Recent Work

Pounds, Dollars, It’s Still Comparative Crumbs for Workers

March 9, 2018 • By Matthew Gardner

The tobacco company Reynolds American announced this week that its full-time employees will receive a one-time bonus of $1,000 in the wake of a sharp reduction in its British parent company’s tax bill.

State Rundown 3/8: March Tax Debates “In Like a Lion”

March 8, 2018 • By ITEP Staff

This week was very active for state tax debates. Georgia, Idaho, and Oregon passed bills reacting to the federal tax cut, as Maryland and other states made headway on their own responses. Florida lawmakers sent a harmful "supermajority" constitutional amendment to voters. New Jersey now has two progressive revenue raising proposals on the table (and a need for both). Louisiana ended one special session with talks of yet another. And online sales taxes continued to make news nationally and in Kansas, Nebraska, and Pennsylvania.

Trends We’re Watching in 2018, Part 1: State Responses to Federal Tax Cut Bill

March 5, 2018 • By Dylan Grundman O'Neill

Over the next few weeks we will be blogging about what we’re watching in state tax policy during 2018 legislative sessions. And there is no trend more pervasive in states this year than the need to sort through and react to the state-level impact of federal tax changes enacted late last year.

Five Ways States Can Recoup Corporations’ Massive Federal Tax Giveaway

March 2, 2018 • By Aidan Davis

Corporate America is doing alright. Corporate profits soared last year, and 2018 has already brought a major windfall in the form of the Trump-GOP tax law, which dramatically cut the federal corporate tax rate from 35 percent to 21 percent and shifted to a territorial tax system, giving income earned offshore by U.S. companies a free pass by no longer making it subject to U.S. taxes.

State Rundown 2/28: February a Long Month for State Tax Debates

February 28, 2018 • By ITEP Staff

February may be the shortest month but it has been a long one for state lawmakers. This week saw Arizona, Idaho, Oregon, and Utah seemingly approaching final decisions on how to respond to the federal tax-cut bill, while a bill that appeared cleared for take-off in Georgia hit some unexpected turbulence. Other states are still studying what the federal bill means for them, and many more continue to debate tax and budget proposals independently of the federal changes. And be sure to check our "What We're Reading" section for news on corporate tax credits from multiple states.

Why the Minute Federal 529 Provision Has Huge Consequences for States

February 23, 2018 • By Ronald Mak

When Republican leaders rushed through an overhaul to the federal tax code over a seven-week legislative period, they failed to acknowledge that many provisions in their bill would have negative consequences for states. One such provision of the Tax Cuts and Jobs Act that undermines state laws is the expansion of federal tax breaks that now allows taxpayers to use 529 savings plans to pay for private K-12 education.

Preventing State Tax Subsidies for Private K-12 Education in the Wake of the New Federal 529 Law

February 23, 2018 • By Ronald Mak

This policy brief explains the federal and various state-level breaks for 529 plans and explores the potential impact that the change in federal treatment of 529 plans will have on state revenues.

State Rundown 2/22: State Tax Debates Grind On

February 22, 2018 • By ITEP Staff

This week, major tax packages relating to the federal tax-cut bill made news in Georgia, Iowa, and Louisiana, as Minnesota and Oregon lawmakers also continue to work out how their states will be affected. New Mexico's legislative session has finished without significant tax changes, while Idaho and Illinois's sessions are beginning to heat up, and Vermont's school funding system is under the microscope.

Cuomo’s Tax Overhaul Response Is a Missed Opportunity

February 21, 2018 • By Aidan Davis

Any politician can score points by railing against President Trump and his wildly unfair, loophole-ridden tax law. But if New York’s working people find out they will be subjected to a new and complicated set of state tax rules all to help the richest 5 percent, they’ll wonder why a better solution that targets corporations and high-income earners who just received a sizable federal tax break, was not found. In the wake of the Trump-GOP tax law, this is a missed opportunity for lawmakers in New York to increase taxes on those who just benefited from a substantial tax cut.

Why We’re Not Eternally Grateful for $1,000 Crumbs

February 20, 2018 • By Jenice Robinson

Two narratives that intentionally obscure who benefits from the tax law are emerging. One focuses on the personal income tax cuts that will result in an increase in net take-home pay for many employees once their employers adjust withholding. Anecdotes abound of working people getting a $100 or more increase, after taxes, per paycheck, but the reality is that most workers will receive a lot less than that. Meanwhile, the wealthiest 1 percent of households will receive an average annual tax break of $55,000, an amount that nearly eclipses the nation’s median household income.

Mnuchin’s Not So Grand Stand on the Carried Interest Loophole Explained

February 15, 2018 • By Matthew Gardner

When President Trump released the initial outline of his tax reform plan in April, carried interest repeal was nowhere to be found. And when Congress hammered out a tax plan in late December, lawmakers agreed to reduce the cost of the carried interest tax provision by about 5 percent. (Full repeal would have raised $20 billion over a decade; the enacted provision raises about $1 billion.)

State Rundown 2/14: To Couple or Not to Couple?

February 14, 2018 • By ITEP Staff

This Valentine's week finds California, Georgia, Missouri, New York, Oregon, and other states flirting with the idea of coupling to various components of the federal tax-cut bill. Meanwhile, lawmakers seeking revenue solutions to budget shortfalls in Alaska, Oklahoma, and Wyoming saw their advances spurned, and anti-tax advocates in many states have been getting mixed responses to their tax-cut proposals. And be sure to check out our "what we're reading" section to see how states are getting no love in recent federal budget developments.

A Gas Tax Hike Is the Obvious Answer to Infrastructure Funding

February 14, 2018 • By Steve Wamhoff

As part of his budget plan released Monday, President Trump offered an infrastructure proposal that he describes as a $1.5 trillion 10-year surge in infrastructure investments. The details of the proposal explain that the federal government would put up only $200 billion of this total, which the administration claims will be offset with cuts in other spending. Even this relatively meager funding amount is illusory because it would clearly be financed by cutting other federal spending — including infrastructure investments.

GOP Dilemma: Love the Tax Cut, Hate the Agency that Administers It

February 14, 2018 • By Matthew Gardner

The president’s budget proposal would cut the agency’s baseline funding from $12 billion to $11.1 billion this year. This is almost a quarter less, in inflation-adjusted terms, than the $14.4 billion the agency received in fiscal year 2010. Not surprisingly, the long, steady decline of IRS funding during this period has led to a reduction in staffing: the agency’s 2016 employee total of 77,000 was 17,000 lower than at the beginning of the decade.

Amazon Inc. Paid Zero in Federal Taxes in 2017, Gets $789 Million Windfall from New Tax Law

February 13, 2018 • By Matthew Gardner

The online retail giant has built its business model on tax avoidance, and its latest financial filing makes it clear that Amazon continues to be insulated from the nation’s tax system. In 2017, Amazon reported $5.6 billion of U.S. profits and didn’t pay a dime of federal income taxes on it. The company’s financial statement suggests that various tax credits and tax breaks for executive stock options are responsible for zeroing out the company’s tax this year.