Recent Work by ITEP
General sales taxes are an important revenue source for state governments, accounting for close to half of state tax collections nationwide. But most state sales taxes have a damaging structural flaw: the tax typically applies to most sales of goods, such as books and computers, but exempts most services such as haircuts and car repairs. This omission is not the result of conscious policy choices, but a historical accident: when most state sales taxes were enacted in the 1930s, services were a relatively small part of consumer spending.
Sales and excise taxes, or consumption taxes, are an important revenue source, comprising close to half of all state tax revenues. These taxes are levied in each of the fifty states and are often considered "hidden" to consumers since they're spread out over many purchases rather than paid in one lump sum. This policy brief takes a closer look at how these taxes are calculated.
With the state’s gas tax pegged to the price of gasoline, North Carolina is scheduled to raise its gas tax rate on July 1. This increase was entirely predictable, but is understandably controversial. Unfortunately, the debate surrounding what to do in the wake of this increase has been far too narrow, focusing on just two […]
How much is enough? On top of the close to $500 million in corporate tax breaks Illinois doles out each year, Governor Pat Quinn now finds himself confronted by a growing crowd of CEO’s demanding even more. In the wake of tax-break lobbying efforts by Motorola, Sears and Caterpillar, the latest corporation seeking preferential tax […]
My testimony today examines the erosion of Rhode Island’s corporate income tax, and the multistate tax avoidance schemes that have contributed to this erosion. In addition, it discusses the single best strategy available to lawmakers seeking to respond to the problem of corporate tax avoidance—mandatory combined reporting. Requiring combined reporting of the income of multistate […]
My testimony today focuses on House Bill 5737, which would enact a variety of reforms designed to enhance the level of scrutiny applied to new tax credits, deductions, exemptions, and exclusions. This testimony emphasizes how these reforms would help remove counterproductive biases in favor of relying too heavily on tax preferences; how similar reforms have […]
Connecticut Takes a Stand for Progressive Tax Policy and a Balanced Budget Approach
May 14, 2011 • By Meg Wiehe
Five months into 2011, a glimmer of hope for progressive tax policy and a balanced, sensible approach to state budget woes has emerged in Connecticut. Lawmakers in all but a handful of states are continuing to grapple with historic budget shortfalls as they craft and finalize their budget plans for next year. State revenues continue […]
States Should Not Allow Amazon.com to Bully Them into Forgoing Sales Tax Reform
April 14, 2011 • By Carl Davis
In just the last few weeks, Arkansas and Illinois joined New York, North Carolina, and Rhode Island in enacting legislation requiring some online retailers, like Amazon.com, to collect sales taxes on purchases made by their state’s residents. Vermont’s House of Representatives recently passed similar legislation, and Arizona, California, Connecticut, Hawaii, Massachusetts, Minnesota, Mississippi, Missouri, New […]
My testimony focuses on Governor Chafee’s Sales Tax Modernization Proposal, which would generally broaden Rhode Island’s sales tax base, lower the general state sales tax rate, and raise additional revenue to help mitigate budget cuts. In particular, my testimony will provide thoughts on two components of the governor’s proposal: adding a mix of services to […]
Don’t Give Up on Pease: States Can Decouple from Recent Federal Tax Cuts for Wealthy Itemizers
April 10, 2011 • By Meg Wiehe
In 2011, thirty one states and the District of Columbia allow a group of income tax breaks known as “itemized deductions” (Figure 1). Itemized deductions are designed to help defray a wide variety of personal expenditures that affect a taxpayer’s ability to pay taxes, including charitable contributions, extraordinary medical expenses, mortgage interest payments and state […]
ITEP in the News
AP News: Georgia Republicans, Against Backdrop of 2026 Election, Push to Eliminate State Income Tax
Barron's: Social Security Is 90 Years Old. Trump Just Weighed In.
Nonprofit Quarterly: Class Not Dismissed: Mamdani, Nonprofits, and the Fight for Economic Justice
Wall Street Journal: Blue States Hunt for Ways to Wring More Taxes From the Wealthy
CT Mirror: Sales Tax Holidays Under Fire as CT Launches Its Promotion
ITEP Work in Action
Economic Policy Institute: Unions Aren’t Just Good for Workers—They Also Benefit Communities and Democracy
Hawai'i Appleseed: Incoming Federal Tax Cuts Will Heavily Favor Hawaiʻi’s Wealthiest Residents
New Hampshire Fiscal Policy Institute: New Federal Reconciliation Law Reduces Taxes, Health Access, and Food Assistance Supports for Granite Staters
United Ways of California: The Economic Impact of Immigrants in California
Center for American Progress: 2024 Findings Reveal What’s at Stake for Recipients and the United States
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