Recent Work by ITEP

State Lawmakers Should Break the 2023 Tax Cut Fever Before It’s Too Late

January 18, 2023 • By Miles Trinidad

Despite mixed economic signals for 2023, including a possible recession, many state lawmakers plan to use temporary budget surpluses to forge ahead with permanent, regressive tax cuts that would disproportionately benefit the wealthy at the expense of low- and middle-income households. These cuts would put state finances in a precarious position and further erode public investments in education, transportation and health, all of which are crucial for creating inclusive, vibrant communities where everyone, not just the rich, can achieve economic security and thrive. In the event of an economic downturn, these results would be accelerated and amplified.

Momentum Behind State Tax Credits for Workers and Families Continues in 2023

January 18, 2023 • By Miles Trinidad

Refundable tax credits are an important tool for improving family economic security and advancing racial equity, and there is incredible momentum heading into 2023 to boost two key state credits: the Child Tax Credit and the Earned Income Tax Credit.

National Taxpayer Advocate: Infusion of New IRS Funding a ‘Gamechanger’ for Taxpayers

January 17, 2023 • By Jon Whiten

A new report from the National Taxpayer Advocate – part of an independent oversight arm inside the IRS – found that the agency struggled in 2022 with timely processing of tax returns and refunds, responding to taxpayer correspondence quickly, and answering phone calls. It expects these issues to improve in 2023, thanks in part to the influx of $80 billion in new funding from last year’s Inflation Reduction Act, which the Advocate’s office calls a “gamechanger” for Americans.

The Pitfalls of Flat Income Taxes

January 17, 2023 • By Carl Davis, Eli Byerly-Duke

Flat taxes have some surface appeal but come with significant disadvantages. Critically, a flat tax guarantees that wealthy families’ total state and local tax bill will be a lower share of their income than that paid by families of more modest means.

GAO Report Confirms: Trump Tax Law Cut Corporate Taxes to Rock Bottom

January 13, 2023 • By Steve Wamhoff

A new report from the Government Accountability Office finds the average effective federal income tax rate paid by large, profitable corporations fell to 9 percent in the first year the Trump tax law was in effect, and the share of such companies paying nothing at all rose to 34 percent that year.

State Rundown 1/11: Governors Ready to Talk Tax in 2023 State Addresses

January 11, 2023 • By ITEP Staff

Governors have begun their annual trek to the podium in statehouses across the U.S. to lay out their visions for 2023, and so far, taxes look like they will play a major role in debates throughout state legislative sessions...

“Fair Tax” Plan Would Abolish the IRS and Shift Federal Taxes from the Wealthy to the Rest of Us

January 11, 2023 • By Steve Wamhoff

The "Fair Tax" bill would impose a 30 percent federal sales tax on everything we buy – groceries, cars, homes, health care - and lead to a giant tax shift from the well-off to everyone else.

New House Rules: Low Taxes for the Wealthy on Cruise Control, Tax Credits for Working People Face Roadblock

January 10, 2023 • By Joe Hughes

Two new rules will hamper the new Congress’s ability to pass tax legislation in the next two years. One requires a supermajority for legislation that increases income tax rates, and the other requires cuts to mandatory spending programs—like Medicare, Social Security, veterans’ benefits or unemployment insurance—in exchange for changes to the Child Tax Credit or Earned Income Tax Credit that would mostly help low-income families.

New House Majority Quickly Moves to Help Wealthy Evade Taxes

January 10, 2023 • By Jon Whiten

The “Family and Small Business Taxpayer Protection Act” would rescind 90 percent of the new funding for the IRS included in last year’s Inflation Reduction Act. This would eliminate the new law’s $45.6 billion to enforce the tax code for people making more than $400,000 and repeal an additional $26 billion in IRS funding that would include, among other things, a pilot for a free e-file program to make it easier for people with relatively simple tax returns to file. The slash-and-burn bill comes just weeks after Republicans forced a 2 percent cut in annual IRS funding as part of…

State Rundown 1/5: State Taxes Coming in Hot in New Year

January 5, 2023 • By ITEP Staff

The new year often brings with it new goals and a desire to take on complex problems with a fresh perspective. Unfortunately, that doesn’t always apply to state lawmakers when considering tax policy...