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blog
February 20, 2019
State Rundown 2/20: February and Regressive Tax Cuts, The “Meanest Moons of Winter”
Tom Robbins called February “the meanest moon of winter, all the more cruel because it will masquerade as spring, occasionally for hours at a time, only to rip off its mask with a sadistic laugh and spit icicles into every gullible face, behavior that grows quickly old.” Observers of state fiscal debates might think he was writing about similarly tiresome regressive tax cut proposals, which recently succeeded in Arkansas and advanced in North Dakota despite improved public understanding of the upside-down nature state tax systems, ineffectiveness of supply-side trickle-down tax cuts, and importance of investing in education. But like February (“as useless as the extra r in its name”), seemingly endless anti-tax crusades do come to an end and give way to brighter days and better policy. North Dakota lawmakers still have a chance to reject the current tax-slashing proposal, and progressive policy options remain on the table in many states.
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blog
February 14, 2019
State Rundown 2/14: We ♥ Taxes!
Happy Valentine’s Day to all lovers of quality research, sound fiscal policy, and progressive tax reforms! This week, some leaders in ARKANSAS displayed their infatuation with the rich by advancing regressive tax cuts, but others in the state are trying to show some love to low- and middle-income families instead. WISCONSIN lawmakers are devoted to tax reductions for the middle class but have not yet decided how to express those feelings. NEBRASKA legislators are playing the field, flirting with several very different property tax and school funding proposals. And VIRGINIA’s legislators and governor just decided to settle for a flawed tax conformity deal rather than hold out for something better. Meanwhile, NEW YORK and Amazon have cancelled their engagement to one another for now.
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report
February 14, 2019
The Illusion of Race-Neutral Tax Policy
It is well known that the bulk of the federal tax cuts flowed to the highest-earning households, who received the largest tax cut both in terms of real dollars and also as a share of income. But as our analysis with Prosperity Now reveals, solely examining the tax law in the context of class misses a bigger-picture story about how the nation’s public policies not only perpetuate widening income and wealth inequality, they also preserve historic and current injustices that continue to allow white communities to build wealth while denying the same level of opportunity (and often suppressing it) to communities of color.
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blog
February 13, 2019
Fact-Checking on Trump Tax Law Needs a Fact Check
The Tax Cuts and Jobs Act (TCJA), enacted by President Trump and Congressional Republicans at the end of 2017, has caused quite a bit of confusion, and a recent “Fact Checker” column by the Washington Post’s Glenn Kessler does not help. TCJA created real problems that can’t be resolved without real tax reform. To begin that process fact checkers, lawmakers, and everyone else need to be clear about what TCJA did, and did not, do to our tax system.
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blog
February 13, 2019
Fear, Not Facts: Netflix Misleads Media Reporting on Corporate Tax Avoidance
In an age when even the most incontrovertible facts are routinely dismissed as “fake news,” reporting on corporate taxes can be a daunting challenge for members of the media. ITEP’s recent analysis of the income tax disclosures made by Netflix in its annual financial report last week provide an excellent reminder of this.
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blog
February 13, 2019
SALT Deduction Cap Should be Reformed, Not Repealed
On Monday a group of Senators and Representatives from the Northeast announced their latest proposal to repeal the cap on deductions for state and local taxes (SALT), this time offsetting the costs by restoring the top personal income tax rate to 39.6 percent.
This is an improvement over previous proposals to repeal the cap on SALT deductions without offsetting the costs at all. But the new approach does not improve our tax system overall. Instead, it trades one tax cut for the rich (a lower top income tax rate) for another (repeal of the cap on SALT deductions).
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blog
February 13, 2019
Amazon in Its Prime: Doubles Profits, Pays $0 in Federal Income Taxes
Amazon, the ubiquitous purveyor of two-day delivery of just about everything, nearly doubled its profits to $11.2 billion in 2018 from $5.6 billion the previous year and, once again, didn’t pay a single cent of federal income taxes.
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blog
February 11, 2019
A Tale of Two States: How State Tax Systems Perpetuate Income Inequality
To explain how state tax systems make income inequality worse, we compared tax systems in New Jersey and Texas which, before taxes, have similar levels of income inequality. This comparison provides an example of how policymakers’ decisions affect the economic wellbeing of their constituents.
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blog
February 7, 2019
Trends We’re Watching in 2019
This year is full of opportunity for state policymakers and advocates seeking to improve upside-down tax systems and generate needed funding for shared priorities. In a series of blog posts, ITEP staff summarize key trends we are watching in statehouses this year, with special attention to the many efforts underway to reduce racial and economic inequities and better prepare state budgets for the next recession and reduced federal investments. Along the way, we’ll also draw attention to some of the more destructive policy ideas to watch for in 2019.
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blog
February 7, 2019
Trends We're Watching in 2019: Attempting to Double Down on Failed Trickle-Down Regressive Tax Cuts
It’s always troubling for those concerned with adequate and fair public finance systems when states prioritize tax cuts at the cost of divesting in important public priorities and exacerbating underlying tax inequalities. But it’s even more nerve-racking when it happens on the eve of what many consider to be an inevitable economic downturn.