California
State Rundown 10/27: Pumpkin Spice & Everything Nice
• By ITEP Staff
The end of Spooky Season is near but that hasn’t stopped state lawmakers from adding their frightening plans into the bubbling cauldron of bad tax policy ideas...
Boosting Incomes and Improving Tax Equity with State Earned Income Tax Credits in 2021
• By Aidan Davis
The EITC benefits low-income people of all races and ethnicities. But it is particularly impactful in historically excluded Black and Hispanic communities where discrimination in the labor market, inequitable educational systems, and countless other inequities have relegated a disproportionate share of people to low-wage jobs.
State Rundown 10/13: Haven Sent Edition
• By ITEP Staff
The release of the ‘Pandora Papers’ showed once again that states and their tax systems play an important role in wealth inequality, and in this case, worsening it...
McClatchy: Biden’s spending plan has big income tax changes. Here are the Californians who would benefit
October 12, 2021
Chief beneficiaries of tax cuts would be parents and very low-income workers without children who are among the lowest 20% of income earners, which means those making less than $29,100 in California. Increases in the Child Tax Credit and the Earned Income Tax Credit help people in their income bracket. “This is going to have […]
State Income Taxes and Racial Equity: Narrowing Racial Income and Wealth Gaps with State Personal Income Taxes
• By Carl Davis, Jessica Schieder, Marco Guzman
10 state personal income tax reforms that offer the most promising routes toward narrowing racial income and wealth gaps through the tax code.
Tax Changes in the House Ways and Means Committee Build Back Better Bill
• By ITEP Staff, Matthew Gardner, Steve Wamhoff
This report finds that the vast majority of these tax increases would be paid by the richest 1 percent of Americans and foreign investors. The bill’s most significant tax cuts -- expansions of the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC) -- would more than offset the tax increases for the average taxpayer in all income groups except for the richest 5 percent.
State Rundown 9/15: It’s a Little Too Quiet…
• By ITEP Staff
Though we can’t fault anyone for being distracted by the major stories of the day, we at ITEP remain committed to keeping you up to date on what’s happening in the tax world around you...
Extending Federal EITC Enhancements Would Bolster the Effects of State-Level Credits
• By Aidan Davis
The EITC expansion targets workers without children in the home. In 2022 it would provide a $12.4 billion boost, benefiting 19.5 million workers who on average would receive an income boost of $730 dollars.
Frequently Asked Questions about Proposals to Repeal the Cap on Federal Tax Deductions for State and Local Taxes (SALT)
• By Carl Davis, ITEP Staff, Steve Wamhoff
Even though Democrats in Congress uniformly opposed the TCJA because its benefits went predominately to the rich, many Democratic lawmakers now want to give a tax cut to the rich by repealing the cap on SALT deductions.
State Rundown 9/1: Labor Day Edition
• By ITEP Staff
Labor Day is around the corner and in the spirit of celebrating the achievements of workers around the country, we here at ITEP want to call attention to the states (and territories) that are using tax policy to support workers and residents alike...
Millionaire Sounds Off on Calls to Lift SALT Deduction Cap
• By Reggie Rucker
We asked New York state resident Morris Pearl, former Blackrock executive and current chair of the Patriotic Millionaires, a few questions to hear straight from the mouth of a millionaire how the SALT cap and its proposed repeal would affect his life.
Options to Reduce the Revenue Loss from Adjusting the SALT Cap
• By Carl Davis, ITEP Staff, Matthew Gardner, Steve Wamhoff
If lawmakers are unwilling to replace the SALT cap with a new limit on tax breaks that raises revenue, then any modification they make to the cap in the current environment will lose revenue and make the federal tax code less progressive. Given this, lawmakers should choose a policy option that loses as little revenue as possible and that does the smallest amount of damage possible to the progressivity of the federal tax code.
State Rundown 8/4: Tis the Season…for Unnecessary Sales Tax Holidays
• By ITEP Staff
It’s beginning to look a lot like that time of year again. That’s right, it’s sales tax holiday season and states across the country are doing their best to induce spending that would probably occur regardless...
State Rundown 7/21: States Go for Tax Policy Gold This Olympics Season
• By ITEP Staff
It’s Olympics season! As countries around the globe battle for first place in a plethora of sports and contests it’s as good a time as any to look around America to see which states deserve a gold medal in the ‘Equitable Tax Policy’ event...
Napa Valley Register: California’s progressive tax system proved its worth during the pandemic
July 8, 2021
In fact, the Institute on Taxation and Economic Policy reports that California’s tax system does the most of any state to alleviate inequality — while taxes in most states serve to widen the gap between rich and poor. Read more
State Rundown 7/7: The New Fiscal Year Starts off With a Bang, And Not Just Fireworks
• By ITEP Staff
States were busy over the past week despite the Fourth of July holiday. Many are gearing up for upcoming tax and budget clashes that could shape their futures for some time...
Congress Should Follow States’ Lead on Inclusive Economic Recovery
• By Meg Wiehe
President Joe Biden's American Families and Jobs plans intend to “build back better” and create a more inclusive economy. To fully live up to this ideal, the final plan must include undocumented people and their families.
State-Level EITC Victories in 2021
• By Aidan Davis
A growing group of state lawmakers are recognizing the extent to which low- and middle-income Americans are struggling and the ways in which their state and local tax systems can do more to ensure the economic security of their residents over the long run. To that end, lawmakers across the country have made strides in enacting, increasing, or expanding tax credits that benefit low- and middle-income families. Here is a summary of those changes and…
State Rundown 6/24: Late June State Fiscal Debates Unusually Active
• By ITEP Staff
Delayed legislative sessions and protracted federal aid debates have made for a busier June than normal for state fiscal debates. Arizona, New Hampshire, and North Carolina legislators, for example, are still pushing for expensive and regressive tax cuts in their states while they remain in session...
State Rundown 6/16: Progressive Tax Policy Keeps Racking Up Wins
• By ITEP Staff
Taxing rich households and large corporations to fund vital investments in education and other shared priorities has long been a winner in the eyes of the American public, and more recently has also enjoyed a string of victories in state legislatures and at the ballot box. That win streak continued this week as Arizona’s voter-approved tax surcharge on the rich and Seattle, Washington’s payroll tax on high-profit, high-salary businesses both survived court challenges, and Massachusetts…
State Rundown 6/7: Remaining State Legislative Sessions Are Heating up as Budget Deadlines Loom
• By ITEP Staff
Just as an early summer heatwave brought soaring temperatures this past weekend through much of the lower 48 states, several state legislative sessions are heating up as legislators scramble to make tough budget decisions. Massachusetts lawmakers are voting on a fiery new "millionaires' tax" that would support transportation and education revenue needs, and Connecticut will likely restore its state Earned Income Tax Credit (EITC) back to 30 percent. Illinois’s decision to cut back corporate tax…
Bloomberg: Hedge Funds, Tech Spur Texas Wealth Boom as California Fades
June 4, 2021
The growth comes with headaches. Traffic is getting worse and public transportation is limited. The influx of people is driving up housing prices, forcing up the cost of living by boosting property taxes. Given high levies on real estate and the state sales tax, the fiscal burden on middle-class people is higher in Texas than […]
Income Tax Increases in the President’s American Families Plan
• By ITEP Staff, Matthew Gardner, Steve Wamhoff
President Biden’s American Families Plan includes revenue-raising proposals that would affect only very high-income taxpayers.[1] The two most prominent of these proposals would restore the top personal income tax rate to 39.6 percent and eliminate tax breaks related to capital gains for millionaires. As this report explains, these proposals would affect less than 1 percent of taxpayers and would be confined almost exclusively to the richest 1 percent of Americans. The plan includes other tax…
State Rundown 5/13: States Get Federal Aid and Guidance as Many Sessions Wind Down
• By ITEP Staff
We had our noses buried in new American Rescue Plan guidance...when we heard the refreshing news that Missouri leaders are on the verge of modernizing their tax code, not only by becoming the final state to apply sales taxes to online purchases, but also by enacting an Earned Income Tax Credit (EITC)...Meanwhile, tax debates are also highly active in California, Colorado, Louisiana, Maine, and Nebraska. We also share some of our own reporting on recent…
Nearly 20 Million Will Benefit if Congress Makes the EITC Enhancement Permanent
• By Aidan Davis
Overall, the EITC enhancement would provide a $12.4 billion boost in 2022 if made permanent, benefiting 19.5 million workers. It would have a particularly meaningful impact on the bottom 20 percent of eligible households who would receive more than three-fourths of the total benefit. Forty-one percent of households in the bottom 20 percent of earners would benefit, receiving an average income boost of 6.3 percent, or $740 dollars.
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