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State Rundown 4/29: State Responses and Federal Aid Could Be Among “May Flowers” to Come
April 29, 2020 • By ITEP Staff
April has brought relentless showers of troublesome tax and budget news as the COVID-19 pandemic wreaked havoc on communities and the public services and institutions that both support and depend on them. There is hope, however, that these troubles have opened the eyes of policymakers and that May will bring more clarity and strong action in the form of federal fiscal relief as well as home-grown state and local responses.
A bipartisan group of governors and senators from Louisiana to Maryland to Ohio have called for at least $500 billion in state and local fiscal relief. They also need specific help with testing, protective equipment, unemployment costs, Medicaid costs, social services, education and infrastructure. States can’t be on their own as they address the double whammy of plunging revenue and skyrocketing needs.
Pandemic Profits: Netflix’s Record Profit Haul, Past Tax Avoidance Raise Questions about Tax Law’s Weaknesses
April 29, 2020 • By Matthew Gardner
At a time when many companies are facing existential threats due to the COVID-19 pandemic and associated economic shutdown, it is vital to ensure that our corporate tax laws apply fairly to companies that are still turning a profit in these turbulent times.
Sales Tax Policy in a Pandemic: Exemptions for Digital Goods and Services Are More Outdated Than Ever
April 29, 2020 • By Estefan Hernandez Escoto
Many states are making the decline in sales tax collection worse by failing to apply their sales taxes to digital goods (such as downloads of music, movies, or software) and services (such as digital streaming). A state that taxes movie theater tickets but not digital streaming, for instance, is needlessly hastening the decline of its own sales tax.
The CARES Act Provision for High-Income Business Owners Looks Worse and Worse
April 24, 2020 • By Steve Wamhoff
A select group of millionaires will receive an average tax break of $1.6 million thanks to a CARES Act provision that is receiving delayed but well-deserved scrutiny. Wealthy business owners are receiving this windfall because the CARES Act provides tax breaks to people with losses from a business they own. This approach may seem sensible because businesses small and large are taking a hit from the economic recession, but on close inspection, these provisions benefit those least in need and can be easily abused.
Partying Like It’s 2017: How Congress Went Overboard on Helping Businesses with Losses
April 24, 2020 • By Steve Wamhoff
The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides some needed relief for individuals and families, but two arcane tax provisions related to business losses will further enrich the wealthy and fail to boost our economy more broadly.
To Avoid the CARES Act’s Flaws, Invest in Automatic Relief
April 23, 2020 • By Jessica Schieder
With adequate automatic stabilizers, the United States might not end up with economic relief bills that have provisions tucked in them mostly helping millionaires, as we learned was the case with a CARES Act provision suspending limits on business losses. And regular people could get help more quickly, blunting the economic downturn.
In different ways, Earth Day and the COVID-19 pandemic convey a similar lesson: people around the world face shared struggles and disparate impacts, which they must work together to overcome through both emergency action and systemic change. In keeping with that lesson, state fiscal policy news this week was strikingly similar around the country, as states take account of the major threat posed by the pandemic to their budgets and attempt to grapple with its disproportionate impacts on communities of color and low-income families.
The full effect of the coronavirus pandemic on state revenue streams remains largely unknown. One key policy option is to reevaluate recent misguided tax cuts—particularly those that have not yet taken full effect and will add to growing revenue shortfalls in the coming years.
Morally and Economically, Including Undocumented Immigrants Is the Right Thing to Do
April 17, 2020 • By ITEP Staff
Undocumented immigrants pay taxes and play an integral part in the social and economic welfare of our country, yet Congress left them almost entirely out of the CARES Act package. Fortunately, immigrants, workers and their allies are helping policymakers advance better policy approaches.
State Rundown 4/15: Tax Day Delayed but Other Important Work Accelerated
April 15, 2020 • By ITEP Staff
April 15 is traditionally the day federal and state income taxes are due, but like so much else, Tax Day is on hold for the time being. Meanwhile the pandemic’s disastrous and uneven effects on communities and shared institutions are decidedly not suspended. But nor are the efforts of individuals, advocates, and policymakers to develop solutions to respond to the immediate crisis while also building better systems going forward. ITEP’s recommendations for state tax policy responses are now available here, and this week’s Rundown includes experiences and perspectives on paths forward from around the country.
State Options to Shore up Revenues and Improve Tax Codes amid Pandemic
April 15, 2020 • By Dylan Grundman O'Neill, Meg Wiehe
The COVID-19 pandemic is an extraordinarily challenging time, as we see harm and struggle affecting the vast majority of our families, businesses, public services, and economic sectors. No one will be unaffected by the crisis, and everyone has a stake in the recovery and faces tough decisions. In the world of state fiscal policy, where revenue shortfalls are likely to be far bigger than can be filled by the initial $150 billion in federal aid or absorbed through funding cuts without causing major harm, tax increases must be among those decisions. Even with more federal support, states will need home-grown…
Our elected officials have to listen to we the people and change their approach. Going forward, corporate voices cannot continue to steer. Instead, families, communities and working individuals have to lead our policymaking so it better helps people struggling now.
State Rundown 4/9: Pandemic’s Fiscal Effects Slowly Coming into Focus
April 9, 2020 • By ITEP Staff
The COVID-19 pandemic continued this week to wreak havoc on lives and communities around the world. The fiscal fallout of the virus in the states is growing as well, and beginning this week to come into sharper focus. This week’s Rundown brings together what we know of that slowly clarifying picture and how states are responding so far.
Addressing the COVID-19 Economic Crisis: Advice for the Next Round
April 7, 2020 • By Steve Wamhoff
Americans need many things right now beyond tax cuts or cash payments. But for people whose incomes have declined or evaporated, money is the obvious, immediate need to prevent missed rent or mortgage payments, skipped hospital visits and other cascading catastrophes. So, what should Congress do next to get money to those who need it?
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