Lawmakers in many states have enacted “sales tax holidays” (20 states will hold them in 2022) to temporarily suspend the tax on purchases of clothing, school supplies, and other items. These holidays may seem to lessen the regressive impacts of the sales tax, but their benefits are minimal while their downsides are significant—particularly as lawmakers have sought to apply the concept as a substitute for more meaningful, permanent reform or arbitrarily reward people with specific hobbies or in certain professions. This policy brief looks at sales tax holidays as a tax reduction device.
Marco Guzman
Marco Guzman, along with other members of the state policy team, conducts research and analysis to support state policymakers across the country.
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brief July 20, 2022 Sales Tax Holidays: An Ineffective Alternative to Real Sales Tax Reform
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blog March 17, 2022 Arizona Ruling Preserves High-Income Interests Over Education Investments, Popular Vote
An Arizona court decision delivered an unfortunate blow to voters and those in the state who favor a progressive, adequate tax system that can fund critical priorities including K-12 education.
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blog March 9, 2022 A Better Alternative: New Mexico Prioritizes Targeted, Temporary Tax Cuts
New Mexico stands in stark contrast to the many examples of poorly targeted tax-cut proposals currently being considered around the country.
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blog October 4, 2021 State Income Tax Reform Can Bring Us Closer to Racial Equity
To pave the way for a more racially equitable future, states must move away from poorly designed, regressive policies that solidify the vast inequalities that exist today.
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report October 4, 2021 State Income Taxes and Racial Equity: Narrowing Racial Income and Wealth Gaps with State Personal Income Taxes
10 state personal income tax reforms that offer the most promising routes toward narrowing racial income and wealth gaps through the tax code.
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ITEP Work in Action September 9, 2021 Wisconsin Budget Project: Wisconsin’s Billion-Dollar Tax Cut Leaves out a Huge Chunk of Households
Shutting low-income families out of the tax cut will further skew Wisconsin’s tax system, which already requires people with low incomes to pay a higher share of their incomes in… -
brief August 25, 2021 The One Thing Missing From the Qualified Business Income Deduction Conversation: Racial Equity
When crafting tax policy, lawmakers and bill authors often work backward, using a patchwork of changes to help achieve their stated goal. One important consideration that is routinely left out is what impact the change will have on racial equity. Such is the case with the qualified business income deduction, which is helping to further enrich wealthy business owners, the overwhelming majority of whom are white. At present, white Americans own 88 percent of private business wealth despite making up only 60 percent of the population. Meanwhile, Black and Hispanic families confronting much higher barriers to entrepreneurship each own less than 2 percent, despite making up 13 percent and 19 percent of the population, respectively.
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media mention July 15, 2021 Newsweek: Joe Biden’s Stimulus Is Financing GOP’s Billionaire Tax Cuts
“We saw that many states are using better-than-expected revenue outlooks as an excuse to cut personal and corporate income taxes,” Marco Guzman, state policy analyst at the Institute on Taxation… -
blog July 7, 2021 In Drive to Cut Taxes, States Blow an Opportunity to Invest in Underfunded Services
Many states find themselves in a peculiar fiscal situation right now: federal pandemic relief money has been dispersed to states and revenue projections have exceeded expectations set during the pandemic. Meanwhile, more and more workers are returning to jobs as vaccines roll out and typical economic activity resumes. Some states, however, have decided to squander their unexpected fiscal strength on tax cuts.
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blog April 27, 2021 Inclusive Child Tax Credit Reform Would Restore Benefit to 1 Million Young ‘Dreamers’
As the Biden administration maps out the next steps in America’s response to the coronavirus pandemic—through what is now being called the American Families Plan—it should make sure a proposed expansion of the Child Tax Credit (CTC) includes undocumented children who have largely been left out of federal relief packages this past year. Prior to 2017 Tax Cut and Jobs Act, all children regardless of their immigration status received the credit as long as their parents met the income eligibility requirements. This change essentially excluded around 1 million children and their families.
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blog November 30, 2020 After the Dust Has Settled: How Progressive Tax Policy Fared in the General Election
While the results of the 2020 presidential election are all but set in stone—and a sign of life for progressive policy—the results of state tax ballot initiatives are more of a mixed bag. However, the overall fight for tax equity and raising more revenue to invest in people and communities is trending in the right direction.
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blog October 22, 2020 Voters Have the Chance in 2020 to Increase Tax Equity in Arizona, Illinois, and California, And They Should
There’s a lot at stake in this election cycle: the nation and our economy are reeling from the effects brought on by the coronavirus pandemic and states remain in limbo as they weigh deep budget cuts and rush to address projected revenue shortfalls.
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blog September 25, 2020 It’s No Secret—To Save State Budgets End Preferential Treatment of Capital Gains
In an updated policy brief, ITEP explores the flaws in state capital gains tax breaks and highlights how ending special tax breaks provides one of the simplest ways to raise additional revenue and increase equity in the tax system.
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brief September 25, 2020 State Taxation of Capital Gains: The Folly of Tax Cuts & Case for Proactive Reforms
The federal tax system and every state treat income from capital gains more favorably than income from work. Preferential capital gains tax treatment includes exclusions and seldom-discussed provisions like deferral and stepped-up basis, as well as more direct tax subsidies for profits realized from local investments and, in some instances, from investments around the world. This policy brief explains state capital gains taxation, examines the flaws in state capital gains tax breaks, and proposes reform options that will help make state tax systems more progressive and more equitable.
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blog June 26, 2020 Beyond SCOTUS: States Recognize Need for More Inclusive Immigrant Policy
The U.S. Supreme Court last week halted an effort by the Trump administration that would have stripped DACA (Deferred Action for Childhood Arrivals) recipients of their lawful status in the…