Recent Work by ITEP

Follow the Money to See How Sales Tax Holidays Are Poor Policy

July 17, 2019 • By Dylan Grundman O'Neill

Sales tax holidays are wasteful, misguided policies that will drain more than $300 million of funding away from shared priorities like schools, roads, and health care this year in 16 states, while delivering little benefit to the families that could most use the help. Our newly updated brief reviews recent developments in sales tax holiday policy—including how online sales taxes are changing the picture—and explains why they are a misguided policy option for states. And the story below “follows the money” to show how sales tax holidays are a bad deal for families and communities alike.

Is Your State Holding Sales Tax Holidays in 2019?

July 17, 2019 • By ITEP Staff

Lawmakers in many states have enacted “sales tax holidays” (16 states will hold them in 2019), to provide a temporary break on paying the tax on purchases of clothing, school supplies, and other items. While these holidays may seem to lessen the regressive impacts of the sales tax, their benefits are minimal. ITEP’s policy brief […]

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

July 17, 2019 • By Dylan Grundman O'Neill

Lawmakers in many states have enacted “sales tax holidays” (16 states will hold them in 2019), to provide a temporary break on paying the tax on purchases of clothing, school supplies, and other items. While these holidays may seem to lessen the regressive impacts of the sales tax, their benefits are minimal. This policy brief looks at sales tax holidays as a tax reduction device.

State Rundown Special Edition: Fiscal Year Wrap-Up

July 12, 2019 • By ITEP Staff

We've said it before, and we'll say it again: states don't have to wait for federal lawmakers to make moves toward progressive tax policy. And so far, 2019 has been a good year for equitable and sustainable tax policy in the states. With July 1 marking the start of a new fiscal year for most states, this special edition of the Rundown looks at how discussions in 2019 have been dominated by plans to raise revenue for vital investments, tax the rich and corporations fairly, use the tax code to help workers and families and advance racial equity, and shore…

Does Your State Levy Estate and Inheritance Taxes?

July 12, 2019 • By ITEP Staff

States have been repealing estate taxes since the early 2000s. Now, just 17 states and the District of Columbia (D.C.) levy estate and/or inheritance taxes. Twelve states and D.C. levy estate taxes while six states levy inheritance taxes (Maryland levies both). These taxes have long been used not just to raise revenue for vital public services, but to promote equality of opportunity and reduce the transfer of concentrated wealth from one generation to the next.

Missouri’s Creative Approach to Ending the “Race to the Bottom” in State Business Taxes

July 10, 2019 • By Matthew Gardner

Each year, state and local governments spend billions of dollars on targeted tax incentives—special tax breaks ostensibly designed to encourage businesses to relocate, expand or simply stay where they are. A law enacted by the Missouri legislature creates a template for states to work bilaterally to put the brakes on the “race to the bottom” in state business taxes.

Which States Have the Highest Tax Rates for Low-income People?

July 3, 2019 • By ITEP Staff

No two state tax systems are the same, but 45 states have one thing in common: Low-income residents are taxed at a higher rate than the top 1 percent. This map shows the effective tax rates for the lowest-income 20 percent in each state--ranging from a high of 17.8 percent in Washington to a low of 5.5 percent in Delaware.

ITEP Summer Reading (and Watching) List

July 1, 2019 • By ITEP Staff

Mercury is rising, presidential primary debates are underway and most state legislative sessions have adjourned for summer. Whether you’re curling up with a good book (or your favorite e-Reader) or looking for a new television show to binge-watch, check out these recommendations on ITEP’s Summer Reading (and Watching) List.

Gaps in Sales Tax Collection Linger at Amazon.com and Among Other E-Retailers

July 1, 2019 • By Carl Davis

The last few years have brought big changes to sales tax collection for purchases made at Amazon.com and other e-retail websites. As recently as 2011, Amazon was only collecting sales tax on its direct sales in five states – a fact that gave the company a competitive edge over brick and mortar stores during a critical time in its growth. Today, Amazon is collecting state-level sales taxes on all its direct sales, but it still usually fails to collect sales tax on the large volume of sales it makes through the “Amazon Marketplace.” This points to a broader problem in…

Why Trump Administration’s Plan to Index Capital Gains to Inflation Is Just Another Giveaway to the Wealthy

June 28, 2019 • By Steve Wamhoff

The White House is reported to be planning to unilaterally adjust the way capital gains are assessed to benefit the wealthiest Americans. The proposal would adjust capital gains for inflation, reducing taxes disproportionately for the wealthiest households who own most assets by limiting their taxable gains to those above and beyond the inflation rate.