Hawaii

As we kick off a new year, several states are facing revenue shortfalls. Some lawmakers are approaching the challenge with sustainable and equitable solutions.

The 2025 federal tax law risks making 529 plans more costly for states by increasing tax avoidance and allowing wealthy families to use these funds for private and religious K-12 schools.

While a federal SALT cap is hotly debated, capping deductibility at $10,000 was an unambiguously good idea at the state level. States would be smart to stick with the current cap or, better yet, go even farther and repeal SALT deductions outright. Going along with a higher federal SALT cap would double down on a regressive tax cut that will mostly benefit a small number of relatively wealthy state residents and cost states significant revenue.

If instead of giving $117 billion to the richest 1 percent, that money had been evenly divided among all Americans, we'd each get $343 - or nearly $1,400 for a family of four.

President Trump has signed into law the tax and spending “megabill” that largely favors the richest taxpayers and provides working-class Americans with relatively small tax cuts that will in many cases be more than offset by Trump's tariffs.

The predominant feature of the tax and spending bill working its way through Congress is a massive tax cut for the richest 1 percent — a $114 billion benefit to the wealthiest people in the country in 2026 alone.

The Senate tax bill under debate right now would bring very large tax cuts to very high-income people. In total, the richest 1 percent would receive $114 billion in tax cuts next year alone. That would amount to nearly $61,000 for each of these affluent households.

The poorest fifth of Americans would receive 1 percent of the House reconciliation bill's net tax cuts in 2026 while the richest fifth of Americans would receive two-thirds of the tax cuts. The richest 5 percent alone would receive a little less than half of the net tax cuts that year.

Want to know more about the tax and spending megabill that President Trump recently signed into law? We've got you covered.

While students and families are enjoying spring break vacations, legislative sessions are still in full swing. And some are poised for a spring tax break season as proposals advance with major implications for the sustainability of state budgets.  

Attempts by the Department of Homeland Security to secure private information from the IRS on people who file taxes with an Individual Taxpayer Identification Number is a violation of federal privacy laws that protect taxpayers. It is also a change that could seriously damage public trust in the IRS, which could jeopardize billions of dollars in tax payments by hardworking immigrant families.

Summary The new presidential administration and Congress have indicated that they intend to bring about a dramatic federal retreat in funding for health care, food assistance, education, and other services that will push more of the responsibility for providing these essential services to the states. Meeting these new obligations would be a challenging task for […]

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.

The Trump Administration’s plan to turn IRS agents into deportation agents will result in lower tax collections in addition to the harm done to the families and communities directly affected by deportations.

Local income taxes can be an important progressive revenue raiser, as they ask more of higher-income households and are connected to ability to pay. They can raise substantial revenue to fund key public services to make cities and regions better off.

As state legislative sessions ramp up many lawmakers discuss their prioritization of affordability of necessities like food and housing as they craft their legislative agendas. Arkansas, Mississippi and Utah are looking to reduce or fully exempt groceries from their state sales taxes. Meanwhile, multiple proposals to reduce property taxes are making their way around state […]

The anti-tax playbook has been on full display in recent weeks as state policymakers run their offenses against public services and shared priorities. As the playbook dictates, if you have a little breathing room in your budget, propose cuts to the one major tax (personal income tax) that tends to ask more of those who […]

Undocumented immigrants paid $96.7 billion in federal, state, and local taxes in 2022. Providing access to work authorization for undocumented immigrants would increase their tax contributions both because their wages would rise and because their rates of tax compliance would increase.

Undocumented immigrants who work and pay taxes but don't have a valid Social Security number for either themselves or their children are excluded from federal EITC and CTC benefits. Fortunately, several states have stepped in to ensure undocumented immigrants are not left behind by the gaps in the federal EITC and CTC. State lawmakers should continue to ensure that immigrants who are otherwise eligible for these tax credits receive them.

This week, it was the best of times or, in some cases, the worst of times for tax policy in two different states...