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.
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 August 26, 2021 Options to Reduce the Revenue Loss from Adjusting the SALT Cap
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media mention July 29, 2021 Common Dreams: 73 Major Corporations Paid Just 5.3% Federal Tax Rate Between 2018 and 2020: Report
Thirty-nine U.S. corporations reaping over $120 billion in profits between 2018 and 2020—the first three years of the so-called “GOP tax scam”—paid no net federal income tax, or claimed refunds… -
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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media mention July 14, 2021 Washington Post: As IRS audits waned, big businesses racked up unapproved tax breaks
One challenge for the IRS is that each company tends to interpret tax laws differently, says Matt Gardner, a senior fellow at the Institute on Taxation and Economic Policy, a… -
media mention July 8, 2021 Napa Valley Register: California’s progressive tax system proved its worth during the pandemic
In fact, the Institute on Taxation and Economic Policy reports that California’s tax system does the most of any state to alleviate inequality — while taxes in most states serve… -
media mention July 8, 2021 Politico: As Bezos called for tax hikes, Amazon lobbied to keep its tax bill low
“It’s very likely they’re getting hundreds of millions of dollars a year in R&D tax credits,” said Matthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy,… -
media mention July 8, 2021 New York Post: Jeff Bezos openly embraces tax hikes, but Amazon lobbied against them
Matthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy, who’s studied the tax habits of Amazon and other big companies, told Politico that Amazon is likely… -
media mention June 4, 2021 Talking Points Memo: If Biden’s Corporate Tax Offer Isn’t A Feint, Then It’s A Massive Concession
Their specific opposition to the corporate tax hike, Matt Gardner, corporate tax expert at the left-leaning Institute on Taxation and Economic Policy, told TPM, is part of their “hidebound refusal… -
media mention May 28, 2021 Vox: You should be suspicious of benevolent big business
Amazon, like a lot of big companies, is good at keeping its tax bill low. In some recent years, it’s paid zero federal income tax; it’s managed to pay very… -
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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media mention May 4, 2021 New York Times: Amazon Had a Big Year, but Paid No Tax to Luxembourg
Matthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy, a left-leaning research group in Washington, said Amazon’s Luxembourg filing showed why there was such urgency, not… -
media mention April 30, 2021 Associated Press: Biden’s corporate tax plan takes aim at income inequality
“It’s a terrific plan,” said Matthew Gardner, senior fellow at the left-leaning Institute on Taxation and Economic Policy. “We cannot have a sustainable corporate tax system until we solve this… -
media mention April 29, 2021 USA TODAY: Biden cites left-leaning study that 55 of top U.S. companies paid no federal income taxes
The ITEP report was based on a review of annual financial records by the nation’s largest publicly traded companies for their most recent fiscal year. Wamhoff noted that Biden on… -
media mention April 28, 2021 89.3 WFPL: LG&E’s Parent Company Paid No Federal Taxes Last Year (Kentucky)
In a year when Kentuckians struggled to pay their utilities bills because of a global pandemic, Louisville Gas and Electric’s parent company paid nothing in federal taxes. PPL reported around… -
media mention April 26, 2021 Morning Call: PPL Corp. and other companies with Lehigh Valley ties paid zero U.S. taxes in 2020
Matthew Gardner, a senior fellow with the Institute on Taxation and Economic Policy and co-author of the organization’s report, said PPL documents show the company made pre-tax U.S. income of… -
media mention April 23, 2021 Bloomberg: Firms Shuffle Intangible Assets Abroad Despite U.S. Tax Break
President Joe Biden and other Democrats have said FDII has been ineffective and should be replaced or revamped. While the concerns they’ve voiced about FDII aren’t directly related to the… -
April 21, 2021 On Corporate Tax Avoidance “[A majority of people] recognize this basic unfairness: When you give big companies tax breaks, you’re taking them away from small businesses. The corporate tax reform… -
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.
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media mention April 15, 2021 Washington Post: Biden proposals may not guarantee all Fortune 500 corporations pay federal income taxes, experts say
Of the 55 corporations that did not pay federal income taxes in 2020, only five had more than $2 billion in net income, according to the report by the Institute… -
media mention April 14, 2021 Common Dreams: Jayapal Calls for Crackdown on Wealthiest After IRS Chief Says Tax Evasion Costs US $1 Trillion a Year
Furthermore, another recent study by the Institute on Taxation and Economic Policy (ITEP) showed that 55 U.S. corporate giants paid $0 in federal income taxes last year, and 26 of… -
media mention April 14, 2021 Willamette Week: Nike’s Tax Bill in Oregon Is a Secret. We Asked Three Analysts to Make an Estimate.
The breakdown of that percentage among states is impossible to know, [Matthew Gardner, ITEP Senior Fellow] says, especially considering not every state has the same single-factor corporate tax structure that… -
media mention April 10, 2021 CNN: Jeff Bezos endorsed higher corporate tax rates. But it won’t cost him much
Amazon (AMZN) isn’t doing anything illegal or improper — or unusual. Few corporations pay 21% of their reported pre-tax earnings in corporate income tax. That’s because there are many ways… -
report April 8, 2021 National and State-by-State Estimates of President Biden’s Campaign Proposals for Revenue
During his presidential campaign, Joe Biden proposed to change the tax code to raise revenue directly from households with income exceeding $400,000. More precisely, Biden proposed to raise personal income taxes on unmarried individuals and married couples with taxable income exceeding $400,000, and he also proposed to raise payroll taxes on individual workers with earnings exceeding $400,000. Just 2 percent of taxpayers would see a direct tax hike (an increase in either personal income taxes, payroll taxes, or both) if Biden’s campaign proposals were in effect in 2022. The share of taxpayers affected in each state would vary from a low of 0.6 percent in West Virginia to a high of 3.5 percent in New Jersey.