Institute on Taxation and Economic Policy (ITEP)

California

Iowa Flat Tax Shows Why Such Policies Are a Problem Everywhere

As Iowa lawmakers change the state’s graduated personal income tax to a single flat rate, they are designing a state tax code where the rich will pay a lower rate overall than families with modest means.

USA Today: Are California’s Taxes Really That High? Not If You’re of ‘Modest Means,’ Report Says

May 1, 2024

Whether it be that all Californians surf, live by the beach or only vote blue, there are a lot of assumptions about residents of the Golden State. Yet a new report is challenging one of the most widely held belief – that Californians shoulder the nation’s highest tax burdens. Read more.

Sacramento Bee: Is California Really a High-Tax State? New Findings Question That Claim

April 25, 2024

Maybe California is not such a high tax state after all — at least for lower income families. “For families of modest means, California is not a high tax state,” says a new study from the Institute on Taxation and Economic Policy, a liberal Washington research group. Read more.  

NewsRadio WFLA: Poorest Floridians Taxed at Higher Rate than Richest Californians

April 24, 2024

Florida Policy Institute (FPI) and the Institute for Taxation and Economic Policy (ITEP) released a study today that found California’s tax system is fairer than Florida’s.

Tax History Matters: A Q&A with Professor Andrew Kahrl, Author of ‘The Black Tax’

In his new book, The Black Tax: 150 Years of Theft, Exploitation, and Dispossession in America, Professor Andrew Kahrl walks readers through the history of the property tax system and its structural defects that have led to widespread discrimination against Black Americans.

State Rundown 4/17: Tax Cut Proposals and the Consequences of Bad Tax Cuts

Happy (belated) Tax Day!

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Is California Really a High-Tax State?

April 16, 2024 • By Carl Davis, Eli Byerly-Duke

Is California Really a High-Tax State?

Key Findings For families of modest means, California is not a high-tax state. California taxes are close to the national average for families in the bottom 80 percent of the income scale. For the bottom 40 percent of families, California taxes are lower than states like Florida and Texas. The highest earners usually pay higher […]

The Atlantic: The Myth of the Mobile Millionaire

April 15, 2024

In 2010, as California was moving forward with plans to raise taxes sharply on million-dollar earners, opponents issued dire warnings that the hike would drive away entrepreneurs and cripple the state economy. “There’s nothing more portable than a millionaire and his money,” warned the ranking Republican on the state Senate’s budget committee. The tax hike passed anyway—and California’s share of the nation’s million-dollar earners actually grew, reaching 18 percent in 2021. (Californians make up just less than 12 percent of the overall population.) And yet, when California recently considered a proposal to impose a wealth tax on mega-rich households, even some Democrats echoed the same…

Fairness Matters: A Chart Book on Who Pays State and Local Taxes

State and local tax codes can do a lot to reduce inequality. But they add to the nation’s growing income inequality problem when they capture a greater share of income from low- or moderate-income taxpayers. These regressive tax codes also result in higher tax rates on communities of color, further worsening racial income and wealth divides.

These Three Local EITCs Are Boosting Family Incomes at Tax Time

This tax season more than 800,000 households in New York City, Maryland's Montgomery County, and San Francisco are set to receive a boost through local refundable EITCs. These credits put dollars directly into the pockets of low-income households, equipping families with resources to better make ends meet and invest in their futures. In turn, they can help build stronger, fairer, and more resilient communities.

Capital & Main: Extreme Wealth Is on the Ballot This Year — Will Americans Vote to Tax the Rich?

April 3, 2024

On March 7, President Joe Biden reintroduced proposals to increase taxes on the wealthiest Americans and the nation’s most profitable corporations. The move virtually ensures that the nation’s extreme wealth inequality — more than one in four dollars in the country is held by a tiny sliver of households with a net worth over $30 million — will be part of the national election debate. But excessive wealth may take center stage in at least 10 states, ranging from Democratic bastions such as California, Hawaii and New York to swing states such as Nevada and Pennsylvania.

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Our Taxes Can Set Kids Up for Success

March 26, 2024 • By Brakeyshia Samms

Our Taxes Can Set Kids Up for Success

Every child deserves the opportunity to succeed in society – and tax policy has a huge role to play in making that happen. Better tax policy can help prepare our young children with skills to become successful and thriving adults.

Local Mansion Taxes: Building Stronger Communities with Progressive Taxes on High-Value Real Estate

More than one dozen cities and counties levy progressive taxes on high-price real estate transactions — sometimes called mansion taxes — and over a dozen more are considering such policies. By asking buyers and sellers with greater financial means to contribute more to the common good, these policies are equipping communities with resources to make progress on critical challenges of local and national concern.

Sacramento Bee: California Families Could Save Thousands of Dollars From Proposed Child Tax Break. Here’s Why

March 12, 2024

President Joe Biden’s child tax credit plan would benefit millions of California parents, saving eligible families an average of $2,980, according to data from Washington’s Institute on Taxation and Economic Policy.

State Rundown 3/6: Tax Cuts Aren’t Forever, or for Evers

Anti-tax interests finally found the end of the tax cutting appetite in a few states this week...

ITEP’s Kamolika Das Testifies on Pennsylvania’s Upside-Down Tax Code

March 4, 2024

Below is written testimony delivered by ITEP Local Policy Director Kamolika Das before the Pennsylvania House Finance Subcommittee on Tax Modernization & Reform on March 1, 2024. Good afternoon and thank you for this opportunity to testify. My name is Kamolika Das, I live in South Philly, and I’m the Local Tax Policy Director at […]

State Rundown 2/28: States Keep Busy While Washington Stalls

State legislative sessions are in full swing with New Jersey and Oklahoma both particularly active this week...

The ‘Low-Tax’ Lie: States Hyped for Low Taxes Usually Only Low-Tax for the Rich

It’s hard to go a week without seeing a politician or a news article hype up a state as the place that everyone is moving to – or should move to – because of low taxes. However, there’s a big problem with these proclamations: they aren’t true.  

IRS Commissioner, New GAO Report Highlight Importance of Proper IRS Funding

A new GAO report and Commissioner Werfel’s testimony highlight the value and necessity of a well-funded and functioning IRS. Most families and businesses do their best to pay taxes accurately and on time. The nation benefits from a modern revenue agency that can make this process as easy and simple as possible and identify complex tax schemes that deprive the country of revenues.

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State Rundown 2/14: Our Love Language is Taxes

February 14, 2024 • By ITEP Staff

State Rundown 2/14: Our Love Language is Taxes

As many of you may know, we love taxes, along with the many great things they provide for our communities...

LA Times: Taxpayer ‘Protection’ or Taxpayer ‘Deception’? A New Ballot Measure Aims to Destroy State and Local Budgets

February 14, 2024

It’s indisputable that the decline of state fiscal management in California began with the passage of Proposition 13 in 1978. The tax-cutting initiative upended the tax structure that provided most of the revenues needed by localities and school districts, undermining the locals’ control of their own spending.

State Rundown 2/8: Flowers, Chocolates, and Tax Cuts for the Wealthy?

While we were hoping to get progressive tax policy wins for Valentine’s Day, many state lawmakers have another idea in mind...

House SALT Proposal is Expensive, Unneeded, and Poorly Designed

The SALT Marriage Penalty Elimination Act passed by the House Rules Committee on February 1 is costly, decreasing tax revenue by about $8 billion in 2023. It also mostly only helps taxpayers who are already well off.

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What Do We Mean By “The Rich” — and Does it Matter?

January 29, 2024 • By Michael Ettlinger

What Do We Mean By “The Rich” — and Does it Matter?

It doesn’t matter if someone with a family income of $800,000 per year thinks they aren’t rich because they can’t quit their jobs and retire to a luxury home on the beach in Malibu. They can call themselves what they want. The point is that they are richer than 99 percent of the population and can afford to pay more.

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Three Things to Know This Tax Filing Season

January 26, 2024 • By Joe Hughes

Three Things to Know This Tax Filing Season

The IRS Direct File pilot is currently open to eligible taxpayers here. Millions of American families have now received their W-2s for 2023, signaling the start to a new tax filing season. The IRS has set January 29 as the first date that people can file their tax returns for the previous year, and the […]