New Jersey
State Rundown 6/5: Illinois Gets Busy
• By ITEP Staff
Illinois made big news in several tax and budget areas recently, including sending a graduated income tax amendment to voters in 2020, as well as legalizing and taxing cannabis and updating gas and cigarette taxes for infrastructure improvements. Connecticut made smaller waves with sales tax reforms, a plastic bag tax, and a progressive mansion tax. Property tax credits were proposed in both Maine and New Jersey. And Nevada extended a business tax to give teachers…
Tax Credit Wins and Continued Debates in the States
• By Aidan Davis
Income inequality continues to be an undercurrent in public discourse about our economy and how working families are faring. It drove the national debate over the 2017 Tax Cuts and Jobs Act, which, mounds of data reveal has exacerbated the problem. Some elected federal officials have responded to this step backward with calls for higher […]
ITEP Resources on Proposed SALT Workaround Regulations
• By Carl Davis
After states implemented laws that allow taxpayers to circumvent the new $10,000 cap on deductions for state and local taxes (SALT), the IRS has proposed regulations to address this practice. It’s a safe bet the IRS will try to crack down on the newest policies that provide tax credits for donations to public education and other public services, but it remains to be seen whether new regulations will put an end to a longer-running practice…
Newark Star-Ledger: Will This Tax Plan Boost Booker’s Campaign?
May 31, 2019
In New Jersey, almost three-quarters of the benefits, 74 percent, would flow to the poorest 40 percent of taxpayers, according to the Institute on Taxation and Economic Policy, a progressive research group. Under the the Trump tax law, 72 percent of the benefits went to the richest 20 percent in the state and capped the […]
State Rundown 5/29: In Taxes and Television, Endings Can Be Hard
• By ITEP Staff
Like certain recent controversially concluded television shows, tax and budget debates can end in many ways and often receive mixed reviews. Illinois leaders, for example, ended on a cliffhanger by approving a historic constitutional amendment to create a graduated income tax in the state, whose ultimate conclusion will be crowdsourced by voters next November. Arizona’s fiscal finale fell flat with many observers due to corner-cutting on needed investments and a heavy focus on tax cuts.…
These States Abandoned Old Gas Tax Structures in Favor of More Sustainable Variable-Rate Gas Taxes
• By ITEP Staff
Because of these reforms, more than 193 million people (or 59 percent of the U.S. population) now live in places where the state gas tax rate automatically varies over time.
State Rundown 5/16: Tensions Remain High Over Budgets and School Finances in Several States
• By ITEP Staff
Tax and budget negotiations remain at standstills in Louisiana and Minnesota, as school funding debates and teacher protests again captured headlines in several states. Oregon lawmakers, for example, finally passed a mixed-bag tax package that won’t improve tax equity but will raise much-needed revenue for education. Meanwhile their counterparts in Nebraska continue to debate highly […]
State Rundown 5/9: Illinois Moves Closer to a Progressive Income Tax
• By ITEP Staff
Lawmakers in Illinois and Ohio have advanced major tax proposals but cannot rest just yet, as they must still get past the other legislative chamber. Their counterparts in Michigan, Minnesota, Nebraska, and Oregon, meanwhile, are all at impasses over education funding, as those in Texas left their school funding disagreement unresolved at least until they reconvene...in 2021. And in an era of many states pre-empting smaller jurisdictions by revoking local decision-making powers, leaders in Colorado…
The Case for Extending State-Level Child Tax Credits to Those Left Out: A 50-State Analysis
• By Aidan Davis, Meg Wiehe
As of 2017, 11.5 million children in the United States were living in poverty. A national, fully-refundable Child Tax Credit (CTC) would effectively address persistently high child poverty rates at the national and state levels. The federal CTC in its current form falls short of achieving this goal due to its earnings requirement and lack of full refundability. Fortunately, states have options to make state-level improvements in the absence of federal policy change. A state-level…
State Rundown 4/11: An Estate Tax Win, Opioid Progress, and Teacher Uprising Updates
• By ITEP Staff
Hawaii made progress in pushing back against the increasing concentration of wealth and power by beefing up its estate tax. Delaware, New Jersey, and Rhode Island all took steps toward taxing opioid producers to raise funds to address the ongoing opioid crisis. Oregon lawmakers continue to try to address their chronic school underfunding with a $2 billion annual investment, in contrast to some of their counterparts in North Carolina who are responding to similar issues…
What to Watch for When the IRS Releases Its SALT Workaround Regulations
• By Carl Davis
The Treasury Department and IRS last summer proposed regulations that would make it more difficult for taxpayers to avoid the $10,000 cap on deductions for state and local taxes (SALT). Now, likely days away from the unveiling of the final version of IRS regulations on SALT cap workarounds, Carl Davis recaps the finer points ITEP will be watching for when the regulations become public.
State Rundown 3/27: Spring Bringing Smart State Tax Policy So Far
• By ITEP Staff
Though a long winter and a rough start to spring weather have wreaked havoc in much of the country, lawmakers are off to a good start in the world of state fiscal policy so far. In the last week, a progressive revenue package was passed in the nick of time in NEW MEXICO, a service-sapping tax cut was vetoed in KANSAS, and a regressive and unsustainable tax shift was soundly defeated in NORTH DAKOTA. Meanwhile, gas tax updates…
State Rundown 3/14: Tax Fairness Proposed in Illinois
• By ITEP Staff
More than three billion dollars could be raised under a major progressive tax plan proposed by Illinois Gov. J.B. Pritzker this week, the point being to simultaneously improve the state’s upside-down tax code and address its notorious budget gap issues. One state, Utah, may already be looking at a special session to revisit the sales tax reform debate that ended this week without resolution, in contrast to Alabama and Arkansas, where leaders finally resolved years-long…
GQ: Local and State Taxes Are Making the Wealthy More Rich Now Too
March 12, 2019
According to a new report by the progressive think tank Institute on Taxation and Economic Policy (ITEP), as relayed in the Washington Post, state and local governments that are heavily reliant on sales and excise taxes, rather than income taxes, shift the economic burden onto low- and moderate-income taxpayers. At every level, those who work […]
Philadelphia Inquirer: Why It’s Not as Simple as ‘New Jersey Is a High-Tax State’ or ‘Texas Is a Low-Tax State’
March 10, 2019
A recent study by the Institute on Taxation and Economic Policy analyzed the burdens of state and local taxes across the nation. The results were eye opening, though hardly surprising. Nationally, households in the lowest 20 percent income group spent 11.4 percent of their income on state and local taxes. In comparison, the top 1 […]
State Rundown 3/6: March Tax Debates Contain Sanity Amid Usual Madness
• By ITEP Staff
State policymakers around the nation this week served up a handful of harmful and upside-down tax proposals, but these were refreshingly outnumbered by sound tax and budget policy proposals in several other states. NEW JERSEY Gov. Phil Murphy made tax fairness an explicit priority in his budget address, the NEW MEXICO House passed progressive reforms to improve the state’s schools and tax code, states such as VERMONT are looking to raise funds from legalized cannabis…
Fairness Matters: A Chart Book on Who Pays State and Local Taxes
• By ITEP Staff
There is significant room for improvement in state and local tax codes. State tax codes are filled with top-heavy exemptions and deductions and often fail to tax higher incomes at higher rates. States and localities have come to rely too heavily on regressive sales taxes that fail to reflect the modern economy. And overall tax collections are often inadequate in the short-run and unsustainable in the long-run. These types of shortcomings provide compelling reason to…
State Rundown 2/14: We ♥ Taxes!
• By ITEP Staff
Happy Valentine’s Day to all lovers of quality research, sound fiscal policy, and progressive tax reforms! This week, some leaders in ARKANSAS displayed their infatuation with the rich by advancing regressive tax cuts, but others in the state are trying to show some love to low- and middle-income families instead. WISCONSIN lawmakers are devoted to tax reductions for the middle class but have not yet decided how to express those feelings. NEBRASKA legislators are playing…
SALT Deduction Cap Should be Reformed, Not Repealed
• By Steve Wamhoff
On Monday a group of Senators and Representatives from the Northeast announced their latest proposal to repeal the cap on deductions for state and local taxes (SALT), this time offsetting the costs by restoring the top personal income tax rate to 39.6 percent. This is an improvement over previous proposals to repeal the cap on SALT deductions without offsetting the costs at all. But the new approach does not improve our tax system overall. Instead,…
NJTV: Lawmakers Introduce Bipartisan Bill to Fully Restore SALT Deduction
February 11, 2019
But analysts with the nonpartisan Institute on Taxation and Economic Policy say it’s inaccurate to isolate the SALT deduction. In reality, the average taxpayer in New Jersey will pay less. On balance, New Jersey will pay $8.1 billion less in federal taxes due to the GOP reform. Their figures show 82 percent of taxpayers will […]
A Tale of Two States: How State Tax Systems Perpetuate Income Inequality
• By ITEP Staff
To explain how state tax systems make income inequality worse, we compared tax systems in New Jersey and Texas which, before taxes, have similar levels of income inequality. This comparison provides an example of how policymakers’ decisions affect the economic wellbeing of their constituents.
Trends We’re Watching in 2019: Cannabis Tax Implementation and Reform
• By Carl Davis
Few areas of state tax policy have evolved as rapidly as cannabis taxation over the last few years. The first legal, taxable sale of recreational cannabis in modern U.S. history did not occur until 2014. Now, just five years later, a new ITEP report estimates that recreational cannabis is generating more than $1 billion annually in excise tax revenues and $300 million more in general sales tax dollars.
Trends We’re Watching in 2019: The Use of Targeted Tax Breaks to Help Address Poverty and Inequality
• By Aidan Davis
Continuing to build upon the momentum of previous years, states are taking steps to create and improve targeted tax breaks meant to lift their most in-need state residents up and out of poverty. Most notably, a range of states are exploring ways to restore, enhance or create state Earned Income Tax Credits (EITC). EITCs are an effective tool to help struggling families with low wages make ends meet and provide necessities for their children. The…
City Lab: The Airbnb Effect: It’s Not Just Rising Home Prices
February 4, 2019
And cities with less stringent Airbnb regulations might also be losing out on a lot of tax revenue. Traditional lodging entities (when combining city, state, and county taxes), are taxed at an average rate of 13 percent in the 150 largest cities. But Airbnb is treated differently in different jurisdictions, and is trusted to self-report […]
Taxing Cannabis
• By Carl Davis, Misha Hill, Richard Phillips
State policy toward cannabis is evolving rapidly. While much of the debate around legalization has rightly focused on potential health and criminal justice impacts, legalization also has revenue implications for state and local governments that choose to regulate and tax cannabis sales. This report describes the various options for structuring state and local taxes on cannabis and identifies approaches currently in use. It also undertakes an in-depth exploration of state cannabis tax revenue performance and…
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