Recent Work by ITEP

Trump Proposals Would Reduce the Share of Taxes Paid by the Richest 1%, Raise It for Everyone Else

September 13, 2017 • By Steve Wamhoff

The tax proposals released by the Trump Administration in April would reduce the share of total federal, state and local taxes paid by America’s richest 1 percent while increasing the share paid by all other income groups. This clearly indicates that the tax system would be less progressive under the president’s approach.

Census Data Shows Importance of Refundable Tax Credits in Reducing Poverty, But Lawmakers Move to Restrict Them

September 12, 2017 • By Steve Wamhoff

The annual poverty data released by the Census Bureau today continues to show that federal refundable tax credits are the second most important anti-poverty program after Social Security. But this could change if the House Republicans have their way. The budget resolution approved by Republicans on the House Budget Committee in July would place new […]

Reducing the Cost of Child Care Through State Tax Codes in 2017

September 11, 2017 • By ITEP Staff

Low- and middle-income working parents spend a significant portion of their income on child care. As the number of parents working outside of the home continues to rise, child care expenses have become an unavoidable and increasingly unaffordable expense. This policy brief examines state tax policy tools that can be used to make child care more affordable: a dependent care tax credit modeled after the federal program and a deduction for child care expenses.

Property Tax Circuit Breakers in 2017

September 11, 2017 • By ITEP Staff

State lawmakers seeking to make residential property taxes more affordable have two broad options: across-the-board tax cuts for taxpayers at all income levels, such as a homestead exemption or a tax cap, and targeted tax breaks that are given only to particular groups of low- and middle-income taxpayers. One such targeted program to reduce property taxes is called a “circuit breaker” because it protects taxpayers from a property tax “overload” just like an electric circuit breaker: when a property tax bill exceeds a certain percentage of a taxpayer’s income, the circuit breaker reduces property taxes in excess of this “overload”…

Options for a Less Regressive Sales Tax in 2017

September 11, 2017 • By ITEP Staff

Sales taxes are one of the most important revenue sources for state and local governments; however, they are also among the most unfair taxes, falling more heavily on low- and middle-income households. Therefore, it is important that policymakers nationwide find ways to make sales taxes more equitable while preserving this important source of funding for public services. This policy brief discusses two approaches to a less regressive sales tax: broad-based exemptions and targeted sales tax credits.

Rewarding Work Through State Earned Income Tax Credits in 2017

September 11, 2017 • By ITEP Staff

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 Rundown 9/6: Most Statehouses Quiet, Many Pondering Harvey’s Impacts

September 7, 2017 • By ITEP Staff

It's been a quiet week for tax policy in most states, though lawmakers are still making noise in Pennsylvania, where a budget agreement is still needed, and in Wisconsin, where legislators are searching for the will to raise revenue for the state's ailing transportation infrastructure. In our "What We're Reading" section you'll find interesting reading on the fiscal fallout of Hurricane Harvey, as well as an in-depth series on how states' disaster response needs are likely to continue to increase.

New ITEP Report: Trump’s Proposed Territorial Tax System Would Increase Corporate Tax Dodging

September 6, 2017 • By Steve Wamhoff

While promoting his ideas for overhauling our tax code today in North Dakota, President Trump said that Congress should adopt a territorial tax system which, he argued, would result in more investment in the United States. You’re not alone if you’re not sure what “territorial” means in this context. It’s a euphemism used by some politicians to describe a proposal that will be wildly unpopular once voters understand what it really means.

Turning Loopholes into Black Holes: Trump’s Territorial Tax Proposal Would Increase Corporate Tax Avoidance

September 6, 2017 • By Matthew Gardner, Steve Wamhoff

The problem of offshore tax avoidance by American corporations could grow much worse under President Donald Trump’s proposal to adopt a “territorial” tax system, which would exempt the offshore profits of American corporations from U.S. taxes. This change would increase the already substantial benefits American corporations obtain when they use accounting gimmicks to make their profits appear to be earned in a foreign country that has no corporate income tax or has one that is extremely low or easy to avoid.

Tax Reform Principles Released by GOP in August Raise More Questions Than They Answer

August 31, 2017 • By Steve Wamhoff

Before Wednesday, you may have forgotten about tax reform given that President Trump’s remarks on the Charlottesville white supremacist rally, as well as the first U.S. solar eclipse since 1979, and Hurricane Harvey, overshadowed most other news. But Republicans on the House Ways and Means Committee, which in theory is the starting place for any tax legislation, certainly tried to get the public to focus on their vision for tax reform. They released a “reason for tax reform” each day in August. Unfortunately, these “reasons” are a combination of ideas that their proposals fail to address and misleading assertions.