American consumers are keenly aware of the price of gasoline, but uninformed about what drives that price. When asked about the federal gas tax, for example, six in ten Americans said the tax rate goes up every year. In reality, the federal gas tax hasn’t budged from its 18.4 cent rate in almost twenty years, and roughly half the states haven’t seen their gas tax rates change in a decade or more.
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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report May 20, 2013 Don’t Blame the Gas Tax for High Gas Prices
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report April 26, 2013 5% Cut in Indiana’s Income Tax is Stacked in Favor of the Wealthy
Indiana Governor Mike Pence and the state’s legislative leaders recently announced a budget agreement that, among other things, phases the state’s flat personal income tax rate down from 3.4 percent to 3.23 percent by 2017.
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report April 8, 2013 Indiana Senate’s Income Tax Cut: Just as Lopsided as the Governor’s
The Indiana Senate Appropriations Committee recently approved a budget cutting the state’s personal income tax rate from 3.4 percent to 3.3 percent beginning in 2015. Although this proposal costs less than one-third the amount of Governor Pence’s preferred cut (which would take the rate down to 3.06 percent), it would still reduce state revenues by roughly $150 million each year.
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report February 28, 2013 States with “High Rate” Income Taxes are Still Outperforming No-Tax States
Lawmakers in about a dozen states are giving serious consideration to either cutting or eliminating their state personal income taxes. In each case, these proposals are being touted as a way to boost economic growth.
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report February 27, 2013 Laffer’s New Job Growth Factoid is All Rhetoric and No Substance
A new talking point printed on the opinion page of The Wall Street Journal is proving irresistible to state lawmakers looking for an excuse to reduce or eliminate their states’ income taxes:
A new analysis by economist Art Laffer for the American Legislative Exchange Council finds that, from 2002 to 2012, 62% of the three million net new jobs in America were created in the nine states without an income tax, though these states account for only about 20% of the national population.
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report February 13, 2013 IDACorp– Biggest Winner Under Property Tax Plan– Pays Nothing in State Income Taxes
Idaho Governor Butch Otter and the state legislature are seriously considering repealing the personal property tax on business equipment. The governor claims that repealing the tax would help the state’s economy, but says that he is “painfully aware” that repeal would dramatically cut into the revenues that many local governments depend on to provide public services. 1 The tax generates $141 million in revenue every year for cities, counties, and public schools. As a result, the Governor says that he “can’t predict” whether lawmakers will be able to reach agreement on repealing the tax.
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report January 23, 2013 More Inaccuracies, Bigger Omissions: Arthur Laffer’s Newest Study of Income Tax Repeal Falls Short
Arthur Laffer’s consulting firm–Arduin, Laffer & Moore Econometrics (ALME)–has released a report purporting to show that North Carolina could usher in an economic boom if it repeals its personal and corporate income taxes and replaces them primarily with a much larger sales tax. Prepared for the Civitas Institute, “More Jobs, Bigger Paychecks” relies on an economic analysis that is fundamentally flawed to the point of making it entirely useless.
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report October 1, 2012 Five Steps Toward a Better Tax Expenditure Debate
Almost without exception, state lawmakers do not closely scrutinize special tax credits, exemptions, and other “tax expenditures” on a regular basis. A recent report by the Pew Center on the States found, for example, that half the states have done nothing even remotely rigorous in the last five years to determine if even a single one of their economic development tax incentives is working.
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report August 27, 2012 Most of Indiana Tax Rate Cut Would Flow to Upper-Income Taxpayers
Alternative Could Provide Larger Tax Cuts for Most Hoosiers Indiana gubernatorial candidate, and current U.S. Representative, Mike Pence recently unveiled his plan to cut the state’s flat personal income tax… -
report April 1, 2012 Repealing Estate Tax Will Not Create An Economic Boom
Since Tennessee Governor Bill Haslam proposed reducing the state’s estate tax in February, Tennessee lawmakers have shown increasing interest in this idea. Recently, a House subcommittee one-upped the governor by… -
report March 24, 2012 Idaho House Tax Plan Stacked In Favor of the Wealthy
Most Tax Cuts Flow to the Top 1%, Vast Majority of Idahoans Receive No Benefit An income tax cut recently passed by the Idaho House of Representatives, and backed by… -
report March 6, 2012 Alaska Senate State Affairs Committee Regarding SB 29, The Alaska Tax Break Transparency Act
My testimony today deals with Senate Bill 29, which would take an important first step toward achieving these goals by requiring regular scrutiny of Alaska “tax expenditures”—that is, the various… -
report February 29, 2012 Testimony on Reinstating Maryland’s “Millionaires’ Tax”
SB 249 would permanently reinstate the “millionaires’ tax” that expired at the end of 2010. This testimony emphasizes that the “millionaires’ tax” makes Maryland’s tax system at least somewhat less… -
report February 15, 2012 Arthur Laffer Regression Analysis is Fundamentally Flawed, Offers No Support for Economic Growth Claims
A November 2011 report from the Oklahoma Council for Public Affairs (OCPA) in partnership with Arduin, Laffer & Moore, a consulting group headed by Arthur Laffer, explains the method that… -
report February 8, 2012 “High Rate” Income Tax States Are Outperforming No-Tax States
Don’t Be Fooled by Junk Economics With the economy lagging, lawmakers seeking to reduce or eliminate state personal income taxes are touting their proposals as tools for boosting economic growth.… -
report December 14, 2011 Building a Better Gas Tax
State gas taxes are currently levied in every state, and are the most important source of transportation revenue under the control of state lawmakers. In recent years, however, state gas… -
brief October 1, 2011 Tax Expenditures: Spending By Another Name
Lawmakers often provide targeted tax cuts to groups of individuals or corporations in the form of special tax breaks–including exemptions, deductions, exclusions, credits, deferrals, and preferential tax rates. These tax breaks have long been called “tax expenditures” because they are essentially government spending programs that happen to be administered through the tax code. However, tax expenditures are usually less visible than other types of public spending and are therefore harder for policymakers and the public to evaluate. This policy brief surveys the difficulties created by tax expenditures, and describes options for better integrating them into the normal budget process.
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brief September 1, 2011 Split Roll Property Taxes
In the past half century, state lawmakers have explored a wide variety of approaches to scaling back property taxes. One such approach is the split roll property tax, also known as a classified property tax. Unlike a regular property tax system which taxes all types of real property at the same rate, a split roll property tax applies different tax rates to different types of property. This policy brief looks at the advantages and disadvantages of the split roll approach.
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brief September 1, 2011 Property Tax Homestead Exemptions
State lawmakers seeking to enact residential property tax relief have two broad options: across-the-board tax cuts for taxpayers at all income levels, and targeted tax breaks. More than 40 states have chosen to achieve across-the-board tax relief by providing a “homestead exemption.” This policy brief explains the workings of the homestead exemption and evaluates its strengths and weaknesses as a property tax relief strategy.
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report May 19, 2011 ITEP’s Testimony on Tax Expenditure Procedural Reform
My testimony today focuses on House Bill 5737, which would enact a variety of reforms designed to enhance the level of scrutiny applied to new tax credits, deductions, exemptions, and… -
report April 14, 2011 States Should Not Allow Amazon.com to Bully Them into Forgoing Sales Tax Reform
In just the last few weeks, Arkansas and Illinois joined New York, North Carolina, and Rhode Island in enacting legislation requiring some online retailers, like Amazon.com, to collect sales taxes… -
report March 10, 2011 Topsy-Turvy: State Income Tax Deductions for Federal Income Taxes Turn Tax Fairness on its Head
The budget outlook for state governments is bleak. Despite evidence that revenues are rebounding, there is a general acknowledgement that ?broad fiscal conditions remain fragile. The need for public investments—particularly… -
report March 9, 2011 Five Reasons to Reinstate Maryland’s “Millionaires’ Tax”
In 2008, Maryland enacted a temporary change to its income tax in order to compensate for revenue lost from repealing a law subjecting computer services to the state’s sales tax.… -
report March 3, 2011 The ITEP Guide to Fair State and Local Taxes
The ITEP Guide to Fair State and Local Taxes, released in March of 2011, offers citizens, activists, journalists, and policymakers a detailed primer on state and local tax policy. The… -
report January 15, 2011 A Capital Idea
The budget outlook for the states is improving, but uncertain. In this context, states must find ways to generate additional revenue that create neither additional responsibilities for individuals and families…