The Trump Administration is pushing to add or strengthen work requirements for programs that benefit low- and middle-income people but holds a different view when it comes to the wealthy. Most tax cuts enjoyed by the richest 1 percent of households under the recently enacted Tax Cuts and Job Act (TCJA) are tax cuts for unearned income.
Steve Wamhoff
Steve Wamhoff is ITEP’s director of federal tax policy. In this role, he is responsible for setting the organization’s federal research and policy agenda. He is the author of numerous reports and analyses of federal tax policies as well as in-depth policy briefs that outline how the federal income tax and corporate tax code can be overhauled to improve tax fairness.
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blog May 10, 2018 No Work Requirements for the Richest 1 Percent — Most of Their Tax Cuts Are for Unearned Income
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blog May 2, 2018 New UK Law May Shut Down the Biggest Tax Havens — Aside from the U.S.
The United Kingdom’s parliament has enacted a new law requiring its overseas territories — which include notorious tax havens like Bermuda, the Cayman Islands, and the British Virgin Islands — to start disclosing by 2020 the owners of corporations they register. This could shut down a huge amount of offshore tax evasion and other financial crimes because individuals from anywhere in the world, including the United States. have long been able to set up secret corporations in these tax havens to stash their money.
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blog April 19, 2018 Congressional Budget Office: New Tax Law Helps Foreign Investors Even More than You Thought
President Trump and his allies in Congress have made many wild claims about economic growth that would result from the Tax Cuts and Jobs Act. And the Congressional Budget Office just released a report revealing the TCJA will, in fact, create economic growth — for foreign investors.
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report April 11, 2018 Who Pays Taxes in America in 2018?
America’s tax system overall is marginally progressive. The share of all taxes paid by the richest Americans slightly exceeds their share of the nation’s income. Conversely, the share of all taxes paid by the poorest Americans is slightly smaller than the share of the nation’s income going to that group.
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blog April 10, 2018 New ITEP Report: Extension of the Temporary TCJA Provisions Would Be Just as Regressive as TCJA Itself
A new ITEP report estimates the impacts in every state of the much-discussed idea of extending the temporary provisions in the Tax Cuts and Jobs Act, which will expire after 2025 without further action from Congress. The report concludes that extending or making permanent these provisions would be just as skewed to the wealthy as the original law.
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report April 10, 2018 Extensions of the New Tax Law’s Temporary Provisions Would Mainly Benefit the Wealthy
This analysis finds that extending the temporary tax provisions in 2026 would not be aimed at helping the middle-class any more than TCJA as enacted helps the middle-class in 2018.
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blog February 14, 2018 A Gas Tax Hike Is the Obvious Answer to Infrastructure Funding
As part of his budget plan released Monday, President Trump offered an infrastructure proposal that he describes as a $1.5 trillion 10-year surge in infrastructure investments. The details of the proposal explain that the federal government would put up only $200 billion of this total, which the administration claims will be offset with cuts in other spending. Even this relatively meager funding amount is illusory because it would clearly be financed by cutting other federal spending — including infrastructure investments.
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blog February 3, 2018 How Much Will Typical Middle-Class Workers Really See Their Paychecks Change?
The campaign by Republican leaders in Congress to promote their new tax law has two prongs. One is the claim that corporate income tax cuts are already trickling down to workers, which, as we have explained, is believed by basically no economists anywhere. The other prong of their campaign is to argue that the personal income tax cuts will provide a noticeable decline in withholding from paychecks that middle-class people will notice soon. At this point, it’s helpful to look at some actual data and see how small the boost in take-home pay will really be for most Americans.
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blog January 31, 2018 Fact-Checking Trump’s State of the Union Address on Tax Issues
Here are some claims the President made during his State of the Union address, along with the facts.
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blog January 26, 2018 Moody’s and Conservative Economists Agree: The Trump Corporate Tax Cut Is Not Helping Workers
Moody’s does not believe that corporate tax cuts are trickling down to working people as bonuses and pay raises. The real problem with the corporate PR campaign is that even those economists who supported Trump’s corporate tax cut and claimed it would help workers do not believe that it works this way.
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blog January 25, 2018 IRS Can and Should Block “Charitable Contribution” Schemes
States’ attempts to work around the new federal tax law and ensure their residents continue to maximally benefit from state and local tax (SALT) deductions have been in the news since the beginning of the year. At a panel discussion for tax professionals in Washington Thursday, Thomas West, tax legislative counsel at the Treasury Department, cast doubt on proposed work-around schemes that would convert state income tax payments into “charitable contributions.”
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blog January 17, 2018 Repealing, or Working Around, the Cap on State and Local Tax Deductions Would Make the Trump-GOP Tax Law Even More Unfair
A bipartisan proposal in Congress to eliminate the new $10,000 cap on federal deductions for state and local taxes (SALT) would cost more than $86 billion in 2019 alone and two-thirds of the benefits would go to the richest 1 percent of households. Unfortunately, “work around” proposals in some states to allow their residents to avoid the new federal cap would likely have the same regressive effect on the overall tax code.
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blog January 12, 2018 The Walmart Smiley Face Is Lying: Corporate Tax Cuts Are Not Causing Pay Raises and Bonuses
Last night, Yahoo reported that 81 corporations had announced pay raises and bonuses that they claim result from the Trump-GOP tax law’s reduction in the official corporate tax rate from 35 percent to 21 percent. Of these 81 corporations, 13 were included in ITEP’s most recent corporate tax study, which focuses on the Fortune 500 companies that were profitable every year from 2008 through 2015. These 13 companies had a combined effective tax rate of just 19.1 percent, which undermines the idea that the federal corporate tax rate was holding back their ability to pay workers.
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blog December 19, 2017 Final Tax Bill Hits Parents of College Students Harder than Other Taxpayers
While many provisions targeting higher education in previous versions of the tax plan were eventually dropped, little thought has been given to how the bill still raises taxes on parents at the time they are trying to pay for college tuition.
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blog December 15, 2017 Final Tax Bill Reported to Provide Senator Rubio With Much Smaller Improvement for Children than He Demanded
The latest news on the GOP tax bill is that, in order to secure the vote of Senator Marco Rubio, Republican leaders have agreed to expand the child tax credit — but only by a fraction of the amount that Rubio initially demanded.
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blog December 13, 2017 Latest “Compromise” for Tax Plan Is Even Worse than Previous Proposals, Would Reduce the Plans’ “Losers” by Less than 17,000 Taxpayers
Earlier this week, ITEP explained that two possible “compromises” to improve the Senate tax bill would accomplish very little other than make the plan more expensive. Incredibly, Republican leaders are… -
blog December 13, 2017 Parents of College Students: The Tax Plans’ Losers that No One Is Talking About
Parents of college students or kids in their last years of high school are more likely to face a tax hike than others under the tax legislation moving through Congress. Higher education has entered the tax debate because the House bill (but not the Senate bill) would repeal several provisions that make college and graduate education more accessible. But little thought has been given to how the tax bills would affect the parents of college students in more direct ways and make it difficult for them to finance college for their kids. If tax legislation were allowed a reasonable number of hearings and time for debate, this is exactly the sort of issue that could be addressed.
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blog December 12, 2017 Who Is “America First” Under the Tax Plan? The Rich First, Foreign Investors Second, Then the Rest of Us.
In his inaugural speech, President Trump told the world that Washington would be driven by a principle of “America First.” But the tax plans moving through Congress only put the richest Americans first. Everyone else comes after foreign investors.
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blog December 12, 2017 Treasury’s 1-Page Memo Reasserts False Claims that Tax Cuts Largely Pay for Themselves — But Only When Accompanied by Spending Cuts
Treasury Secretary Steven Mnuchin claimed for weeks that his department would release a study showing that the $1.5 trillion tax cut moving through Congress would “pay for itself.” On Monday he released a one-page memo that asserts, without evidence, that economic growth resulting from President Trump’s policies would raise enough revenue to more than offset the costs of the tax cuts.
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blog December 10, 2017 “Compromises” Under Discussion for the State and Local Tax Deduction Do Not Fix Flawed Tax Bills
Republicans in Congress are reported to be considering two versions of a change they claim would “improve” the current bills by making them more generous to residents of higher-taxed states. As illustrated by these estimates, the reality is that these proposals would make little difference on those states and taxpayers hit hardest.
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blog December 10, 2017 Even with Potential SALT Compromises, Senate Bill Forces California and New York to Shoulder a Larger Share of Federal Taxes While Texas, Florida, and Other States Will Pay Less
The Senate tax bill, with or without either of the compromises that could be added to it, would shift personal income taxes away from Florida and Texas to states like California and New York, which are already paying a high share relative to their populations.
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blog December 1, 2017 New ITEP Report Explains How Tax Reform Should Eliminate Breaks for Real Estate Investors Like Trump
A new report from ITEP provides more details on the many breaks and loopholes for wealthy real estate investors like Trump and what a true tax reform would do to close them.
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blog November 30, 2017 Republican Senators Debate Size of “Pass-Through” Break, But Proposed Compromises Will Make No Difference to Anyone Who Is Not Well-Off
Senators Ron Johnson of Wisconsin and Steve Daines of Montana want the tax bill on the Senate floor to be amended to offer a more generous tax break for “pass-through” businesses. We have estimated how all the provisions in the tax bill would impact each income group under three possible scenarios. The only thing different in each scenario is the size of the deduction for pass-through income: 17.4 percent (the deduction in the bill as this is written), 20 percent and 27 percent. We find that the size of the pass-through break makes no difference for anyone who is not well off.
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blog November 30, 2017 Chained CPI Would Raise Everyone’s Personal Income Taxes in the Future, Would Hurt the Poor Right Away
One of the findings is that every income group would face higher personal income taxes in years after 2025 (including 2027). Chained CPI would gradually push taxpayers into higher income tax brackets and make the standard deduction, the Earned Income Tax Credit, and several other breaks less generous over time. The switch to chained CPI would cause some low-income people to face a tax hike starting in 2019, the second year the plan would be in effect.
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blog November 22, 2017 Mick Mulvaney and the 19 States Paying Higher Taxes Under the Senate Tax Bill
One of the more surprising findings of ITEP’s recent estimates on the Senate tax bill is that 19 states would pay more overall in federal taxes if the bill becomes law. This is not just an increase in the personal income taxes paid (which would happen in some states under the House bill). This is an increase in their net federal taxes overall, even including the assumed benefits of corporate tax cuts and estate tax cuts.