For years, Americans have been told that the rich are paying a highly disproportionate share of the nation’s taxes. Claims to that effect often focus on just one tax, the federal personal income tax, which is indeed progressive overall. But when the nation’s tax system is viewed in its entirety, it becomes clear that the reality is very different. Despite their enormous incomes and wealth, the nation’s richest taxpayers are paying a share of overall taxes that slightly exceeds their share of 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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report April 11, 2019 Who Pays Taxes in America in 2019?
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report April 11, 2019 Corporate Tax Avoidance Remains Rampant Under New Tax Law
For decades, profitable Fortune 500 companies have been able to manipulate the tax system to avoid paying even a dime in tax on billions of dollars in U.S. profits. This ITEP report provides the first comprehensive look at how the new corporate tax laws that took effect after the passage of the 2017 Tax Cuts and Jobs Act affects the scale of corporate tax avoidance.
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blog April 10, 2019 The Working Families Tax Relief Act Would Boost Incomes and Economic Security for Workers and Children
Sens. Sherrod Brown, Michael Bennet, Richard Durbin, and Ron Wyden (along with the backing of most of the Democratic caucus in the Senate) today rolled out a new proposal to expand the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC). Called the Working Families Tax Relief Act (WFTRA), the proposal would provide a substantial benefit, especially to low-income working families.
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media mention April 9, 2019 Fast Company: Soak the Rich but How?
“Right now, the personal income tax has all kinds of special breaks,” says Steve Wamhoff, the director of federal tax policy at the Institute on Taxation and Economic Policy, who… -
media mention April 3, 2019 New York Times: A Man with a Plan for Inequality
Their largest holdings often include stocks. Which means that the lower tax rate on capital gains, combined with the deferral of taxing them, has enormous financial consequences, as Steve Wamhoff,… -
media mention April 3, 2019 CNBC: What the Wyden-Proposed Tax on Unrealized Capital Gains Might mean for You
Marking an asset to market means that you’re treating it as if you’ve sold it for fair market value at the end of the year, accounting for the gain or… -
blog April 2, 2019 Sweeping Reform Would Tax Capital Gains Like Ordinary Income
Sen. Ron Wyden of Oregon, the ranking Democrat on the Senate Finance Committee, announced that he would soon release a proposal to eliminate massive tax breaks enjoyed by the wealthy on their capital gains income. If successful, the proposal would ensure that income from wealth is taxed just like income from work.
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media mention April 2, 2019 Bloomberg: Key Democrat Revives Plan to Make Capital Gains Tax Due Annually
And Steve Wamhoff, the director of federal tax policy at the left-leaning Institute on Taxation and Economic Policy, said the bill “would certainly slow down the ability of billionaires to… -
February 28, 2019 Americans have long wanted progressive taxes but few, if any, lawmakers publicly backed this view. What’s happening now isn’t a shift in public opinion, rather it’s Washington finally catching up… -
media mention February 20, 2019 New York Observer: Amazon Paid $0 in Federal Taxes Despite Making $11 Billion in 2018—And No One Knows Why
You may feel like a champion financial planner after filing last year’s income taxes, even though you did pay a hefty fee to an accountant or some tax software. But… -
media mention February 16, 2019 Yahoo! Finance: Amazon Will Pay $0 in Taxes on $11,200,000,000 in Profit for 2018
“It’s hard to know exactly what they’re doing,” said Steve Wamhoff, ITEP’s Director of Federal Tax Policy. “In their public documents they don’t lay out their tax strategy. So it’s unclear exactly which breaks [the company is taking advantage of]. They vaguely say tax credits. One could think of many different ways a corporation could do this, like the depreciation breaks which were expanded under TCJA.”
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report February 14, 2019 The Illusion of Race-Neutral Tax Policy
It is well known that the bulk of the federal tax cuts flowed to the highest-earning households, who received the largest tax cut both in terms of real dollars and also as a share of income. But as our analysis with Prosperity Now reveals, solely examining the tax law in the context of class misses a bigger-picture story about how the nation’s public policies not only perpetuate widening income and wealth inequality, they also preserve historic and current injustices that continue to allow white communities to build wealth while denying the same level of opportunity (and often suppressing it) to communities of color.
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blog February 13, 2019 SALT Deduction Cap Should be Reformed, Not Repealed
On Monday a group of Senators and Representatives from the Northeast announced their latest proposal to repeal the cap on deductions for state and local taxes (SALT), this time offsetting the costs by restoring the top personal income tax rate to 39.6 percent.
This is an improvement over previous proposals to repeal the cap on SALT deductions without offsetting the costs at all. But the new approach does not improve our tax system overall. Instead, it trades one tax cut for the rich (a lower top income tax rate) for another (repeal of the cap on SALT deductions).
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February 6, 2019 Shared Prosperity: A Progressive Approach to Marginal Tax Rates
Panel: In recent years, economists have been engaged in robust academic debate over the top marginal tax rate, with leading researchers estimating the optimal rate to be 73 percent or even higher. Yet despite widespread public support for raising the rate from its current level of 37 percent, many policymakers and media figures have demonstrated misunderstandings over what marginal tax rates are and how they work.
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blog February 5, 2019 New ITEP Report Shows How Congress Can Meet Public Demand for Progressive Taxes
A recent headline tells us that bold tax plans proposed by lawmakers today reflect a “profound shift in public mood.” But, in fact, the public’s mood has not changed at all. Americans have long wanted progressive taxes but few, if any, lawmakers publicly backed this view. What’s happening now isn’t a shift in public opinion, rather it’s Washington finally catching up with the American people.
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media mention February 5, 2019 Washington Post: Live Commentary on Trump’s SOTU
E.J. DIONNE JR., 9:27 p.m.: “A massive tax cut for working families.” Really? “If you look at the richest 1 percent, they’re getting more than the bottom 60 percent of… -
report February 5, 2019 Progressive Revenue-Raising Options
America has long needed a more equitable tax code that raises enough revenue to invest in building shared prosperity. The Tax Cuts and Jobs Act (TCJA), enacted at the end of 2017, moved the federal tax code in the opposite direction, reducing revenue by $1.9 trillion over a decade, opening new loopholes, and providing its most significant benefits to the well-off. The law cut taxes on the wealthy directly by reducing their personal income taxes and estate taxes, and indirectly by reducing corporate taxes.
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report February 1, 2019 Congress Should Reduce, Not Expand, Tax Breaks for Capital Gains
Even though income derived from capital gains receives a special lower tax rate and is therefore undertaxed, some proponents of lower taxes on the wealthy claim that capital gains are overtaxed due to the effects of inflation. But existing tax breaks for capital gains more than compensate for any problem related to inflation. Congress should repeal or restrict special tax provisions for capital gains rather than creating even more breaks.
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media mention January 28, 2019 The Hill: Warren Stakes out Ground with Wealth Tax Proposal
Steve Wamhoff, director of tax policy at the Institute on Taxation and Economic Policy, said middle-income Americans are essentially already taxed on their wealth because most of it is in… -
media mention January 24, 2019 Politico: Let’s Talk Wealth Tax
Steve Wamhoff at the Institute on Taxation and Economic Policy projects that a wealth tax could raise well over $1 trillion in a decade, and notes that wealth inequality far… -
report January 23, 2019 The U.S. Needs a Federal Wealth Tax
A federal wealth tax on the richest 0.1 percent of Americans is a viable approach for Congress to raise revenue and is one of the few approaches that could truly address rising inequality. As this report explains, an annual federal tax of only 1 percent on the portion of any taxpayer’s net worth exceeding the threshold for belonging to the wealthiest 0.1 percent (likely to be about $32.2 million in 2020) could raise $1.3 trillion over a decade.
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blog January 23, 2019 Thoughts about a Federal Wealth Tax and How It Could Raise Revenue, Address Income Inequality
Wealth inequality is much greater than income inequality. The 1 percent of Americans with the highest incomes receive about a fifth of the total income in the United States. In contrast, the top 1 percent of wealth holders in the United States own 42 percent of the nation’s wealth, according to estimates from University of California at Berkley economists Emmanuel Saez and Gabriel Zucman.
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blog January 8, 2019 How to Think About the 70% Top Tax Rate Proposed by Ocasio-Cortez (and Multiple Scholars)
The uproar deliberately steers clear of any real policy discussion about what a significantly higher marginal tax rate would mean. Her critics are mostly the same lawmakers who enacted a massive tax cut for the rich last year that was not debated seriously or supported by serious research. Meanwhile, multiple scholarly studies conclude a 70 percent top tax rate would be an optimal way to tax the very rich. Ocasio-Cortez has brought more attention to the very real need to raise revenue and do it in a progressive way.
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media mention December 11, 2018 Washington Post: In Early Win for Party’s Left, House Democrats Back off Tax Rule
Henry Connelly, a spokesman for Pelosi, said the rule was unnecessary to prevent Democrats from hiking taxes on the middle class. He also noted that House Republicans waived their rule… -
blog November 19, 2018 New ITEP Report on Depreciation Breaks: The Most Important Tax Giveaway that People Don’t Know About
Many Americans sense that the tax code is riddled with unnecessary and costly breaks for big business, but if asked to name one, few would reply “accelerated depreciation.” While they may seem arcane, tax breaks like “full expensing” and other types of accelerated depreciation are among the central problems in our tax code. A new report from ITEP makes the case that any serious tax reform would repeal or sharply curb these provisions.