December 11, 2019 • By Steve Wamhoff
ITEP estimates show that if the House Democrats' proposal was in effect in 2022, it would have a net cost of $81 billion in that year alone. The estimates also show that 51 percent of the benefits would go to the richest 1 percent of taxpayers in the U.S. Clearly, lawmakers concerned about the SALT cap need to go back to the drawing board.
Earlier this year, Amazon and Netflix made headlines when ITEP reported findings that these and at least 58 other companies paid no federal income taxes in 2018. One of the tax breaks they use to manage this feat is related to stock options. Some companies saved hundreds of millions, and in some cases more than a billion dollars, in taxes in 2018 alone with this break. It’s time for Congress to eliminate the stock options tax dodge.
December 10, 2019 • By ITEP Staff
The stock option rules in effect today create a problem because they allow corporations to report a much larger expense for this compensation to the IRS than they report to investors. The result is that corporations can report larger profits to investors but smaller profits to the IRS, undermining the fundamental fairness of the tax system.
A new ITEP report explains that an income tax cut for cannabis businesses embedded in the MORE Act is probably larger than the new 5 percent sales tax. This means that the average cannabis retailer—and its customers—could expect to pay LESS tax if the MORE Act is signed into law. Congress might have good reasons for structuring legalization this way, but it is an underappreciated aspect of the bill that should be made clearer as this debate progresses.
Understanding the full tax consequences of cannabis legalization requires evaluating not only the excise taxes proposed in most legalization bills, but also the effects on the federal income tax liability of cannabis businesses.
In the last few weeks, Florida Gov. Ron DeSantis has served up his budget proposal, which advocates are eager to dig into and hoping to contribute to with a delectable Earned Income Tax Credit proposal of their own. Utah lawmakers have been cooking up tax ideas as well, but haven’t yet decided when to come to the table to debate them. And Maryland leaders finalized their menu of needed education reforms, now moving on to assigning responsibilities for funding them. With respect to dividing up the pie, our “What We’re Reading” section below includes reporting on evidence that corporate tax…
November 25, 2019 • By Carl Davis
The last few years have brought major improvements in how states enforce their sales tax laws on purchases made over the Internet. Less than a decade ago, e-retailers almost never collected the sales taxes owed by their customers. The result was a multi-billion dollar drain on state coffers and a competitive disadvantage for local businesses. But this holiday season looks a bit different.
November 6, 2019 • By ITEP Staff
Many of yesterday’s Election Day votes came down to questions of whether or not to improve on upside-down and often inadequate state and local tax systems. The status quo was maintained in Colorado, where voters failed to approve a proposition to allow the state to invest tax revenue in education and other needs, and in Texas, where a constitutional amendment was approved to prohibit the state from creating an income tax. But voters supported important reforms in other states by approving needed funding for schools in Idaho, opting to legalize and tax recreational cannabis in California. And for more on…
November 1, 2019 • By Steve Wamhoff
Senator and presidential candidate Elizabeth Warren released a plan today to offset the costs of Medicare for All, a publicly funded single-payer health care program. While ITEP has not crunched the numbers, it seems likely overall that her proposals would raise trillions of dollars and leave costs and taxes either unchanged or lower for most low- and middle-income people.
Several Democratic candidates have proposed raising the statutory corporate tax rate from its current level of 21 percent to fund their spending proposals. Political reporters and observers may read a great deal into the different corporate rates proposed by candidates, but the truth is that rates mean very little on their own.