Adding a property tax deduction back into the Senate bill may sound like a compromise, but a new analysis performed using the ITEP Microsimulation Tax Model reveals that the amount of state and local taxes deducted by Maine residents would plummet by 90 percent under this change, from $2.58 billion to just $262 million in 2019. In short, this change is much more symbolic than substantive.
Carl Davis
Carl Davis is the research director at ITEP, where he has worked since 2008. Carl works on a wide range of issues related to both state and federal tax policy. He has advised policymakers, researchers, and advocates on tax policy issues in nearly every state. Much of his work relates to the link between taxes and economic growth, and the shortcomings of dynamic scoring and supply-side economic theories.
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blog December 1, 2017 Senator Collins Pushes Hard for a Property Tax Deduction that Very Few of Her Constituents Will Be Able to Claim
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blog November 30, 2017 A Corporate Tax Cut Would Benefit Coastal Investors, Not the Heartland
The centerpiece of the House and Senate tax plans is a major tax cut for profitable corporations that the American public does not want, and that will overwhelmingly benefit a small number of wealthy investors living in traditionally “blue” states. New ITEP research shows that poorer states such as West Virginia, Oklahoma, Alabama, and Tennessee would be largely left behind by a corporate tax cut, while the lion’s share of the benefits would remain with a relatively small number of wealthy investors who tend to be concentrated in larger cities near the nation’s coasts.
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media mention November 28, 2017 The Atlantic: The Big Blue Losers in the GOP Tax Plan
Between the mortgage and SALT limits, the bills hit many upper-middle-class taxpayers, especially in blue states. The Institute on Taxation and Economic Policy calculates that by 2027 the Senate bill… -
media mention November 21, 2017 Bloomberg: Should the Upper Middle Class Take the Biggest Tax Hit?
And maybe they should. Higher taxes on the upper middle class make sense to some liberal tax experts—but only if the proceeds are used the right way, they said, for… -
media mention November 17, 2017 Associated Press: Derided by Critics, Trickle-Down Economics Gets Another Try
In the view of Carl Davis, research director at the left-leaning Institute on Taxation and Economic Policy, the track record for supply-side economics “is not particularly inspiring.” In 1981, in… -
media mention November 16, 2017 The Washington Post (Morning Plum): Tax Plan Favors Trump States
The House GOP tax plan nixes most state and local deductions, hitting higher-taxed states harder. Jim Tankersley reports on a new analysis by Carl Davis of the Institute on Taxation… -
media mention November 16, 2017 New York Times: Republican Tax Plan Puts Corporations over People
The plans also differ on their treatment of state and local tax deductions. The Senate would kill them entirely. The House would maintain them only for property taxes and cap… -
blog November 14, 2017 House Tax Plan Offers an Exceptionally Bad Deal for California, New York, New Jersey, and Maryland
An ITEP analysis reveals that four states would see their residents pay more in aggregate federal personal income taxes under the House’s Tax Cuts and Jobs Act. While some individual taxpayers in every state would face a tax increase, only California, New York, Maryland, and New Jersey would see such large increases that their residents’ overall personal income tax payments rise when compared to current law.
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blog November 9, 2017 Flawed Data from House Leadership Attempts to Hide Tax Hikes Under Proposal
In a story published yesterday evening, Politico reported that House leaders have been “working to create customized data models” to show lawmakers that their constituents will not face a tax increase under the tax bill being debated in the House. On this point, House leaders have taken on an impossible task.
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blog November 6, 2017 House Tax Bill Would Reserve Charitable Giving Subsidies for a Small Subset of Wealthier Households
In the tax policy framework released in September, President Trump and Congressional leadership insisted that their proposal would retain the tax incentive for donating to charity because doing so helps “accomplish important goals that strengthen civil society, as opposed to dependence on government.” Now that the House has released a more detailed proposal, it is finally possible to evaluate exactly how their plans would impact the incentive to donate to charity.
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blog November 5, 2017 Mortgage Interest Deduction Wiped Out for 7 in 10 Current Claimants Under House Tax Plan
Throughout the ongoing federal tax debate, President Trump and Congressional leadership have insisted that while many tax deductions and credits would be wiped out, the mortgage interest deduction would be spared from the chopping block. But while the proposal recently unveiled by House leaders retains the mortgage interest deduction on paper, the actual substance of this policy would be nearly unrecognizable to today’s homeowners.
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media mention November 3, 2017 Marketplace: Key Question on The GOP Tax Plan: What’s Your ZIP code?
ITEP Research Director Carl Davis talks to Marketplace about the state and local tax deduction. Read more or listen -
blog November 3, 2017 House Plan Slashes SALT Deductions by 88%, Even with $10,000 Property Tax Deduction
One of the most contentious issues in the current federal tax debate is over what to do with the deduction for state and local taxes paid (the SALT deduction). Since the deduction’s benefits vary by state, the House proposal to drastically scale it back has led to an outcry among lawmakers from states such as New York, New Jersey, and California whose constituents would be impacted most dramatically by the change. In an attempt to address those concerns, House leadership agreed to partially retain the deduction for real estate property taxes paid (up to $10,000 per year) while still repealing the deductions for income and sales taxes.
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blog November 1, 2017 House Tax Plan Will Keep 39.6% Top Rate, But That Won’t Matter for Most Types of Income Going to the Rich
In recent days, news that House tax writers will not seek to cut the top personal income tax rate below 39.6 percent on taxable income above $1 million has led some to question whether the newest iteration of the Trump-GOP tax plan will provide a major windfall to the wealthy—a fact that has so far been widely understood. Unfortunately, this second-guessing is unnecessary.
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blog October 31, 2017 Trump Administration Might Propose a Long-Overdue Gas Tax Increase
The Trump Administration is reportedly considering backing a 7-cent increase in the federal gas tax next year to pay for improvements in the nation’s infrastructure. While most of the tax policy ideas coming from the administration in recent weeks would undermine the nation’s ability to fund core public services, this one is a notable exception.
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media mention October 27, 2017 Fortune: You’re Better off in a State with High Income Tax
Following is an excerpt written by Carl Davis, ITEP’s research director, and published in Fortune. Many lawmakers in Congress and in statehouses around the country peddle the same supply-side theory… -
media mention October 26, 2017 International Business Times: Do Lower Taxes Spur Economic Growth? What Happened In No-Tax States
Researchers at the non-partisan and non-profit Institute on Taxation and Economic Policy compared the nine states without personal income taxes, which include Florida, Texas and Washington, to the nine states… -
report October 26, 2017 Trickle-Down Dries Up: States without personal income taxes lag behind states with the highest top tax rates
Lawmakers who support reducing or eliminating state personal income taxes typically claim that doing so will spur economic growth. Often, this claim is accompanied by the assertion that states without income taxes are booming, and that their success could be replicated by any state that abandons its income tax. To help evaluate these arguments, this study compares the economic performance of the nine states without broad-based personal income taxes to their mirror opposites—the nine states levying the highest top marginal personal income tax rates throughout the last decade.
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blog October 18, 2017 Tax Foundation Updates Its Problematic Wishlist for State Tax Policy
This week the Tax Foundation published its 2018 State Business Tax Climate Index, or as University of Iowa economist Peter Fisher has nicknamed it, the “Waste of Time Index.”
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media mention October 17, 2017 Reveal: The Fight for Public Education
In this radio interview, ITEP research director Carl Davis discusses the downfalls of using tax credits for private education. Carl is featured around the 8:40 mark. Read more -
media mention October 17, 2017 Washington Examiner: Indiana’s Tax Cuts Haven’t Led to Higher Paychecks
Carl Davis for the Institute on Taxation and Economic Policy: In announcing a tax cut framework in Indianapolis that was negotiated with House and Senate leaders, President Trump said, “Indiana… -
blog September 29, 2017 Indiana’s Tax Cuts Under Mike Pence Are Not a Model for the Nation
In announcing a new tax cut framework this week in Indianapolis that was negotiated with House and Senate leaders, President Trump claimed that “Indiana is a tremendous example of the prosperity that is unleashed when we cut taxes and set free the dreams of our citizens …. In Indiana, you have seen firsthand that cutting taxes on businesses makes your state more competitive and leads to more jobs and higher paychecks for your workers.”
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blog August 30, 2017 Private School Voucher Credits Offer a Windfall to Wealthy Investors in Some States
State lawmakers who want to send public dollars to private schools have devised a shrewd tactic for getting around political and constitutional obstacles that make it difficult to do so.… -
media mention August 23, 2017 The Epoch Times: Trump Targets Amazon Over Sales Tax and Retail Jobs
More than half of items sold on Amazon are coming through third-party retailers, according to a CNBC report. These retailers can benefit from Amazon’s facilities or payment system, but they… -
media mention August 17, 2017 New York Times: Does Amazon Pay Taxes?
“If this was five years ago, the tweet would be making a very compelling point,” said Carl Davis, the research director of the left-leaning Institute on Taxation and Economic Policy.…