Former President Donald Trump has proposed a wide variety of tax policy changes. Taken together, these proposals would, on average, lead to a tax cut for the richest 5 percent of Americans and a tax increase for all other income groups.
Matthew Gardner
Matt Gardner is a senior fellow at ITEP where he has worked since 1998. He previously served as ITEP’s executive director from 2006 to 2016. Matt’s work focuses on federal, state and local tax systems, with a particular emphasis on the impact of tax policies on low- and moderate-income taxpayers. He uses ITEP’s microsimulation model to produce economic projections and analyses on the effects of current and proposed federal and state tax and budget policies.
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report October 7, 2024 A Distributional Analysis of Donald Trump’s Tax Plan
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report May 2, 2024 Corporate Taxes Before and After the Trump Tax Law
The Trump tax law slashed taxes for America’s largest, consistently profitable corporations. These companies saw their effective tax rates fall from an average of 22.0 percent to an average of 12.8 percent after the Trump tax law went into effect in 2018.
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blog April 1, 2024 Five Things to Know About Tax Foundation’s Critique of Maryland’s Worldwide Combined Reporting Proposal
Maryland lawmakers are considering enacting worldwide combined reporting (WWCR), also known as complete reporting. This policy offers a more accurate, and less gameable, way to calculate the amount of profit… -
report February 29, 2024 Corporate Tax Avoidance in the First Five Years of the Trump Tax Law
The Trump tax law overhaul cut the federal corporate income tax rate from 35 percent to 21 percent, but during the first five years it has been in effect, most profitable corporations paid considerably less than that.
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brief November 7, 2023 Far From Radical: State Corporate Income Taxes Already Often Look Beyond the Water’s Edge
State lawmakers are increasingly interested in reforming their corporate tax bases to start from a comprehensive measure of worldwide profit. This provides a more accurate, and less gameable, starting point for calculating profits subject to state corporate tax. Mandating this kind of filing system, known as worldwide combined reporting (WWCR), would be transformative, as it would all but eliminate state corporate tax avoidance done through the artificial shifting of profits into low-tax countries.
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blog October 25, 2023 On Corporate Tax Avoidance, Critics Take Aim at ITEP – and Miss
In identifying companies that avoid taxes, ITEP presented evidence that our federal corporate income tax was not working the way most Americans think it should work. The public and lawmakers paid attention, including President Biden who then made the case that this demonstrated the need for reform. As a result, Congress enacted the corporate minimum tax, to make the tax system a bit closer to what most Americans want it to be. If you look closely at this, you might just see an example of democracy working.
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blog September 27, 2023 Moore Case Could Enrich Tax-Avoiding Multinational Corporations – and the SCOTUS Justices Who Own Their Stock
The Moore v. United States case that will soon be heard by the U.S. Supreme Court could jeopardize at least $270 billion if SCOTUS finds the entire transition tax to be unconstitutional. The decision could also invalidate other important parts of the current tax system while preempting progressive wealth tax proposals. Such an outcome would represent one of the costliest—and most ethically questionable – Supreme Court decisions in U.S. history.
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report September 27, 2023 Supreme Corporate Tax Giveaway: Who Would Benefit from the Roberts Court Striking Down the Mandatory Repatriation Tax?
The Supreme Court is set to hear what could become one of the most important tax cases in a century. If decided broadly—with a ruling that strikes down the Mandatory Repatriation Tax for corporations, effectively making it unconstitutional to tax unrealized income—the Roberts Court’s decision in Moore v. US could stretch far beyond the plaintiffs themselves and would put in legal jeopardy many laws that prevent corporations and individuals from avoiding taxes and level the economic playing field.
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blog July 7, 2023 Minnesota’s Tax Battle of 2023 Signals a Turning of the Tide Against Corporate Tax Avoidance
The qualified success of Minnesota’s GILTI conformity—to say nothing of the state’s serious dalliance with the game-changing worldwide combined reporting–sends a clear signal that the days may be coming to an end when big multinationals can scare state lawmakers into allowing them to game the tax system.
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report June 29, 2023 Corporations Reap Billions in Tax Breaks Under ‘Bonus Depreciation’
Since TCJA expanded tax breaks for “accelerated depreciation” starting in 2018, it has reduced taxes by nearly $67 billion for the 25 profitable corporations that benefited the most. Congress is now looking at extending this policy.
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blog May 7, 2023 Minnesota Poised to Enact Landmark Loophole-Closing Corporate Tax Reforms
With Minnesota poised to enact worldwide combined reporting of corporate income taxes, business lobbyists are pulling out all the stops to make state lawmakers believe the apocalypse is upon them.
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report May 4, 2023 Extending Temporary Provisions of the 2017 Trump Tax Law: National and State-by-State Estimates
The push by Congressional Republicans to make the provisions of the 2017 Tax Cuts and Jobs Act permanent would cost nearly $300 billion in the first year and deliver the bulk of the tax benefits to the wealthiest Americans.
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brief November 10, 2022 Twenty-Three Corporations Saved $50 Billion So Far Under Trump Tax Law’s “Bonus Depreciation” that Many Lawmakers Want to Extend
Nearly two dozen of America’s largest corporations together received roughly $50 billion in tax breaks from 2018 through 2021 under a Trump tax law provision that many lawmakers now want to extend. Corporate lobbyists are even asking Congress to extend this “accelerated depreciation” tax break as part of a possible year-end tax bill.
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blog October 31, 2022 Tax Foundation’s ‘State Business Tax Climate Index’ Bears Little Connection to Business Reality
The big problem with the Index is that it peddles a solution that not only falls short of the goal of generating business investment, but one that actively harms state lawmakers’ ability to provide the kinds of public goods – like good schools and modern, efficient transportation networks – that businesses need and want.
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blog August 5, 2022 Corporate Minimum Tax Examples: Apple Would Likely Pay More, 3M Would Not
Apple, one of the largest corporations in the United States despite manufacturing most of its physical products offshore, would likely pay the corporate minimum tax that is included in the Inflation Reduction Act that the Senate is debating this week. 3M, a manufacturer that has about 40 percent of its workforce in the United States, likely would not pay the corporate minimum tax if current trends in the company’s profits and taxes continue, because it is already paying above 15 percent of its profits in taxes.
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blog February 7, 2022 Amazon Avoids More Than $5 Billion in Corporate Income Taxes, Reports 6 Percent Tax Rate on $35 Billion of US Income
Amazon avoided about $5.2 billion of federal income tax on its record $36 billion in U.S. pretax income for fiscal year 2021.
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blog February 1, 2022 Netflix Posts a Record $5.3 Billion in Profits and a Federal Tax Rate of Just 1.1 Percent
Netflix’s 2021 financial report shows it doubled its profits to $5.3 billion from the previous year and reported an effective federal corporate income tax rate of 1.1 percent.
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blog November 18, 2021 Report Illustrates How 70 Corporations Could Be Affected by Minimum Tax Proposal in the Build Back Better Act
Amazon, Bank of America, Facebook, FedEx, General Motors, Google, Netflix, PayPal, T-Mobile and Verizon are just a few of the 70 corporations that would have paid more taxes under the Democrats’ proposed Corporate Profits Minimum Tax (CPMT) if it had been in effect in 2020 according to a new report from Sen. Elizabeth Warren’s office with estimates verified by the Institute on Taxation and Economic Policy.
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report September 21, 2021 Tax Changes in the House Ways and Means Committee Build Back Better Bill
This report finds that the vast majority of these tax increases would be paid by the richest 1 percent of Americans and foreign investors. The bill’s most significant tax cuts — expansions of the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC) — would more than offset the tax increases for the average taxpayer in all income groups except for the richest 5 percent.
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report August 26, 2021 Options to Reduce the Revenue Loss from Adjusting the SALT Cap
If lawmakers are unwilling to replace the SALT cap with a new limit on tax breaks that raises revenue, then any modification they make to the cap in the current environment will lose revenue and make the federal tax code less progressive. Given this, lawmakers should choose a policy option that loses as little revenue as possible and that does the smallest amount of damage possible to the progressivity of the federal tax code.
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report July 29, 2021 Corporate Tax Avoidance Under the Tax Cuts and Jobs Act
Thirty-nine profitable corporations in the S&P 500 or Fortune 500 paid no federal income tax from 2018 through 2020, the first three years that the Tax Cuts and Jobs Act (TCJA) was in effect. Besides the 39 companies that paid nothing over three years, an additional 73 profitable corporations paid less than half the statutory corporate income tax rate of 21 percent established under TCJA. As a group, these 73 corporations paid an effective federal income tax rate of just 5.3 percent during these three years.
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brief May 25, 2021 Income Tax Increases in the President’s American Families Plan
President Biden’s American Families Plan includes revenue-raising proposals that would affect only very high-income taxpayers.[1] The two most prominent of these proposals would restore the top personal income tax rate to 39.6 percent and eliminate tax breaks related to capital gains for millionaires. As this report explains, these proposals would affect less than 1 percent of taxpayers and would be confined almost exclusively to the richest 1 percent of Americans. The plan includes other tax increases that would also target the very well-off and would make our tax system fairer. It would raise additional revenue by more effectively enforcing tax laws already on the books.
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blog May 18, 2021 IRS Clock Runs Out, Saving 14 Large Companies $1.3 Billion
Each year, corporations publicly state that some of the tax breaks they claim are unlikely to withstand scrutiny from tax authorities. And each year, corporations report that they will keep some of the dubious tax breaks they declared in previous years simply because the statute of limitations ran out before tax authorities made any conclusions. This suggests that, perhaps because of cuts to its enforcement budget, the IRS is not even investigating corporations that publicly announce they have claimed tax breaks that tax authorities would likely find illegal.
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brief May 6, 2021 Effects of the President’s Capital Gains and Dividends Tax Proposals by State
President Biden’s proposal to eliminate the lower income tax rate on capital gains (profits from selling assets) and stock dividends for millionaires would affect less than half of one percent (0.4 percent) of U.S. taxpayers if it goes into effect in 2022. The share of taxpayers affected would be less than 1 percent in every state.
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blog April 19, 2021 Nike’s Tax Avoidance Response Does not Dispute It Paid $0 in Federal Income Tax
It was (allegedly) P.T. Barnum who first said “there’s no such thing as bad publicity.” But the public relations professionals at the Nike Corporation clearly disagree with this maxim. Last week, after multiple media outlets, including the New York Times, wrote about ITEP’s conclusion that Nike avoided federal corporate income taxes under the Trump tax law, the company contacted these news organizations to… change the subject.