscal finale fell flat with many observers due to corner-cutting on needed investments and a heavy focus on tax cuts. Texas legislators went for crowd-pleasing property tax cuts and school funding increases but left a gigantic “but how will we pay for this” plot hole…

Consumption taxes (including general sales taxes, excise taxes on specific products, and gross receipts taxes) are an important revenue source for state and local governments. While five states lack state-level general sales taxes (Alaska, Delaware, Montana, New Hampshire, and Oregon), every state levies taxes on some types of consumption.

Tax and budget negotiations remain at standstills in Louisiana and Minnesota, as school funding debates and teacher protests again captured headlines in several states. Oregon lawmakers, for example, finally passed a mixed-bag tax package that won’t improve tax equity but will raise much-needed revenue for education. Meanwhile their counterparts in Nebraska continue to debate highly […]

Lawmakers in Illinois and Ohio have advanced major tax proposals but cannot rest just yet, as they must still get past the other legislative chamber. Their counterparts in Michigan, Minnesota, Nebraska, and Oregon, meanwhile, are all at impasses over education funding, as those in Texas left their school funding disagreement unresolved at least until they reconvene...in 2021. And in an era of many states pre-empting smaller jurisdictions by revoking local decision-making powers, leaders in Colorado and Delaware made moves in the opposite direction, entrusting cities and school districts with more local control.

Teachers in North Carolina and South Carolina are walking out and rallying this week for increased education funding, teacher and staff pay, and other improvements to benefit students—if you’re unsure why be sure to check out research on the teacher shortage and pay gap under “What We’re Reading” below. Meanwhile, budget debates have recently wrapped up in Indiana, Iowa, Massachusetts, New Hampshire, and Washington. And major tax debates are kicking into high gear in both Louisiana and Nebraska.

From the first comprehensive look at corporate filings under the 2017 tax law to bold policy options from analysts and researchers to dramatically reduce poverty, here’s a summary of reports that ITEP released this month.

As of 2017, 11.5 million children in the United States were living in poverty. A national, fully-refundable Child Tax Credit (CTC) would effectively address persistently high child poverty rates at the national and state levels. The federal CTC in its current form falls short of achieving this goal due to its earnings requirement and lack of full refundability. Fortunately, states have options to make state-level improvements in the absence of federal policy change. A state-level CTC is a tool that states can employ to remedy inequalities created by the current structure of the federal CTC. State-level CTCs would significantly reduce…