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blog
July 9, 2020
Congressional Budget Office Confirms That IRS Budget Cuts Lose Money and Benefit the Rich
Lawmakers often claim that they are “saving” taxpayers money by slashing federal spending, but the truth is that these cuts often are counterproductive and costly in the long-term. One type of budget-cutting has costs that are immediate and obvious—cuts to the IRS, the agency that collects the revenue that pays for federal spending. A new report from the Congressional Budget Office (CBO) confirms that lawmakers’ anti-government, IRS funding-cuts zeal has increased the deficit.
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blog
July 8, 2020
State Rundown 7/8: Many State Legislatures Reconvene for Special or Resumed Sessions
Local leaders in the District of Columbia and Seattle, Washington, approved progressive tax changes to raise needed funding this week for priorities such as coronavirus relief, affordable housing, and mental health. Arizona advocates submitted signatures to place a high-income surcharge on the ballot for November. And as a number of states made decisions on how to use federal Coronavirus Aid, Relief, and Economic Security (CARES) Act funds, North Carolina decoupled from costly business tax cuts contained in the act and Nebraska started discussing doing the same.
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blog
July 1, 2020
State Rundown 7/1: Happy New Year?
As ITEP analyst Kamolika Das wrote today, July 1 is typically the beginning of state fiscal years and “a point when one can take a step back and reflect on the wins and disappointments of the past state legislative sessions.” Not so in 2020, she writes, as uncertainty surrounding the virus, state revenues, and potential federal action give state lawmakers no such time to relax and reflect. Although most recent state actions, such as those covered below in California, Mississippi, and West Virginia, have focused on funding cuts and temporary measures to bring budgets into short-term balance, the need for revenue solutions to the revenue crisis “has become increasingly clear.”
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blog
July 1, 2020
New Fiscal Year Brings New Challenges and Opportunities in the States
July 1—the start of the new fiscal year in most states—typically marks a point when one can take a step back and reflect on the wins and disappointments of the past state legislative sessions. 2020 is markedly different. Nationwide business closures and stay-at-home orders in response to COVID-19 have led to unprecedented spikes in unemployment, decreased demand for consumer spending, and increased demand for vital public services. As a result, states face incredibly uncertain financial futures with little clarity regarding how their tax collections will fare over the next year.
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report
June 30, 2020
Republican Tax Credit Proposal Would Provide New Breaks to Tax Avoiders Like Amazon and Netflix
While lawmakers of both parties and policy experts discuss various ways to respond to the continuing COVID-19 crisis and resulting economic downturn, Republicans in Congress are offering a new solution. Their idea, which is still being discussed, is to waive existing limits on business tax credits. This could benefit corporations that are profitable but that nonetheless pay no taxes or very little in taxes because of the many tax breaks and legal loopholes they already enjoy.
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blog
June 26, 2020
State Rundown 6/26: States Take Varying Fiscal Approaches While Awaiting Federal Action
State policymakers this week took a variety of approaches to their fiscal situations amid the COVID-19 pandemic. Tennessee lawmakers chose to balance their budget through $1.5 billion in cuts to public services, but not before adding to those cuts by going forward with planned tax cuts. California legislators also passed a budget but relied on a number of temporary measures and delays to do so. Their counterparts in Massachusetts, New Jersey, and Rhode Island opted for interim budgets to tide them over for a few months while they continue to look for lasting solutions. Meanwhile, many states are debating whether to couple to tax cuts in the federal response bills and how to use the aid approved so far, while making the case to Congress that major additional aid is needed.
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blog
June 26, 2020
Beyond SCOTUS: States Recognize Need for More Inclusive Immigrant Policy
The U.S. Supreme Court last week halted an effort by the Trump administration that would have stripped DACA (Deferred Action for Childhood Arrivals) recipients of… -
blog
June 23, 2020
McSally “Travel Tax Credit” Is an Invitation for Tax Avoidance
Earlier this week, U.S. Sen. Martha McSally (R-AZ) introduced the “American TRIP Act,” a bill ostensibly designed to encourage Americans to boost the economy by traveling within the United States. The bill is certainly a trip in the colloquial sense of the word.
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blog
June 22, 2020
ITEP supports Black Lives Matter
The Institute on Taxation and Economic Policy stands with activists who are guiding the movement to transform America, dismantle systemic racism in policing, and envision a better justice system. Committed protestors in big cities, small towns, and suburban enclaves have spurred a sea change in public opinion and policy possibility on policing and incarceration. Their work and activism builds on years of action by Black Lives Matter and other leaders.
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blog
June 18, 2020
State Rundown 6/18: States Work to “Finalize” Budgets in Uncertain Times
Despite uncertainty all around the nation, a few states passed budgets this week and many more are negotiating to enact theirs before fiscal years close at the end of June. Colorado notably pared back some of its own tax breaks and limited the potential damage on its budget from new federal breaks. California also passed a budget but few in the state actually think the dealing is done. Iowa quietly enacted its budget too, though advocates in the state are making noise about non-fiscal bills that were added late in the game.