Recent Work

Details of House Democrats’ Cash Payments and Tax Credit Expansions

February 9, 2021 • By Steve Wamhoff

The House Ways and Means Committee published its proposal for the cash payments, tax provisions and other changes that would make up part of the $1.9 trillion COVID relief legislation that President Joe Biden called for a few weeks ago.

Does New York’s Cannabis Tax Idea Offer a Glimpse of the Future?

February 9, 2021 • By Carl Davis

Taxing cannabis won’t end New York’s budget difficulties, but a potency tax could bring New York a more sustainable stream of cannabis tax revenue than we see in most states. It could also have significant benefits for cannabis consumers.

Faulty Fact Check on Tax Breaks for the Rich and Corporations

February 5, 2021 • By Amy Hanauer

When it comes to tax policy, the details are complicated, but the story is often simple. For example, President Trump’s so-called Tax Cuts and Jobs Act (TCJA) disproportionately benefits the rich. This is not controversial. Yet some opinion makers with large megaphones get lost in the details and come to conclusions that only create more confusion.

State Rundown 2/4: Some Lawmakers, Governors Rising to Occasion with Progressive Tax Proposals

February 4, 2021 • By ITEP Staff

States face shifting landscapes as they attempt to deal with both emergent and longstanding issues in their tax codes and budget structures. This is particularly evident in Oklahoma, where lawmakers must adjust to a U.S. Supreme Court decision that literally redraws state boundaries by recognizing the rights of indigenous communities, but is true in every state, and lawmakers in many of them are rising to the challenge. Read below and see our blog posted today for more on bold proposals that increase tax fairness and solidify bottom lines with needed revenue in states including Connecticut, Minnesota, New York, Pennsylvania, Vermont,…

States Are Finally Going Bold with Progressive Tax Efforts

February 4, 2021 • By Dylan Grundman O'Neill

Advocates, lawmakers, study commissions, and even governors in some states are proposing bold tax policy reforms that look beyond pandemic-induced budget shortfalls and the “K-shaped recovery” to address underlying inequities and underfunding that gave rise to them. These efforts include proposals to: end or reverse regressive tax policies like the preferential treatment of income derived from wealth over income earned through work; restore or strengthen estate and inheritance taxes to slow the concentration of wealth in ever-fewer hands; raise revenue and slow inequality with progressive income taxes; and many other ideas to right upside-down tax codes while raising the revenue…

Corporations Avoid Taxes in a Pandemic

February 4, 2021 • By Amy Hanauer

The public and the Biden administration say corporations should contribute to the public infrastructure that lets them earn so much. We agree. It’s the least we can ask, in a pandemic and at all other times too.

Amazon Has Record-Breaking Profits in 2020, Avoids $2.3 Billion in Federal Income Taxes

February 3, 2021 • By Matthew Gardner

Amazon’s winning streak in its battle against the U.S. tax system remains intact. This week the retail giant announced record-breaking sales and income for 2020, and an effective federal income tax rate of just 9.4 percent, less than half the statutory corporate tax of 21 percent. If Amazon had paid 21 percent of its profits in federal income tax, that would have come to $4.1 billion. The company’s reported current tax of $1.8 billion was less than half that, meaning last year Amazon avoided $2.3 billion in taxes.

President Biden’s Child Tax Credit Proposal Could Right a Historical Wrong

February 2, 2021 • By ITEP Staff, Jenice Robinson, Meg Wiehe

Many 1990s policies were grounded in harmful, erroneous ideas such as financial struggles are due to personal shortcomings and less government is better. Lawmakers didn’t apply these ideas consistently, however. For example, there was no drive to reduce corporate welfare even as policymakers slashed the safety net and disinvested in lower-income communities. So, it’s not surprising that a bipartisan group of lawmakers concluded during that era that the CTC was an appropriate vehicle to give higher-income households a tax break while leaving out poor children.

Immediate Action State Lawmakers Can Take to Support Families and Children

February 2, 2021 • By Aidan Davis

If Congress does act and enact President Biden’s CTC expansion, states could simply couple to that federal change. The changes, while temporary, could become the foundation of a permanent state-level credit over the long-term. But state lawmakers need not wait for legislative action in DC. They can take immediate steps to ensure that their state’s most vulnerable children are positioned to succeed.

Dems, Don’t Repeal the SALT Cap. Do This Instead.

February 1, 2021 • By Steve Wamhoff

Ever since it was enacted as part of the Trump-GOP tax law, some Democrats in Congress have been pushing to repeal the cap on federal tax deductions for state and local taxes (SALT). Recently several Democratic members have suggested that repeal of the cap should be part of COVID relief legislation. While the cap on SALT deductions is problematic, repealing it without making other reforms would result in larger tax breaks for the rich. Instead, lawmakers should consider ITEP’s proposal to replace the SALT cap with a broader limit on tax breaks for the rich that would accomplish Biden’s goal…

Pandemic Profits: Netflix Made Record Profits in 2020, Paid a Tax Rate of Less than 1 Percent

February 1, 2021 • By Matthew Gardner

Netflix’s “current” federal income tax for 2020 was $24 million, which equals just 0.9 percent of the company’s pretax income for the year. This is another way of saying Netflix paid an effective federal income tax rate of just 0.9 percent in 2020. If the company paid the statutory rate, its tax bill would be $572 million.

State Rundown 1/28: EITC Efforts a Welcome Contrast to State Tax Tug-of-War

January 28, 2021 • By ITEP Staff

Efforts to deliver and improve targeted tax credits to support low- and middle-income families proved to be unifying in Washington and Oregon, welcome developments in an otherwise divisive week in state tax debates. For example, Mississippi advocates hoping to end the state’s regressive grocery tax are up against a governor and many lawmakers pulling in the opposite direction by trying to eliminate its income tax. After Arizona residents approved an income tax increase to improve education funding, policymakers there are seeking to reverse course by slashing taxes instead. And North Dakota lawmakers are considering converting their graduated income tax into…

Disaggregating Data Illuminates a Path to Equitable Policy

January 27, 2021 • By Jessica Schieder

The Biden administration’s move last week to establish an interagency working group to examine how well data is broken down, or disaggregated, within public sector data sources is welcome news. The executive order specifically names the limited availability of datasets disaggregated “by race, ethnicity, gender, disability, income, veteran status, [and] other key demographic variables.”

Child Tax Credit Enhancements Under the American Rescue Plan

January 26, 2021 • By Aidan Davis, Jessica Schieder

President Joe Biden’s coronavirus relief package, the American Rescue Plan, includes a significant expansion of the Child Tax Credit (CTC). The president’s proposal provides a $125 billion boost in funding for the program, which would essentially double the size of the existing federal credit for households with children. Combined with existing law, the CTC provisions in Biden's plan would provide a 37.4 percent income boost to the poorest 20 percent of families with children who make $21,300 or less a year.

State Rundown 1/22: Somewhere Between a Flurry and a Blizzard of State Tax Activity So Far

January 22, 2021 • By ITEP Staff

You won’t find any images of Bernie Sanders and his mittens photoshopped into this week’s Rundown, but you will find the latest news on state fiscal debates, including proposals to generate needed funding by raising taxes on high-income households and profiting businesses in California, Delaware, Hawaii, Maryland, and Washington, as well as misguided efforts to slash taxes in Arizona, Iowa, South Carolina, Utah, and West Virginia. Also in the news are thoughtful improvements to targeted tax credits for families in need in Connecticut and Maryland, harmful obstacles to revenue generation proposed in Nebraska and Wyoming, and renewed hope on the…