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Trade Deals Aren’t Enough: Fixing the Tax Code to Bring American Jobs Back
July 16, 2020 • By Amy Hanauer
We all need the public sector to protect public health, keep us safe, educate our children, and much more. Companies, particularly multinational corporations, could not function without the legal, infrastructure, financial, regulatory, health, and transportation resources that the government provides.
With tax day finally coming at the federal level and in many states this week, policymakers in Nevada and New Jersey began to talk about revenue solutions to their revenue shortfalls, even if they fell well short of wholeheartedly backing needed reforms. Like their counterparts in most states, they remain primarily focused on temporary solutions to their short-term emergencies. Still, advocates in these and other states continue to push for more fundamental fixes to their inadequate and upside-down tax codes, including a new campaign for better tax policy in Massachusetts and efforts to rein in tax subsidies and loopholes in…
New Prosperity Now Report Identifies Upside-Down Tax Incentives
July 15, 2020 • By Jessica Schieder
Ahead of this year’s delayed Tax Day, our partners at Prosperity Now released a powerful report providing a comprehensive overview of many of the ways our federal tax system privileges wealth over work, while also lifting up several provisions which could serve as a template for improving progressivity within the tax code. The report makes […]
Who Pays Taxes in America in 2020?
July 14, 2020 • By ITEP Staff, Matthew Gardner, Steve Wamhoff
Having a sound understanding of who pays taxes and how much is a particularly relevant question now as the nation grapples with a health and economic crisis that is devastating lower-income families and requiring all levels of government to invest more in keeping individuals, families and communities afloat. This year, the share of all taxes paid by the richest 1 percent of Americans (24.3 percent) will be just a bit higher than the share of all income going to this group (20.9 percent). The share of all taxes paid by the poorest fifth of Americans (2 percent) will be just…
Adequately Funding the IRS Would Be One Small Step Toward Racial Equity in the Tax Code
July 10, 2020 • By Jenice Robinson
IRS Commissioner Charles Rettig vowed to work with Congress to explore how the federal tax system contributes to the racial wealth gap. There are at least two ways this can happen: tax policies enacted by Congress and IRS enforcement of these policies.
Congressional Budget Office Confirms That IRS Budget Cuts Lose Money and Benefit the Rich
July 9, 2020 • By Steve Wamhoff
Lawmakers often claim that they are “saving” taxpayers money by slashing federal spending, but the truth is that these cuts often are counterproductive and costly in the long-term. One type of budget-cutting has costs that are immediate and obvious—cuts to the IRS, the agency that collects the revenue that pays for federal spending. A new report from the Congressional Budget Office (CBO) confirms that lawmakers’ anti-government, IRS funding-cuts zeal has increased the deficit.
State Rundown 7/8: Many State Legislatures Reconvene for Special or Resumed Sessions
July 8, 2020 • By ITEP Staff
Local leaders in the District of Columbia and Seattle, Washington, approved progressive tax changes to raise needed funding this week for priorities such as coronavirus relief, affordable housing, and mental health. Arizona advocates submitted signatures to place a high-income surcharge on the ballot for November. And as a number of states made decisions on how to use federal Coronavirus Aid, Relief, and Economic Security (CARES) Act funds, North Carolina decoupled from costly business tax cuts contained in the act and Nebraska started discussing doing the same.
As ITEP analyst Kamolika Das wrote today, July 1 is typically the beginning of state fiscal years and “a point when one can take a step back and reflect on the wins and disappointments of the past state legislative sessions.” Not so in 2020, she writes, as uncertainty surrounding the virus, state revenues, and potential federal action give state lawmakers no such time to relax and reflect. Although most recent state actions, such as those covered below in California, Mississippi, and West Virginia, have focused on funding cuts and temporary measures to bring budgets into short-term balance, the need for…
New Fiscal Year Brings New Challenges and Opportunities in the States
July 1, 2020 • By Kamolika Das
July 1—the start of the new fiscal year in most states—typically marks a point when one can take a step back and reflect on the wins and disappointments of the past state legislative sessions. 2020 is markedly different. Nationwide business closures and stay-at-home orders in response to COVID-19 have led to unprecedented spikes in unemployment, decreased demand for consumer spending, and increased demand for vital public services. As a result, states face incredibly uncertain financial futures with little clarity regarding how their tax collections will fare over the next year.
Republican Tax Credit Proposal Would Provide New Breaks to Tax Avoiders Like Amazon and Netflix
June 30, 2020 • By Matthew Gardner, Steve Wamhoff
While lawmakers of both parties and policy experts discuss various ways to respond to the continuing COVID-19 crisis and resulting economic downturn, Republicans in Congress are offering a new solution. Their idea, which is still being discussed, is to waive existing limits on business tax credits. This could benefit corporations that are profitable but that nonetheless pay no taxes or very little in taxes because of the many tax breaks and legal loopholes they already enjoy.
State Rundown 6/26: States Take Varying Fiscal Approaches While Awaiting Federal Action
June 26, 2020 • By ITEP Staff
State policymakers this week took a variety of approaches to their fiscal situations amid the COVID-19 pandemic. Tennessee lawmakers chose to balance their budget through $1.5 billion in cuts to public services, but not before adding to those cuts by going forward with planned tax cuts. California legislators also passed a budget but relied on a number of temporary measures and delays to do so. Their counterparts in Massachusetts, New Jersey, and Rhode Island opted for interim budgets to tide them over for a few months while they continue to look for lasting solutions. Meanwhile, many states are debating whether…
Beyond SCOTUS: States Recognize Need for More Inclusive Immigrant Policy
June 26, 2020 • By Marco Guzman
The U.S. Supreme Court last week halted an effort by the Trump administration that would have stripped DACA (Deferred Action for Childhood Arrivals) recipients of their lawful status in the country. The 5-4 ruling is a significant victory for immigrant rights advocates and over 643,000 Dreamers—as they’re known—who were brought here as children and have […]
McSally “Travel Tax Credit” Is an Invitation for Tax Avoidance
June 23, 2020 • By Matthew Gardner
Earlier this week, U.S. Sen. Martha McSally (R-AZ) introduced the “American TRIP Act,” a bill ostensibly designed to encourage Americans to boost the economy by traveling within the United States. The bill is certainly a trip in the colloquial sense of the word.
The Institute on Taxation and Economic Policy stands with activists who are guiding the movement to transform America, dismantle systemic racism in policing, and envision a better justice system. Committed protestors in big cities, small towns, and suburban enclaves have spurred a sea change in public opinion and policy possibility on policing and incarceration. Their work and activism builds on years of action by Black Lives Matter and other leaders.
State Rundown 6/18: States Work to “Finalize” Budgets in Uncertain Times
June 18, 2020 • By ITEP Staff
Despite uncertainty all around the nation, a few states passed budgets this week and many more are negotiating to enact theirs before fiscal years close at the end of June. Colorado notably pared back some of its own tax breaks and limited the potential damage on its budget from new federal breaks. California also passed a budget but few in the state actually think the dealing is done. Iowa quietly enacted its budget too, though advocates in the state are making noise about non-fiscal bills that were added late in the game.
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