Recent Work
2096 items
Most of Indiana Tax Rate Cut Would Flow to Upper-Income Taxpayers
August 27, 2012 • By Carl Davis
Alternative Could Provide Larger Tax Cuts for Most Hoosiers Indiana gubernatorial candidate, and current U.S. Representative, Mike Pence recently unveiled his plan to cut the state’s flat personal income tax rate from 3.4 percent to 3.06 percent, should he be elected governor. Pence described the plan as an “across the board” tax cut for “every […]
Corporate Income Tax Apportionment and the “Single Sales Factor”
August 1, 2012 • By Meg Wiehe
One of the thorniest problems in administering state corporate income taxes is how to distribute the profits of multi-state corporations among the states in which they operate. Ultimately, each corporation's profits should be taxed in their entirety, but some corporations pay no tax at all on a portion of their profits. This problem has emerged, in part, due to recent state efforts to manipulate the "apportionment rules" that distribute such profits. This policy brief explains how apportionment rules work and assesses the effectiveness of special apportionment rules such as "single sales factor" as economic development tools.
For much of the last century, estate and inheritance taxes have played an important role in helping states to adequately fund public services in a way that exempts middle- and low income taxpayers.
As the nation's governors gather in Williamsburg, Virginia this week, their focus is on their Chairman's initiative, Growing State Economies. Too often, however, a governor's knee-jerk response to a lagging economy is to start cutting taxes, even though state tax cuts offer a demonstrably low economic bang-for-the-buck, for a number of reasons.
The Progressive Income Tax: An Essential Element of Fair and Sustainable State Tax Systems
July 1, 2012 • By Meg Wiehe
A few vocal critics have pointed to state personal income taxes as the source of a variety of fiscal and economic problems- arguing that it has enabled wasteful spending, fueled the volatility of revenue collections, or even stifled job-creation. Accordingly, some of these critics have called for the outright repeal of the income tax, while others have suggested making it significantly less progressive. Such proposals, if acted upon, would make it all but impossible for state tax systems to produce revenue in a fair and sustainable fashion.
Sales taxes are among the most important--and most unfair--taxes levied by state governments. Sales taxes accounted for a third of state taxes in 2011, but sales taxes are regressive, falling far more heavily on low- and middle- income taxpayers than on the wealthy. In recent years, lawmakers thinking they might lessen the impact of these taxes have enacted "sales tax holidays" that provide temporary sales tax breaks for purchases of clothing, computers, and other items. This policy brief looks at sales tax holidays as a tax reduction device.
Kansas Governor Sam Brownback recently signed into law Senate Substitute for HB 2117, a tax bill that dramatically changes the Kansas income tax structure. The legislation will cut taxes by over $760 million a year but will actually increase taxes on some lowand middle-income families. This report describes the legislation and its impact on working […]
Latest Kansas Tax Bill Carries $680 Million Price Tag and Raises Taxes on Those Least Able to Pay
May 17, 2012 • By Meg Wiehe
A joint House-Senate conference committ ee is poised to approve a revised version of the tax bill recently sent to the Governor by the House of Representatives. An Institute on Taxation and Economic Policy (ITEP) analysis of the agreed-upon tax bill shows that it would reduce state tax collections by about $680 million a year, […]
Three Strategies for Making Enacted Kansas Tax Plan Less Unfair and Less Costly
May 10, 2012 • By Meg Wiehe
Yesterday, the Kansas House of Representatives passed, and sent to Governor Sam Brownback, a tax plan, Senate Substitute for House Bill 2117, that had been previously ratified by the state Senate. A number of lawmakers in both houses have expressed dismay at the projected long-term cost of the bill, and the governor has indicated that […]
Kansas Tax Bill Would Cost $600 Million a Year While Hiking Taxes on Low-Income Families
May 8, 2012 • By Meg Wiehe
Kansas legislators are set to vote on a tax bill recently approved by a joint House-Senate conference committee. An ITEP analysis of the agreed-upon tax bill shows that it would reduce state tax collections by close to $600 million a year, while actually increasing taxes on many low- and middle-income Kansans. The conference committee plan […]
How Federal Tax Reform Can Help or Hurt State and Local Governments
April 25, 2012 • By Matthew Gardner
Federal tax reform can affect state and local taxes in several ways. The federal government can create, repeal or change tax expenditures in a way that is passed on to the states because virtually every state has tax rules linked to the federal rules. The federal government can subsidize state and local governments’ ability to […]
Regarding Proposals to Increase Taxes on Upper-Income Rhode Islanders
April 24, 2012 • By Meg Wiehe
My testimony focuses in general on the slate of bills in front of the committee today that would raise taxes on wealthy Rhode Islanders. These bills present Rhode Island policymakers sensible revenue-raising options that could be used to either prevent deeper spending cuts or restore spending to vital public investments such as education, health care, […]
Since Tennessee Governor Bill Haslam proposed reducing the state’s estate tax in February, Tennessee lawmakers have shown increasing interest in this idea. Recently, a House subcommittee one-upped the governor by approving a bill that would gradually repeal the tax outright. House Speaker Beth Harwell explained this move by noting that “[w]e know this tax drives […]
Tax Plans Put Kansas on Road Away from Fair & Adequate Tax Reform
March 30, 2012 • By Meg Wiehe
Both the House and Senate have recently passed bills, loosely modeled on the Governor’s plan, that would reduce income tax rates, but their plans are different in very important ways. This ITEP report assesses the impact of the House and Senate plans on state revenues and tax fairness, and finds that each of these plans […]
Most Tax Cuts Flow to the Top 1%, Vast Majority of Idahoans Receive No Benefit An income tax cut recently passed by the Idaho House of Representatives, and backed by Governor Butch Otter, would reduce state revenues by over $35 million a year while benefitting only a small fraction of the wealthiest Idahoans. Four out […]
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