Recent Work

How the U.S. Became a Top Secrecy Jurisdiction

February 1, 2018 • By Richard Phillips

Sometimes, ranking near No. 1 in the world is not a badge of pride. According to the Financial Secrecy Index released by the Tax Justice Network (TJN), the United States is the second largest contributor to financial secrecy in the world, placing it in the company of infamous tax havens such as Switzerland (ranked No. 1) and the Cayman Islands (ranked No. 3). Financial secrecy is enabling people to hide income from the authorities to evade taxes or financial regulation, launder profits from crime, finance terrorism, or otherwise break the law.

State Rundown 1/31: Low-Income Families’ Taxes Getting Some Much-Needed Attention

January 31, 2018 • By ITEP Staff

This week was promising for advocates of Earned Income Tax Credits (EITCs) and other tax breaks for workers and their families, which are making headway in Alabama, Maine, Massachusetts, Missouri, Utah, and Wisconsin. The week also saw the unveiling of a tax cut plan in Missouri, a budget-balancing tax increase package in Oklahoma, the end of an unproductive film tax credit in West Virginia, and a very busy week for tax policy in Utah.

How Exxon’s Empty $50 Billion Promise Made Its Way into Trump’s SOTU

January 31, 2018 • By Matthew Gardner

Never one to let the truth get in the way of a good story, House Speaker Paul Ryan immediately published a press release with the headline, “ExxonMobil to Invest an Additional $50 Billion in the U.S. Due to Tax Reform.” The statement was completely faithful to ExxonMobil’s statement, except for the words “additional” and “due to tax reform.” Not to be outdone, President Trump implied during his State of the Union address that the company was investing $50 billion in response to the new tax law. But a closer examination of ExxonMobil’s recent history of domestic spending finds that the…

Fact-Checking Trump’s State of the Union Address on Tax Issues

January 31, 2018 • By Steve Wamhoff

Here are some claims the President made during his State of the Union address, along with the facts.

Moody’s and Conservative Economists Agree: The Trump Corporate Tax Cut Is Not Helping Workers

January 26, 2018 • By Steve Wamhoff

Moody’s does not believe that corporate tax cuts are trickling down to working people as bonuses and pay raises. The real problem with the corporate PR campaign is that even those economists who supported Trump’s corporate tax cut and claimed it would help workers do not believe that it works this way.

Federal Tax Law Will Have Mixed Effect on Taxpayers’ State Tax Bills and States’ Revenue

January 26, 2018 • By Meg Wiehe

Most states piggyback on federal law to some extent for their own taxes, especially personal and corporate income taxes. These states in particular must understand what the federal changes mean for their own tax codes and decide whether to remain “coupled” to changes in the tax bill, decouple from them or take other action in response.

What the Tax Cuts and Jobs Act Means for States – A Guide to Impacts and Options

January 26, 2018 • By ITEP Staff

The recently enacted Tax Cuts and Jobs Act (TCJA) has major implications for budgets and taxes in every state, ranging from immediate to long-term, from automatic to optional, from straightforward to indirect, from certain to unknown, and from revenue positive to negative. And every state can expect reduced federal investments in shared public priorities like health care, education, public safety, and basic infrastructure, as well as a reduced federal commitment to reducing economic inequality and slowing the concentration of wealth. This report provides detail that state residents and lawmakers can use to better understand the implications of the TCJA for…

Key Lessons for States as They Determine Responses to the Federal Tax Bill

January 26, 2018 • By ITEP Staff

The Tax Cuts and Jobs Act (TCJA) was enacted just weeks before many state legislatures began their sessions, leaving state lawmakers, tax officials, and the public scrambling to understand how the bill affects their states and how they should react. The TCJA has many important implications for both the fairness and adequacy of state tax codes and this report aims to summarize those implications and provide guidance on the key decisions facing state policymakers going forward.

IRS Can and Should Block “Charitable Contribution” Schemes

January 25, 2018 • By Steve Wamhoff

States’ attempts to work around the new federal tax law and ensure their residents continue to maximally benefit from state and local tax (SALT) deductions have been in the news since the beginning of the year. At a panel discussion for tax professionals in Washington Thursday, Thomas West, tax legislative counsel at the Treasury Department, cast doubt on proposed work-around schemes that would convert state income tax payments into “charitable contributions.”

State Rundown 1/25: States Begin Tax Debates while Still Racing to Understand Federal Bill

January 25, 2018 • By ITEP Staff

State legislative sessions are in full swing this week as states grapple with revenue shortfalls and the ramifications of the federal tax cut bill. Lawmakers in Alaska and Louisiana, for example, are debating how to handle their revenue shortfalls, and a tax cut proposal in Idaho has been received tepidly. And be sure to peruse our "What We're Reading" section for helpful perspectives on how states are affected by the federal tax cut bill.

It’s a Small Bonus After All

January 24, 2018 • By Matthew Gardner

The Walt Disney Corporation announced this week that in the wake of the new tax bill’s passage, it will spend $125 million on one-time bonuses and $50 million on an education program for some employees, all in 2018. This $175 million spending commitment is notable for two reasons: it’s temporary, and it’s a drop in the bucket for a company that’s likely to see annual tax savings of $1.2 billion a year and has already committed to a $50 billion-plus corporate acquisition of 21st Century Fox’s assets.

Olympics-like Bidding for Amazon’s HQ2 Is a PR Stunt Meant to Extract Tax Subsidies

January 19, 2018 • By Guest Blogger

By Greg LeRoy Amazon.com’s announcement of a 20-site “short list” for its second headquarters, or “HQ2” location, is provoking a public backlash that could reshape how economic development is done in the United States. In one sense, Amazon is continuing to behave as predicted, staging a public-relations stunt apparently to extract the largest possible subsidies […]

Apple Gambled on Congressional Spinelessness on Tax Policy— and Won

January 18, 2018 • By Matthew Gardner

Now, Apple Inc. would like the American public to know that it has “a deep sense of responsibility to give back to our country” a small fraction of its multi-billion-dollar tax cut haul. However, the company’s splashy press release is devoid of any specifics on the jobs it will create as a result of the tax bill. Like other corporate announcements, the company’s recent proclamation of newfound patriotism should be viewed as a public relations ploy designed to convince a skeptical public that working families will see some trickle-down benefit from this historic corporate giveaway.

State Rundown 1/17: Budget Deficits, Online Sales Tax, and More

January 17, 2018 • By ITEP Staff

The big news this week in state tax law is that the U.S. Supreme Court has agreed to take on the issue of online sales, nexus, and sales tax collection. States have increasingly lost out on sales tax revenues as more transactions have shifted online from brick-and-mortar stores and the laws determining who is required to collect and remit sales taxes haven't kept up. This is potentially good news for states—25 of which National Association of State Budget Officers (NASBO) reports started the new year with budgetary deficits. In other news, grappling with the local impact of federal tax reform…

Repealing, or Working Around, the Cap on State and Local Tax Deductions Would Make the Trump-GOP Tax Law Even More Unfair

January 17, 2018 • By Steve Wamhoff

A bipartisan proposal in Congress to eliminate the new $10,000 cap on federal deductions for state and local taxes (SALT) would cost more than $86 billion in 2019 alone and two-thirds of the benefits would go to the richest 1 percent of households. Unfortunately, “work around” proposals in some states to allow their residents to avoid the new federal cap would likely have the same regressive effect on the overall tax code.