In its rush to pass a major rewrite of the tax code before year’s end, Congress appears likely to enact a “tax reform” that creates, or expands, a significant number of tax loopholes.[1] One such loophole would reward some of the nation’s wealthiest individuals with a strategy for padding their own bank accounts by “donating” to support private K-12 schools. While a similar loophole exists under current law, its size and scope would be dramatically expanded by the legislation working its way through Congress.[2]
Oklahoma
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report December 14, 2017 Tax Bill Would Increase Abuse of Charitable Giving Deduction, with Private K-12 Schools as the Biggest Winners
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December 6, 2017 How the House and Senate Tax Bills Would Affect Oklahoma Residents’ Federal Taxes
The House passed its “Tax Cuts and Jobs Act” November 16th and the Senate passed its version December 2nd. Both bills would raise taxes on many low- and middle-income families in every state and provide the wealthiest Americans and foreign investors substantial tax cuts, while adding more than $1.4 trillion to the deficit over ten years. The graph below shows that both bills are skewed to the richest 1 percent of Oklahoma residents.
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blog November 29, 2017 State Rundown 11/29: Thanksgiving Leftovers Edition
The State Rundown is back from Thanksgiving break with a heaping helping of leftover state tax news, but beware, some of it may be rotten.
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November 14, 2017 How the Revised Senate Tax Bill Would Affect Oklahoma Residents’ Federal Taxes
The Senate tax bill released last week would raise taxes on some families while bestowing immense benefits on wealthy Americans and foreign investors. In Oklahoma, 44 percent of the federal tax cuts would go to the richest 5 percent of residents, and 6 percent of households would face a tax increase, once the bill is fully implemented.
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November 6, 2017 How the House Tax Proposal Would Affect Oklahoma Residents’ Federal Taxes
The Tax Cuts and Jobs Act, which was introduced on November 2 in the House of Representatives, includes some provisions that raise taxes and some that cut taxes, so the net effect for any particular family’s federal tax bill depends on their situation. Some of the provisions that benefit the middle class — like lower tax rates, an increased standard deduction, and a $300 tax credit for each adult in a household — are designed to expire or become less generous over time. Some of the provisions that benefit the wealthy, such as the reduction and eventual repeal of the estate tax, become more generous over time. The result is that by 2027, the benefits of the House bill become increasingly generous for the richest one percent compared to other income groups.
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October 4, 2017 GOP-Trump Tax Framework Would Provide Richest One Percent in Oklahoma with 61.7 Percent of the State’s Tax Cuts
The “tax reform framework” released by the Trump administration and congressional Republican leaders on September 27 would not benefit everyone in Oklahoma equally. The richest one percent of Oklahoma residents would receive 61.7 percent of the tax cuts within the state under the framework in 2018. These households are projected to have an income of at least $498,400 next year. The framework would provide them an average tax cut of $72,150 in 2018, which would increase their income by an average of 5.5 percent.
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blog September 28, 2017 State Rundown 9/28: Wisconsin Budget Finalized, Oklahoma Special Session Underway
This week, Wisconsin’s leaders finalized the state budget at last, while those in Oklahoma began a special session to close their state’s revenue shortfall. Soda tax fights made news in Illinois and Pennsylvania. And New Jersey offered Amazon $5 billion in tax subsidies.
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blog September 13, 2017 State Rundown 9/13: The Year of Unprecedented State Budget Impasses Continues
This week, Pennsylvania lawmakers risk defaulting on payments due to their extremely overdue budget and Illinois legislators will borrow billions to start paying their backlog of unpaid bills. Governing delves into why there were more such budget impasses this year than in any year in recent memory. And Oklahoma got closure from its Supreme Court on whether closing special tax exemptions counts as “raising taxes” (it doesn’t).
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blog August 23, 2017 State Rundown 8/23: Few Lingering Budget Debates Cannot Linger Much Longer
This week, Oklahoma lawmakers learned they’ll need to enter a special session to balance their budget and that they’ll likely face a lawsuit over their low funding of public education. Pennsylvania’s budget stalemate is also coming to a head as the state literally runs out of funds to pay its bills. And Amazon’s tax practices are in the news again as the company has been sued in South Carolina.
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August 17, 2017 In Oklahoma 40.7 Percent of Trump’s Proposed Tax Cuts Go to People Making More than $1 Million
A tiny fraction of the Oklahoma population (0.3 percent) earns more than $1 million annually. But this elite group would receive 40.7 percent of the tax cuts that go to Oklahoma residents under the tax proposals from the Trump administration. A much larger group, 50.0 percent of the state, earns less than $45,000, but would receive just 5.4 percent of the tax cuts.
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July 20, 2017 Trump Tax Proposals Would Provide Richest One Percent in Oklahoma with 56.3 Percent of the State’s Tax Cuts
Earlier this year, the Trump administration released some broadly outlined proposals to overhaul the federal tax code. Households in Oklahoma would not benefit equally from these proposals. The richest one percent of the state’s taxpayers are projected to make an average income of $1,379,600 in 2018.
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blog June 2, 2017 Oklahoma’s Budget Signed by Governor, but Long-Run Challenges Remain
On the last day of their legislative session, Oklahoma lawmakers finalized a $6.8 billion budget bill that was later signed by Gov. Mary Fallin. In the governor’s statement on the bill, she noted that state agencies will be hard hit by the agreement–“it leaves many agencies facing cuts for the sixth year in a row”–and that while it does include some recurring revenue, it does not address the state’s long-run structural budget challenges.
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blog May 24, 2017 State Rundown 5/24: Several States Scramble to Finalize Budgets
This week, Kansas lawmakers continued work on fixing the fiscal mess created by tax cuts in recent years, as legislators in Louisiana, Minnesota, Oklahoma, and West Virginia attempted to wrap up difficult budget negotiations before their sessions come to an end, and Delaware lawmakers advanced a corporate tax increase as one piece of a plan to close that state’s budget shortfall. Our “what we’re reading” section this week is also packed with articles about state and local effects of the Trump budget, new 50-state research on property taxes, and more.
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blog May 18, 2017 State Rundown 5/18: Tax Debate Heat Wave Hitting States
This week saw tax debates heat up in many states. Late-session discovered revenue shortfalls, for example, are creating friction in Delaware, New Jersey, and Oklahoma, while special sessions featuring tax debates continue in Louisiana, New Mexico, and West Virginia. Meanwhile the effort to revive Alaska’s personal income tax has cooled off.
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blog May 17, 2017 Investors and Corporations Would Profit from a Federal Private School Voucher Tax Credit
A new report by the Institute on Taxation and Economic Policy (ITEP) and AASA, the School Superintendents Association, details how tax subsidies that funnel money toward private schools are being… -
report May 17, 2017 Public Loss Private Gain: How School Voucher Tax Shelters Undermine Public Education
One of the most important functions of government is to maintain a high-quality public education system. In many states, however, this objective is being undermined by tax policies that redirect public dollars for K-12 education toward private schools.
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ITEP Work in Action May 2, 2017 Oklahoma Policy Institute: Itemized Deduction Reform is a Promising State Budget Solution
When Oklahomans filed their state income taxes in 2016, more than 70 percent of households used the standard deduction, which was $6,300 for individuals and $12,600 for married couples filing jointly.… -
ITEP Work in Action January 10, 2017 Oklahoma Policy Institute: Private school tax subsidy blurs the line between charitable gift and money laundering
Carl Davis is Research Director at the Institute on Taxation and Economic Policy (ITEP), a non-profit, non-partisan research organization that works on federal, state, and local tax policy issues. Photo… -
ITEP Work in Action January 10, 2017 Oklahoma Policy Institute: The tax shift rears its head
Last week the Oklahoma Senate Finance Committee approved SB 977, a bill that would suspend 23 tax credits for the next two years as a way to partially address… -
media mention January 3, 2017 The Oklahoman: Even gasoline tax may get a look to help deal with Oklahoma budget crunch
“Other state legislatures are likely to have similar discussions. Carl Davis, research director at the Institute on Taxation and Economic Policy, tells USA Today that it appears more than a… -
media mention December 23, 2016 Tahlequah Daily: Restoring Earned Income Credit will aid low-income folks
“As Walke pointed out, those who qualify must funnel a higher percentage of their yearly wages to income taxes than their well-heeled neighbors. They also pay sales taxes, and in… -
media mention December 9, 2016 Tahlequah Daily Press: Earned Income Tax Credit legislation to be filed by NW OKC lawmaker
“Because of SB 1604, a single mother with two children and working full-time at $10 an hour will experience a tax increase of $231, and a married couple with three… -
media mention November 3, 2016 Oklahoma Watch: Five Things to Remember About the Penny Tax Proposal
“The tax would fall hardest on the poor, who spend a larger portion of their income on retail purchases. It would cost the bottom 20 percent of households an average… -
media mention September 15, 2016 The Oklahoman: Flawed alternatives offered by criticis of Oklahoma criminal fees
“This is why, when the Institute on Taxation and Economic Policy analyzed tax systems in all 50 states in 2015, the group found Oklahoma families with annual income of less… -
media mention May 31, 2016 New York Times: Oklahoma Makes the Poor Poorer
“This may seem negligible to the state’s wealthy and middle class, but not to a poor family with a breadwinner struggling at the margins. The method chosen is deporable –…