Recent Work by ITEP

Options to Reduce the Revenue Loss from Adjusting the SALT Cap

August 26, 2021 • By Carl Davis, ITEP Staff, Matthew Gardner, Steve Wamhoff

If lawmakers are unwilling to replace the SALT cap with a new limit on tax breaks that raises revenue, then any modification they make to the cap in the current environment will lose revenue and make the federal tax code less progressive. Given this, lawmakers should choose a policy option that loses as little revenue as possible and that does the smallest amount of damage possible to the progressivity of the federal tax code.

The One Thing Missing From the Qualified Business Income Deduction Conversation: Racial Equity

August 25, 2021 • By Marco Guzman

When crafting tax policy, lawmakers and bill authors often work backward, using a patchwork of changes to help achieve their stated goal. One important consideration that is routinely left out is what impact the change will have on racial equity. Such is the case with the qualified business income deduction, which is helping to further enrich wealthy business owners, the overwhelming majority of whom are white. At present, white Americans own 88 percent of private business wealth despite making up only 60 percent of the population. Meanwhile, Black and Hispanic families confronting much higher barriers to entrepreneurship each own less…

Eliminating the State Income Tax Would Wreak Havoc on Mississippi

August 25, 2021 • By Kamolika Das

History has repeatedly shown that such policies harm state economies, dismantle basic public services, and exacerbate tax inequities.

State Rundown 8/18: End of Summer Tax Update

August 18, 2021 • By ITEP Staff

Summer is quickly (and sadly) coming to an end and if you’ve been away enjoying the great outdoors or off the grid, we’re here to help keep you up to date on what’s been happening on the tax front around the country...

State Experimentation with Sales Tax Holidays Magnifies Their Flaws

August 6, 2021 • By Dylan Grundman O'Neill

It’s back-to-school shopping season, so…everyone who buys a cell phone in Arkansas this weekend will do so sales-tax-free. For this whole week in Connecticut, and for the entire spring in New Mexico, the corporate owners of highly profitable multinational restaurant chains had the option to pocket their customers’ taxes rather than remit them to the state to fund vital public services, pass along those savings to their customers, or give a much-needed boost to their employees. And all told, about $550 million of state and local revenue will be forgone in 17 states this year through wasteful and poorly targeted…

Sales Tax Holidays: An Ineffective Alternative to Real Sales Tax Reform

August 6, 2021 • By Dylan Grundman O'Neill

Policymakers tout sales tax holidays as a way for families to save money while shopping for “essential” goods. On the surface, this sounds good. However, a two- to three-day sales tax holiday for selected items does nothing to reduce taxes for low- and moderate-income taxpayers during the other 362 days of the year. Sales taxes are inherently regressive. In the long run, sales tax holidays leave a regressive tax system unchanged, and the benefits of these holidays for working families are minimal. Sales tax holidays also fall short because they are poorly targeted, cost revenue, can easily be exploited, and…

Good Climate Policy Is Good Economic Policy, Too

August 6, 2021 • By Ian Berlin

Congress is proving that there does not need to be a trade-off between good climate policy and good economic policy. Direct hires aside, an even bolder government-backed effort to secure the future of our planet could create as many as 25 million net new jobs at its peak, as well as 5 million permanent jobs, many of which deal directly with domestic infrastructure and cannot be outsourced. With the U.S. economy still down 5.7 million jobs from pre-pandemic levels, climate legislation can be a critical investment for jumpstarting our economic recovery.

Why Local Governments Need an Anti-Racist Approach to Property Assessments

August 5, 2021 • By Ambika Sinha

Property taxes are among the oldest and most relied upon form of local taxes. Revenue raised from these taxes funds education, firefighting, law enforcement, street and infrastructure maintenance, and other essential services. Though all members of the community enjoy these public goods, homeowners of color, especially Black families, pay more as a share of home value in property taxes than their white counterparts. 

State Rundown 8/4: Tis the Season…for Unnecessary Sales Tax Holidays

August 4, 2021 • By ITEP Staff

It’s beginning to look a lot like that time of year again. That’s right, it’s sales tax holiday season and states across the country are doing their best to induce spending that would probably occur regardless...

Corporate Tax Avoidance Under the Tax Cuts and Jobs Act

July 29, 2021 • By ITEP Staff, Matthew Gardner, Steve Wamhoff

Thirty-nine profitable corporations in the S&P 500 or Fortune 500 paid no federal income tax from 2018 through 2020, the first three years that the Tax Cuts and Jobs Act (TCJA) was in effect. Besides the 39 companies that paid nothing over three years, an additional 73 profitable corporations paid less than half the statutory corporate income tax rate of 21 percent established under TCJA. As a group, these 73 corporations paid an effective federal income tax rate of just 5.3 percent during these three years.