Recent Work
2049 items
Rewarding Work Through State Earned Income Tax Credits
September 14, 2016 • By Aidan Davis, Lisa Christensen Gee, Meg Wiehe
The Earned Income Tax Credit (EITC) is a policy designed to bolster the earnings of low-wage workers and offset some of the taxes they pay, providing the opportunity for struggling families to step up and out of poverty toward meaningful economic security. The federal EITC has kept millions of Americans out of poverty since its enactment in the mid-1970s. Over the past several decades, the effectiveness of the EITC has been magnified as many states have enacted and later expanded their own credits.
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.
News Release: U.S. Should Take a Page from European Commission’s Book And Crack Down on Corporate Tax Avoidance
August 30, 2016 • By ITEP Staff
Following is a statement by Matt Gardner of the Institute on Taxation and Economic Policy regarding the European Commission’s ruling today that the Apple Corporation must pay as much as €13 billion ($14.5 billion) in back taxes due to an illegal tax break granted by the Irish government. “The European Commission action is a chastening […]
The Little-Known Effect of State Tax Changes: More or Less Money to the Federal Government
August 24, 2016 • By Jenice Robinson
The Institute on Taxation and Economic Policy (ITEP) this week published a new policy brief whose conclusions may be surprising to those who don’t spend their days analyzing the intersection of state and federal tax policy. The brief, How State Tax Changes Affect Your Federal Taxes, outlines how the “federal offset,” or the deductibility of […]
How State Tax Changes Affect Your Federal Taxes: A Primer on the “Federal Offset”
August 22, 2016 • By Dylan Grundman O'Neill
Read this brief in PDF here. State lawmakers frequently make claims about how proposed tax changes would affect taxpayers at different income levels. Yet too many lawmakers routinely ignore one important consequence of their tax reform proposals: the effect of state tax changes on their constituents’ federal income tax bills. Wealthier taxpayers in particular can […]
Indexing Income Taxes for Inflation: Why It Matters
August 22, 2016 • By Dylan Grundman O'Neill
Read brief in PDF here. All of us experience the effects of inflation as the price of the goods and services we buy gradually goes up over time. Fortunately, as the cost of living goes up, our incomes often tend to rise as well in order to keep pace. But many state tax systems are […]
The Folly of State Capital Gains Tax Cuts
August 17, 2016 • By Dylan Grundman O'Neill, Meg Wiehe
Read the brief in a PDF here. The federal tax system treats income from capital gains more favorably than income from work. A number of state tax systems do as well, offering tax breaks for profits realized from local investments and, in some instances, from investments around the world. As states struggle to cope with […]
Tim Cook’s Disingenuous Argument to Justify Apple’s $215 Billion Offshore Cash Hoard
August 9, 2016 • By Jenice Robinson
Tim Cook is a persuasive CEO. In a wide-ranging interview published earlier this week in the Washington Post, he discussed his vision for the company, thoughts about leadership succession, and humbly admitted he has made mistakes. So it would be very easy to view as reasonable his declaration that Apple will not repatriate its offshore […]
Achieving Sustainable Infrastructure Revenue with Gas Tax Reform
August 8, 2016 • By Carl Davis
This brief outlines the causes of Louisiana's infrastructure revenue shortfall and offers recommendations for how the state can achieve "sufficient increased levels of recurring funding to address the transportation backlog in highway and bridge maintenance needs in Louisiana," as per the Task Force's mandate.
The sharp decline in oil prices since summer 2014 has allowed consumers to save hundreds of dollars annually at the pump, but it also has left some energy producing states clamoring to come up with policy ideas to make up for lost revenue.
Read this Policy Brief in PDF here. General sales taxes are an important revenue source for state governments, accounting for close to one-third of state tax collections nationwide. But most state sales taxes have a damaging structural flaw: they typically apply to most sales of goods, such as books and computers, but exempt most services […]
Read this report in PDF. This month, Alaska legislators regroup in yet another special session where they will consider legislation to address a yawning budget gap created by declining oil tax and royalty revenues. Through the use of his veto pen, Gov. Bill Walker has partially addressed the gap with cuts to state spending and […]
Sales Tax Holidays: An Ineffective Alternative to Real Sales Tax Reform
July 11, 2016 • By Meg Wiehe
This brief was updated July 2018 Read this Policy Brief in PDF here. Sales taxes are an important revenue source, composing close to half of all state tax revenues.[1] But sales taxes are also inherently regressive because the lower a family’s income, the more the family must spend on goods and services subject to the […]
Ryan Tax Plan Reserves Most Tax Cuts for Top 1 percent, Costs $4 Trillion Over 10 Years
June 29, 2016 • By ITEP Staff
A new distributional analysis of Republican Speaker of the House Paul Ryan’s “A Better Way” policies finds that the plan would: • Add $4 trillion to the national debt over a decade. • Overwhelmingly benefit the top 1 percent of tax payers while resulting in a net loss for the bottom 95 percent of taxpayers. • Slash corporate […]
Few state tax trends are as striking as the rapid decline of state corporate income tax revenues. As recently as 1986, state corporate income taxes equaled 0.5 percent of nationwide Gross State Product (GSP) (a measure of statewide economic activity). But in fiscal year 2013 (the last year for which data are available), state and local corporate income taxes were just 0.33 percent of nationwide GSP--representing a decline of over 30 percent.
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