The president’s budget proposal would cut the agency’s baseline funding from $12 billion to $11.1 billion this year. This is almost a quarter less, in inflation-adjusted terms, than the $14.4 billion the agency received in fiscal year 2010. Not surprisingly, the long, steady decline of IRS funding during this period has led to a reduction in staffing: the agency’s 2016 employee total of 77,000 was 17,000 lower than at the beginning of the decade.
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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blog February 14, 2018 GOP Dilemma: Love the Tax Cut, Hate the Agency that Administers It
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blog February 13, 2018 Amazon Inc. Paid Zero in Federal Taxes in 2017, Gets $789 Million Windfall from New Tax Law
The online retail giant has built its business model on tax avoidance, and its latest financial filing makes it clear that Amazon continues to be insulated from the nation’s tax system. In 2017, Amazon reported $5.6 billion of U.S. profits and didn’t pay a dime of federal income taxes on it. The company’s financial statement suggests that various tax credits and tax breaks for executive stock options are responsible for zeroing out the company’s tax this year.
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media mention February 13, 2018 CNBC: Trump’s Budget May Delay Future Tax Refunds
The president released his budget Monday for fiscal 2019, proposing $11.1 billion for the Internal Revenue Service, including $2.3 billion for tax filing and compliance applications and $110 million to… -
blog February 9, 2018 The More Things Change: PG&E Records a Tenth Straight Year of No Federal Income Taxes
In the runup to last fall’s tax debate, it was commonly observed that corporate tax reform is both easy and hard: the easy part is cutting the rate, and the hard part is paying for it by closing loopholes. The real test of Congress’ determination to achieve tax reform would be whether they would stand up to corporate lobbyists and shut down loopholes like accelerated depreciation that allow profitable companies to pay little or no income tax. As is now widely known, Congress was not especially determined: lawmakers aggressively cut the corporate rate from 35 to 21 percent, but then expanded depreciation tax breaks instead of repealing them. This week the utility giant (and notable tax avoider) PG&E released its annual financial report assessing the short-term impact of the tax bill on its bottom line. The report shows that even after taking a short-term $147 million tax hit in 2017, the company still won’t pay a dime of current federal income taxes, on balance, on $2.1 billion of income overall.
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blog January 31, 2018 How Exxon’s Empty $50 Billion Promise Made Its Way into Trump’s SOTU
Never one to let the truth get in the way of a good story, House Speaker Paul Ryan immediately published a press release with the headline, “ExxonMobil to Invest an Additional $50 Billion in the U.S. Due to Tax Reform.” The statement was completely faithful to ExxonMobil’s statement, except for the words “additional” and “due to tax reform.” Not to be outdone, President Trump implied during his State of the Union address that the company was investing $50 billion in response to the new tax law.
But a closer examination of ExxonMobil’s recent history of domestic spending finds that the “new” $50 billion investment is less than what the company invested over the previous five years.
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media mention January 30, 2018 HuffPost: Companies Are On A Cheap Charm Offensive For Trump’s Tax Bill
Meanwhile, Walmart, the nation’s largest private employer, announced it would spend an additional $700 million over the next two years on employee pay, thanks to the tax bill. That’s less… -
media mention January 25, 2018 Albany Times Union: Schumer Points to Layoffs to Counter GOP’s Rosy Tax-Law Forecast
In Schumer’s estimation, those with plenty of cash on hand will spend less of their tax windfall on bonuses and wages than on shareholder dividends and stock buybacks — which… -
blog January 24, 2018 It’s a Small Bonus After All
The Walt Disney Corporation announced this week that in the wake of the new tax bill’s passage, it will spend $125 million on one-time bonuses and $50 million on an education program for some employees, all in 2018. This $175 million spending commitment is notable for two reasons: it’s temporary, and it’s a drop in the bucket for a company that’s likely to see annual tax savings of $1.2 billion a year and has already committed to a $50 billion-plus corporate acquisition of 21st Century Fox’s assets.
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media mention January 23, 2018 CBS News: Trump’s Economic Score: After Tax Cuts, Not too Much
The tax plan aims to pump $1.5 trillion worth of breaks into the nation’s economy over the next 10 years. Although the bulk of the benefits go to companies and… -
media mention January 18, 2018 BBC: Apple to Pay $38 Billion on Foreign Cash Pile
Apple is to bring billions of dollars back to the US, and pay a $38bn tax bill as a result. We get analysis from Thomas Brennan, a law professor specialising… -
blog January 18, 2018 Apple Gambled on Congressional Spinelessness on Tax Policy— and Won
Now, Apple Inc. would like the American public to know that it has “a deep sense of responsibility to give back to our country” a small fraction of its multi-billion-dollar tax cut haul. However, the company’s splashy press release is devoid of any specifics on the jobs it will create as a result of the tax bill. Like other corporate announcements, the company’s recent proclamation of newfound patriotism should be viewed as a public relations ploy designed to convince a skeptical public that working families will see some trickle-down benefit from this historic corporate giveaway.
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media mention January 12, 2018 New York Times: Walmart’s Bumpy Day: From Wage Increase to Store Closings
Matt Gardner, a senior fellow at the Institute on Taxation and Economic Policy, a nonprofit research group, said it was difficult to forecast precisely how much Walmart would save. But… -
blog January 12, 2018 Walmart’s Minimum Wage Hike: Did the Tax System Make Them Do It?
The Walmart corporation announced this week that it will increase its minimum wage to $11 an hour, in a move that the company attributed to the major corporate tax cut signed into law by President Trump last month. The $300 million the company will spend on the wage boost is just a fraction of the more than $2 billion a year ITEP estimates Walmart could net from the corporate tax rate cuts that took effect January 1—but even so, the company felt the need to make the wage boost more affordable by simultaneously closing 63 Sam’s Club stores and laying off thousands of employees. For all the press fanfare surrounding the wage announcement, the quiet layoffs are likely a more meaningful indicator of what awaits the American worker in the wake of the Trump tax cuts.
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blog January 11, 2018 Using Private Debt Collectors as a Substitute for the IRS Is a Bad Deal
If President Trump is indeed a deal maker, then he should dismantle Congress’s decision to rely on private debt collectors as a substitute for the Internal Revenue Service. This decision, championed for years by Sens. Charles Grassley, R-Iowa, and Chuck Schumer, D-New York, is a lousy deal for everyone–American taxpayers, the federal government–except private debt collectors.
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blog January 10, 2018 New Tax Breaks for Craft Beer Are a Drop in the Barrel: 76 percent of Tax Bill’s Beer Tax Cut Goes to a Handful of the Biggest Producers
The $1.5 trillion tax cut that took effect on Jan.1 was never really going to be about small businesses, despite President Trump’s transparently false claims to the contrary. However, one economic sector still appears happy, for now, to hoist a mug to Congress’s successful sleight of hand: craft breweries.
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media mention January 9, 2018 The Hill: Why You Shouldn’t Pay Attention to What Companies Say about Their Tax Bills
Following in an excerpt from an op-ed by ITEP Senior Fellow Matthew Gardner that appear in The Hill: A flurry of announcements by corporate giants such as Goldman Sachs, Morgan… -
blog January 9, 2018 New Tax Law Allows Affluent Taxpayers to Write off K-12 Private School Tuition
Taxpayers are still learning about the intended and unintended consequences of the major tax overhaul that Republican leaders ramrodded through late last year. One little-noted provision subverts state laws that… -
blog December 22, 2017 Corporate America, You Just Got a $650 Billion Tax Cut! What Are You Going to Do Next?
While many Fortune 500 CEO’s likely had to restrain themselves from preemptively shouting “we’re going to Disneyland” in an homage to the Disney Corporation’s trademark ad spot involving the winner of each year’s Super Bowl, it’s pretty understandable that several of them—including known tax avoiders AT&T, Boeing, Comcast and Wells Fargo—would preemptively make grandiose promises that they will reserve part of their tax cuts for the little people who made it all possible.
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media mention December 22, 2017 Investors’ Business Daily: GE Cash Crunch That Hit Dividend May Get Worse Under Trump Tax Cuts
Companies had held off on paying income taxes on foreign earnings until those funds are returned, or repatriated, to the U.S. The 35% domestic rate has led several companies to… -
media mention December 22, 2017 Associated Press: Windfall for Workers Too?
Since the Senate passed its initial tax overhaul, 32 companies have announced share buybacks totaling $83.7 billion, Schumer’s office said. Matthew Gardner, a senior fellow at the liberal Institute on… -
media mention December 22, 2017 CBS News: Bonuses for Some Workers After Tax Bill Passes
Matthew Gardner, a senior fellow at the liberal Institute on Taxation and Economic Policy, said companies have been sitting on large cash holdings for years that easily could have gone… -
media mention December 21, 2017 WJLA: Republicans Predict Voters Will Like Tax Bill Once They See Benefits
Matt Gardner, a senior fellow at the Institute on Taxation and Economic Policy, said it is important to look beyond the headlines to put these bonuses in context. An ITEP… -
media mention December 21, 2017 CNBC: Here’s How the Tax Bill Will Affect the Richest 1 Percent in All 50 States
On Wednesday, the House approved a sweeping overhaul of the nation’s tax code. President Donald Trump is expected to sign the legislation soon. As for how it will affect individuals,… -
media mention December 20, 2017 The Hill: The most surprising winners from Trump’s ‘America First’ tax plan are not American
Following is an excerpt from an op-ed by ITEP Senior Fellow Matthew Gardner: When President Trump announced in his inauguration speech that he would pursue a policy of “America First,”… -
media mention December 19, 2017 CNBC: Tax Expert: Middle-Income Families an ‘Afterthought’
Tax expert: Middle-income families an ‘afterthought’ in GOP tax plan from CNBC.