Recent Work
2118 items
Fact Sheet: The Consequences of Adopting a Territorial Tax System
September 18, 2017 • By Steve Wamhoff
President Trump and Republican leaders in Congress have proposed a “territorial” tax system, which would allow American corporations to pay no U.S. taxes on most profits they book offshore. This would worsen the already substantial problem of corporate tax avoidance and result in more jobs and investment leaving the U.S. Lawmakers should know some key facts about the territorial approach.
Poverty is Down, But State Tax Codes Could Bring It Even Lower
September 15, 2017 • By Misha Hill
The U.S. Census Bureau released its annual data on income, poverty and health insurance coverage this week. For the second consecutive year, the national poverty rate declined and the well-being of America’s most economically vulnerable has generally improved. In 2016, the year of the latest available data, 40.6 million (or nearly 1 in 8) Americans were living in poverty.
Astonishingly, tax policies in virtually every state make it harder for those living in poverty to make ends meet. When all the taxes imposed by state and local governments are taken into account, every state imposes higher effective tax rates on poor families than on the richest taxpayers.
Census Data Reveal Modest Gains for Working People; GOP Tax Overhaul Could Reverse These Gains
September 14, 2017 • By Jenice Robinson
On the surface, census poverty and income data released Tuesday reveal the nation’s economic conditions are improving for working families. The federal poverty rate declined for the second consecutive year and is now on par with the pre-recession rate. For the first time, median household income surpassed the peak it reached in 1999 and is […]
State Rundown 9/13: The Year of Unprecedented State Budget Impasses Continues
September 13, 2017 • By ITEP Staff
This week, Pennsylvania lawmakers risk defaulting on payments due to their extremely overdue budget and Illinois legislators will borrow billions to start paying their backlog of unpaid bills. Governing delves into why there were more such budget impasses this year than in any year in recent memory. And Oklahoma got closure from its Supreme Court on whether closing special tax exemptions counts as "raising taxes" (it doesn't).
Trump Proposals Would Reduce the Share of Taxes Paid by the Richest 1%, Raise It for Everyone Else
September 13, 2017 • By Steve Wamhoff
The tax proposals released by the Trump Administration in April would reduce the share of total federal, state and local taxes paid by America’s richest 1 percent while increasing the share paid by all other income groups. This clearly indicates that the tax system would be less progressive under the president’s approach.
Census Data Shows Importance of Refundable Tax Credits in Reducing Poverty, But Lawmakers Move to Restrict Them
September 12, 2017 • By Steve Wamhoff
The annual poverty data released by the Census Bureau today continues to show that federal refundable tax credits are the second most important anti-poverty program after Social Security. But this could change if the House Republicans have their way. The budget resolution approved by Republicans on the House Budget Committee in July would place new […]
Reducing the Cost of Child Care Through State Tax Codes in 2017
September 11, 2017 • By ITEP Staff
Low- and middle-income working parents spend a significant portion of their income on child care. As the number of parents working outside of the home continues to rise, child care expenses have become an unavoidable and increasingly unaffordable expense. This policy brief examines state tax policy tools that can be used to make child care more affordable: a dependent care tax credit modeled after the federal program and a deduction for child care expenses.
State lawmakers seeking to make residential property taxes more affordable have two broad options: across-the-board tax cuts for taxpayers at all income levels, such as a homestead exemption or a tax cap, and targeted tax breaks that are given only to particular groups of low- and middle-income taxpayers. One such targeted program to reduce property taxes is called a “circuit breaker” because it protects taxpayers from a property tax “overload” just like an electric circuit breaker: when a property tax bill exceeds a certain percentage of a taxpayer’s income, the circuit breaker reduces property taxes in excess of this “overload”…
Sales taxes are one of the most important revenue sources for state and local governments; however, they are also among the most unfair taxes, falling more heavily on low- and middle-income households. Therefore, it is important that policymakers nationwide find ways to make sales taxes more equitable while preserving this important source of funding for public services. This policy brief discusses two approaches to a less regressive sales tax: broad-based exemptions and targeted sales tax credits.
State Rundown 9/6: Most Statehouses Quiet, Many Pondering Harvey’s Impacts
September 7, 2017 • By ITEP Staff
It's been a quiet week for tax policy in most states, though lawmakers are still making noise in Pennsylvania, where a budget agreement is still needed, and in Wisconsin, where legislators are searching for the will to raise revenue for the state's ailing transportation infrastructure. In our "What We're Reading" section you'll find interesting reading on the fiscal fallout of Hurricane Harvey, as well as an in-depth series on how states' disaster response needs are likely to continue to increase.
New ITEP Report: Trump’s Proposed Territorial Tax System Would Increase Corporate Tax Dodging
September 6, 2017 • By Steve Wamhoff
While promoting his ideas for overhauling our tax code today in North Dakota, President Trump said that Congress should adopt a territorial tax system which, he argued, would result in more investment in the United States. You’re not alone if you’re not sure what “territorial” means in this context. It’s a euphemism used by some politicians to describe a proposal that will be wildly unpopular once voters understand what it really means.
Turning Loopholes into Black Holes: Trump’s Territorial Tax Proposal Would Increase Corporate Tax Avoidance
September 6, 2017 • By Matthew Gardner, Steve Wamhoff
The problem of offshore tax avoidance by American corporations could grow much worse under President Donald Trump’s proposal to adopt a “territorial” tax system, which would exempt the offshore profits of American corporations from U.S. taxes. This change would increase the already substantial benefits American corporations obtain when they use accounting gimmicks to make their profits appear to be earned in a foreign country that has no corporate income tax or has one that is extremely low or easy to avoid.
Tax Reform Principles Released by GOP in August Raise More Questions Than They Answer
August 31, 2017 • By Steve Wamhoff
Before Wednesday, you may have forgotten about tax reform given that President Trump’s remarks on the Charlottesville white supremacist rally, as well as the first U.S. solar eclipse since 1979, and Hurricane Harvey, overshadowed most other news. But Republicans on the House Ways and Means Committee, which in theory is the starting place for any tax legislation, certainly tried to get the public to focus on their vision for tax reform. They released a “reason for tax reform” each day in August. Unfortunately, these “reasons” are a combination of ideas that their proposals fail to address and misleading assertions.
Trump (Sort of) Used Our Data on Corporate Tax Avoidance, But He Missed the Point
August 31, 2017 • By Matthew Gardner
On Wednesday, reporters waiting to write about President Trump’s much-ballyhooed tax reform speech in Missouri received a fact sheet from the White House informing them that, “Fortune 500 corporations are holding more than $2.6 trillion in profits offshore to avoid $767 billion in Federal taxes, according to the Institute on Taxation and Economic Policy.”
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