Recent Work
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Mayor Pete Buttigieg's proposal An Economic Agenda for American Families: Empowering Working and Middle Class Americans to Thrive would expand the Earned Income Tax Credit (EITC) as modeled by the Working Families Tax Relief Act.
Corporate Tax Avoidance Is Mostly Legal—and That’s the Problem
December 19, 2019 • By Steve Wamhoff
As usual, corporate spokespersons and their allies are trying to push back against ITEP’s latest study showing that many corporations pay little or nothing in federal income taxes. One way they respond is by stating that everything they do is perfectly legal. This is an attempt by the corporate world to change the subject. The entire point of ITEP’s study is that Congress has allowed corporations to avoid paying taxes, and that this must change.
State Rundown 12/18: Utah’s Tax Fight Wraps Up As Other States’ Ramp Up
December 18, 2019 • By ITEP Staff
With the new year and many state legislative sessions just around the corner, most state tax and budget debates are just getting started. Arkansas will be among the states working to improve their roads and other infrastructure. Massachusetts will have to deal with revenue losses due to a misguided tax-cut trigger put in place in prior years. Maryland and South Dakota will be two of many states facing teacher pay shortages and other education funding needs. And debates over the legalization and taxation of cannabis will likely continue in California, Kentucky, New Jersey, and beyond. Utah lawmakers, on the other…
For the Holiday Wishlist: Child Tax Credit Improvements That Would Lift Millions Out of Poverty
December 18, 2019 • By Aidan Davis
A recent New York Times article serves as a stark reminder that child poverty remains a persistent problem in this country and that the policies we have in place to help this vulnerable population need immediate attention and improvement.
Corporate tax avoidance boosts companies’ bottom lines, and this benefits the owners of corporate stocks, which are mostly concentrated in the hands of the well-off. The cost of corporate tax dodging is borne by everyone, in several different ways.
More of the Same: Corporate Tax Avoidance Hasn’t Changed Much Under Trump-GOP Tax Law
December 16, 2019 • By Matthew Gardner
A new report from ITEP released today shows that, based on the first year of financial reports released by companies operating under the new tax law, tax avoidance appears to be every bit as much of a problem under the new tax system as it was before the Trump tax law took effect.
Corporate Tax Avoidance in the First Year of the Trump Tax Law
December 16, 2019 • By ITEP Staff, Lorena Roque, Matthew Gardner, Steve Wamhoff
Profitable Fortune 500 companies avoided $73.9 billion in taxes under the first year of the Trump-GOP tax law. The study includes financial filings by 379 Fortune 500 companies that were profitable in 2018; it excludes companies that reported a loss.
New ITEP Reports Call for the Repeal of Opportunity Zones and Urge States to Decouple
December 12, 2019 • By Lorena Roque
Two new ITEP reports lay bare the irreparable flaws of the federal Opportunity Zones program, created by the Tax Cuts and Jobs Act signed into law by President Trump in 2017.
Opportunity Zones Bolster Investors’ Bottom Lines Rather than Economic or Racial Equity
December 12, 2019 • By Lorena Roque
This policy brief provides an overview of how opportunity zones are designed and highlights some of the flaws of the policy, including the detrimental impact opportunity zones have on communities of color.
States Should Decouple from Costly Federal Opportunity Zones and Reject Look-Alike Programs
December 12, 2019 • By ITEP Staff
Post enactment of TCJA, lawmakers in most states needed to decide how to respond to the creation of this new program. Given the shortcomings of the federal Opportunity Zones program and its added potential costs to states, the most prudent course of action is three-pronged: States should move quickly to decouple; states should reject look-alike programs; and lawmakers should make investments directly into economically distressed areas.
House Democrats’ Latest Bill on SALT Deductions Would Mean Bigger Tax Cuts for the Rich
December 11, 2019 • By Steve Wamhoff
ITEP estimates show that if the House Democrats' proposal was in effect in 2022, it would have a net cost of $81 billion in that year alone. The estimates also show that 51 percent of the benefits would go to the richest 1 percent of taxpayers in the U.S. Clearly, lawmakers concerned about the SALT cap need to go back to the drawing board.
Earlier this year, Amazon and Netflix made headlines when ITEP reported findings that these and at least 58 other companies paid no federal income taxes in 2018. One of the tax breaks they use to manage this feat is related to stock options. Some companies saved hundreds of millions, and in some cases more than a billion dollars, in taxes in 2018 alone with this break. It’s time for Congress to eliminate the stock options tax dodge.
How Congress Can Stop Corporations from Using Stock Options to Dodge Taxes
December 10, 2019 • By ITEP Staff
The stock option rules in effect today create a problem because they allow corporations to report a much larger expense for this compensation to the IRS than they report to investors. The result is that corporations can report larger profits to investors but smaller profits to the IRS, undermining the fundamental fairness of the tax system.
A new ITEP report explains that an income tax cut for cannabis businesses embedded in the MORE Act is probably larger than the new 5 percent sales tax. This means that the average cannabis retailer—and its customers—could expect to pay LESS tax if the MORE Act is signed into law. Congress might have good reasons for structuring legalization this way, but it is an underappreciated aspect of the bill that should be made clearer as this debate progresses.
Understanding the full tax consequences of cannabis legalization requires evaluating not only the excise taxes proposed in most legalization bills, but also the effects on the federal income tax liability of cannabis businesses.
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