Recent Work by ITEP

The Effects of Replacing Most Federal Taxes with a National Sales Tax

September 15, 2004 • By ITEP Staff

Recently, there has been renewed discussion of the possibility of replacing most federal taxes with a national retail sales tax. Such an idea was broached in the 1990s, but political interest waned when it was discovered that it would take a sales-tax rate well in excess of 50 percent to replace existing federal revenues. In […]

The Impact of the Ron Sims Tax Plan on Washington Tax Fairness

August 17, 2004 • By ITEP Staff

Washington’s tax system is regressive, requiring low- and middle-income families to pay far more of their income in tax than wealthier Washingtonians. A tax reform plan recently proposed by gubernatorial candidate Ron Sims would change the state’s tax system by repealing the state’s general business tax and the state sales tax, creating a $100,000 homeowner’s […]

A Primer on State Rainy Day Funds

July 1, 2004 • By ITEP Staff

In recent years, most state governments have experienced painful budget deficits. Many states have reacted to these shortfalls by cutting spending or increasing taxes. Almost all states now have a third option that can help postpone these painful decisions: using a rainy day fund (RDF). Like a savings account, an RDF sets aside surplus revenue during periods of economic growth for use in times of budget shortfalls. This policy brief takes a closer look at how rainy day funds can help states through difficult fiscal times, and assesses options for improving the adequacy of these funds.

Federal Taxation of Earnings Versus Investment Income in 2004

May 15, 2004 • By ITEP Staff

How do personal taxes on total investment income compare to taxes on earnings right now? This paper addresses that question. The analysis includes both the individual income tax, which applies in varying degrees to both earnings and investment income, and Social Security and Medicare taxes, which apply only to wages and selfemployment earnings. The central […]

Value Added Taxes: An Option for States?

May 1, 2004 • By ITEP Staff

In recent months, lawmakers in a number of states have suggested that a particular type of sales tax, called the value-added tax or VAT, might be a cure-all for state budgetary problems. Although Michigan is the only state that currently relies on a VAT as a major revenue source, several other states have recently considered implementing this type of tax. This policy brief evaluates the case for (and against) implementing a VAT at the state level.

State Corporate Tax Disclosure: Why It’s Needed

May 1, 2004 • By ITEP Staff

Corporate income taxes are in decline. Corporate tax revenues represent a smaller piece of the federal and state tax pie than at almost any time since World War II. While it is possible to diagnose some of the reasons for this decline on the federal level, very little public information is available to help policymakers evaluate the health of the corporate taxes collected by state governments. For this reason, some policymakers have called for better public disclosure of how much the biggest corporations are paying in state taxes. This policy brief evaluates arguments in favor of (and against) requiring detailed…

Does Personal Income Tax Progressivity Inhibit Economic Growth?

April 15, 2004 • By ITEP Staff

What is the relationship between income tax burdens and state economic growth? A December 2003 study by the Oklahoma Council of Public Affairs (OCPA), titled Income Tax Progressivity in Oklahoma: Hindering Economic Growth, Variating State Revenue, attempts to weigh in on this issue. The authors of the report claim that Oklahoma’s personal income tax is […]

The Distributional Impact of SB 1374’s Personal Income Tax Changes

March 30, 2004 • By ITEP Staff

The Missouri personal income tax currently applies a graduated rate structure with tax rates ranging from 1.5 percent to 6 percent of taxable income. This rate structure is applied to a tax base that starts with federal adjusted gross income, but allows a variety of special deductions and exemptions that allow some Missourians to reduce […]

ITEP Testimony on Maryland Tax Reform Options

March 10, 2004 • By ITEP Staff

My testimony today focuses on two revenue-raising tax bills introduced in the Maryland House of Delegates: HB 1061, the “Millionaire’s Tax Surcharge,” and HB 1306, the “Maryland Progressive Income Tax Reform Act of 2004.” In particular, my testimony will discuss the impact of each bill on the fairness of the Maryland tax system, and will […]

Tax Options for Arkansas: Funding Education After the Lake View Case

July 15, 2003 • By ITEP Staff

The purpose of this study is to analyze the implications of the Lake View case for the future of financing public education in Arkansas. The study has three broad goals: First, the report provides a detailed menu of revenue- raising options that could be used to meet the Lake View spending mandates. Second, the report […]