Institute on Taxation and Economic Policy

Recent Work

2067 items
Two Ways a 2025 Federal Tax Bill Could Worsen Income and Racial Inequality

Two parts of Trump’s 2017 tax law that are particularly expensive and beneficial to the richest individuals are the changes in income tax rates and brackets and the special deduction for “pass-through” business owners. Lawmakers should not extend these provisions for high-income households past the end of this year, when they are scheduled to expire.  

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Federal Tax Policy: What Should It Accomplish?

March 26, 2025 • By Steve Wamhoff

Federal Tax Policy: What Should It Accomplish?

The U.S. needs a tax code that is more adequate, meaning any major tax legislation should increase revenue, not reduce it. The U.S. also needs a tax code that is more progressive, meaning any significant tax legislation should require more, not less, from those most able to pay.

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Tip Exemptions Have No Place in State Income Tax

March 25, 2025 • By Eli Byerly-Duke, Nick Johnson

Tip Exemptions Have No Place in State Income Tax

Creating a special tax break for tipped income – as at least 20 states are considering this spring – would harm state budgets, encourage tax avoidance, and fail to reach the vast majority of low- and middle-income workers.

State Rundown 3/20: It’s March, Welcome to Tax Policy Madness

March Madness kicks off today and the pressure is on as many states’ legislative sessions are nearing the final buzzer. Some state lawmakers are seemingly competing for the title of most regressive state tax policies while others are looking to lift up best practices for more equitable outcomes.   The Mississippi legislature landed on a […]

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Housing Affordability and Property Taxes: How to Actually Move the Needle

March 19, 2025 • By Kamolika Das, Rita Jefferson

Housing Affordability and Property Taxes: How to Actually Move the Needle

Tax policy alone cannot solve the housing crisis but lawmakers who are focused on tax policy solutions have better options available than sweeping property tax cuts and caps: property tax circuit breakers, renter credits, vacancy taxes, land value taxes, and changes to existing property tax assessments can move the needle on the affordable housing crisis.

Shelter Skelter: How the Educational Choice for Children Act Would Use Tax Avoidance to Fuel School Privatization

The Educational Choice for Children Act of 2025 would ostensibly provide a tax break on charitable donations to organizations that give out private K-12 school vouchers. Most of the so-called “contributions,” however, would be made by wealthy people solely for the tax savings, as those savings would typically be larger than their contributions.

A Revenue Impact Analysis of the Educational Choice for Children Act of 2025

The Educational Choice for Children Act of 2025 would provide donors to nonprofit groups that distribute private K-12 school vouchers with a dollar-for-dollar federal tax credit in exchange for their contributions. In total, the ECCA would reduce federal and state tax revenues by $10.6 billion in 2026 and by $136.3 billion over the next 10 years. Federal tax revenues would decline by $134 billion over 10 years while state revenues would decline by $2.3 billion.

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Circuit Breakers Are a Better Option for Property Tax Relief

March 13, 2025 • By Brakeyshia Samms

Circuit Breakers Are a Better Option for Property Tax Relief

To curb the impact of property taxes on working families, lawmakers should improve or implement a property tax circuit breaker program. The program works like this: when families are overloaded with their property taxes, the circuit breaker kicks in and helps alleviate the pressure these taxes put on family budgets.

State Rundown 3/12: Last-Minute Tax Cut Mayhem and New Progressive Revenue Raisers

A bevy of tax cut proposals sprung to life this week while others were signed into law. In Kentucky, lawmakers are working to make it easier for the legislature to enact income and business tax cuts. The governor in Idaho signed into law a personal and corporate income tax cut.

State Approaches to Global Intangible Low-Taxed Income (GILTI)

Many states with corporate income taxes include some amount of federally defined Global Intangible Low-Taxed Income (GILTI) in their tax bases. Twenty-one states plus D.C. include some amount of GILTI in their tax calculations in 2025.

State Rundown 3/6: In the Shadow of Chaotic Federal Policymaking States Seek to Tax the Top, Cut Taxes

Proposals from governors in both New Jersey and Wisconsin include provisions to tax high-income earners. Meanwhile, several major tax proposals are advancing in the great plains, with Iowa considering a major cut to unemployment taxes, North Dakota advancing new benefits for private schools, and Wyoming cutting property taxes. The District of Columbia is facing a more than a $1 billion revenue shortfall over the next three years, compared to previous estimates, and a mild recession due in large part to the layoffs of federal workers. 

Proposed Missouri Tax Shelter Would Aid the Wealthy, Anti-Abortion Centers Alike

In Missouri, donations to anti-abortion pregnancy resource centers come with state tax credits valued at 70 cents on the dollar. One bill currently being debated in the state would increase that matching rate to 100 percent—that is a full, state-funded reimbursement of gifts to anti-abortion groups.

Trump’s Address to Congress Obscures His Actual Tax Agenda

In last night’s address to Congress, President Trump spent more time insulting Americans, lying, and bragging than he did talking about taxes. But regardless of what President Trump and Elon Musk talk about most loudly and angrily, there is one clear policy that they and the corporations and billionaires that support them will try hardest […]

A Well Targeted Federal Renter Credit Could Help Reduce Wealth Gaps

While lawmakers often speak about income inequality, less attention is paid to wealth inequality. Wealth is distributed even more unequally than income in the U.S. in ways that reinforce racial divides, leave some households with too little to handle unexpected expenses, and enable some households to pass down enormous intergenerational wealth. A renter tax credit is one tool lawmakers can use to reduce wealth inequalities both within racial and ethnic groups and between these groups. As we show in our new analysis, Black and Hispanic households are more likely to be renters and hold less wealth than white households.

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High-Rent, Low-Wealth: Addressing the Racial Wealth Gap through a Federal Renter Credit

March 3, 2025 • By Brakeyshia Samms, Emma Sifre, Joe Hughes

High-Rent, Low-Wealth: Addressing the Racial Wealth Gap through a Federal Renter Credit

While the federal tax code has some policies focused on raising income of low earners, it contains fewer provisions designed specifically to address wealth inequality. A renter tax credit offers a simple, administratively practical means of reaching low-wealth populations through the federal tax code without requiring a comprehensive measurement of every household’s wealth.

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