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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media mention September 14, 2020 Bloomberg: DeVos-Backed School-Choice Groups Hurt by SALT Rules Crackdown
Critics of state tax credits say the IRS workaround rules were a common-sense effort to address donors double-dipping on tax credits — essentially collecting state and federal tax benefits on… -
media mention September 8, 2020 Politico Morning Tax: They’re back, but stalemate continues
Carl Davis of the progressive Institute on Taxation and Economic Policy wrote a piece last week using new IRS data that specifically focused on the $10,000 cap on state and… -
blog September 3, 2020 Millionaire Population Swells in Blue States Despite Migration Fearmongering
Although the 2017 Tax Cuts and Jobs Act has created a slew of problems, it is now clear that a mass migration of top earners out of higher-tax blue states is not one of them.
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blog September 3, 2020 The Rich Are Weathering the Pandemic Just Fine: Tax Them
Reductions in critical state and local investments, including health care and education, would only exacerbate the economic crisis brought on by COVID-19 and worsen racial and income inequality for years to come. Higher taxes on top earners are among the best options for addressing pandemic-related state revenue shortfalls in the coming months.
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blog August 12, 2020 IRS Rule Leaves the Door Open for Private/Religious School Voucher Donation Schemes, Broader SALT Cap Workarounds
An IRS regulation released last Friday sanctions a widely derided tax dodge that allows profitable businesses to avoid taxes by sending money to private and religious school voucher funds. It also leaves the door open to a brand of state and local tax (SALT) cap workaround that previously appeared to be on its way out.
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media mention July 14, 2020 Law 360: State And Local Tax Policy To Watch In The 2nd Half Of 2020
As states grapple with refilling their coffers in response to the COVID-19 pandemic, tax policy debates in the second half of 2020 could center on revisiting conformity to the federal… -
media mention June 14, 2020 Crain’s New York Business: Legalizing Marijuana Can’t Cure Inequality, But It Will Ease Budget Crisis
My methodology is informed by the work of Carl Davis, research director at the Institute on Taxation and Economic Policy, who recently published a thoughtful blog post on per-capita cannabis excise tax… -
media mention June 5, 2020 POLITICO: States Move Cautiously in Contending With Huge Budget Gaps
“This crisis is still in its very early stages,” said Carl Davis of the Institute on Taxation and Economic Policy. Davis noted that the last recession began in December 2007,… -
media mention April 16, 2020 Politico Morning Tax: We Are Shut Down
In any event, there’s also agreement across the political spectrum that those six states should get rid of those policies. “That would fix this particular issue and could generate revenue… -
blog April 2, 2020 Sales Taxes and Social Distancing: State and Local Governments May Face Their Steepest Sales Tax Decline Ever
One pressing question is what will an economic downturn in which consumers are anxious, facing job loss, or simply spending their time sheltering in place and not spending money in typical ways, mean for states’ ability to raise revenue?
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blog March 18, 2020 It’s Time for Some State Fiscal Policy Triage
The COVID-19 novel coronavirus’s effects on public health and economies at all scales are creating a daunting situation for state budgets as well. Lawmakers can choose and prioritize their responses through a straightforward approach similar to that taken by health professionals: marshal and reinforce available resources, triage response options to prioritize the most vital services and most vulnerable people, and enact or strengthen the policies that will help address longer-term issues as well as immediate emergencies.
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media mention March 12, 2020 The Sacramento Bee: Trump has big plans for California highway repair, but no plan to pay for it
While there’s no way to know how much states increases would be curbed if federal taxes were higher, if at all, Carl Davis, research director at Washington, D.C., Institute on… -
media mention March 11, 2020 Politico: That’s a lot of tax relief
Just looking at sales and excise taxes, the eight states where recreational pot was legal in 2019 raised close to $2 billion in revenue, according to Carl Davis of the… -
blog March 10, 2020 State and Local Cannabis Tax Revenue Jumps 33%, Surpassing $1.9 Billion in 2019
Excise and sales taxes on cannabis raised more than $1.9 billion in 2019. This represents a jump of nearly half a billion dollars, or 33 percent, compared to a year earlier. These are the findings of an ITEP analysis of newly released tax revenue data from the eight states where legal sales of adult-use cannabis took place last year.
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blog March 6, 2020 Talking Taxes in Alaska
Alaska’s tax system underwent major changes in the 1970s when oil was found at Prudhoe Bay. Lawmakers repealed the state’s personal income tax (making Alaska the only state ever to do so) and began balancing the state’s budget primarily with oil tax and royalty revenue instead. But as oil prices and production levels have declined, a yawning gap has opened between state revenues and the cost of providing vital public services.
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March 4, 2020 ITEP Testimony Regarding Connecticut Senate Bill 16, An Act Concerning the Adult Use of Cannabis
This testimony explains the advantages of the cannabis tax structure proposed in Connecticut’s Senate Bill 16 and offers additional background information as well as ideas for potential changes to the bill.
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blog February 26, 2020 Federal Inaction on the Gas Tax is Costing Us Dearly
Lawmakers should keep in mind that transportation funding woes can be traced to the federal government’s extremely outdated gas tax rate, which has not been raised in more than 26 years—not even to keep up with inflation.
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media mention February 25, 2020 The Chicago Tribune: Recreational marijuana sales in Illinois generated more than $10 million in tax revenue in January
Many dispensaries continue to sell recreational marijuana only on certain days of the week or for restricted hours. Though greater volumes of product continue to filter into the market from… -
media mention February 6, 2020 Politico: Cloudy Forecast for Tax Law Fixes
DECOUPLING DEDUCTIONS: Two-thirds of states with property tax deductions set a $10,000 ceiling along the lines of the TCJA’s cap on federal deductions for state and local taxes, according to… -
blog February 5, 2020 States Can Make Their Tax Systems Less Regressive by Reforming or Repealing Itemized Deductions
Itemized deductions are problematic tax subsidies that need to close. The mortgage interest deduction, for instance, is often lauded as a way to help middle-class families afford homes and charitable deductions are touted as incentivizing gifts to charitable organizations. But the dirty little secret is that itemized deductions primarily benefit higher-income households while largely failing to achieve their purported goals.
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report February 5, 2020 State Itemized Deductions: Surveying the Landscape, Exploring Reforms
State itemized deductions are generally patterned after federal law, though nearly every state makes significant changes to the menu of deductions available or the extent to which those deductions are allowed. This report summarizes the key details of each state’s itemized deduction policies and discusses various options for reforming those deductions with a focus on lessening their regressive impact and reducing their cost to state budgets.
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media mention February 3, 2020 Bond Buyer: IRS SALT regulation allows loophole for pass-through businesses
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blog January 29, 2020 ITEP Urges IRS to End SALT Workaround Scheme for Businesses
A new IRS proposal could once again allow wealthy business owners to use state charitable tax credits–including tax credits for donating to support private and religious K-12 schools–to dodge the federal government’s $10,000 cap on state and local tax (SALT) deductions.
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January 29, 2020 ITEP Comments and Recommendations on REG-107431-19
Comments regarding the possibility that owners of passthrough businesses may be able to circumvent the $10,000 SALT deduction cap of section 164(b)(6) by recharacterizing the nondeductible portion of their state and local income tax payments as deductible expenses associated with carrying on a trade or business.
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media mention January 24, 2020 Politico: The Power of Semantics
States’ use of tax incentives to lure the filming of movies and television shows is one of those policy ideas that experts of basically all political persuasions are against —…