Pennsylvania
State Rundown 7/26: The Dog Days of Tax
• By ITEP Staff
OHIO legislators passed a budget with unfortunate income tax cuts for high-income households. Other states turned their attention to unconventional ideas during their legislative off-seasons, for better and for worse. And there are many gems to be found in our “What We’re Reading” section below, including new research on the racial inequities that continue to pervade our communities and schools.
State Rundown 6/27: States Look at Raising Incomes at the Bottom, Taxes at the Top
• By ITEP Staff
Low-income working families got good news and bad news this week, as Earned Income Tax Credit (EITC) enhancements passed in California and advanced in Oregon, while minimum wage increases failed in Pennsylvania, Rhode Island, and Wisconsin. Meanwhile, the momentum for taxing wealth and the very rich continued to grow, as more one-percenters called for enacting progressive taxes, and Inequality.org held a star-studded conference on why and how to do so.
Most States Have Raised Gas Taxes in Recent Years
• By Carl Davis
Ohio now enjoys the distinction of being the 30th state to raise or reform its gas tax this decade, and the third state to do so this year, under a bill signed into law by Gov. Mike DeWine. While state tax policy can be a contentious topic, there has been a remarkable level of agreement on the gasoline tax. Increasingly, state lawmakers are deciding that outdated gas taxes need to be raised and reformed to…
Most Americans Live in States with Variable-Rate Gas Taxes
• By Carl Davis
The flawed design of federal and state gasoline taxes has made it exceedingly difficult to raise adequate funds to maintain the nation’s transportation infrastructure. Twenty-eight states and the federal government levy fixed-rate gas taxes where the tax rate does not change even when the cost of infrastructure materials rises or when drivers purchase more fuel-efficient vehicles and pay less in gas tax. The federal government’s 18.4-cent gas tax, for example, has not increased in over…
Taxing the Rich Works
• By Dylan Grundman O'Neill
States are putting evidence into practice with multiple efforts to improve services and tax codes through more progressive taxes on the wealthy. Clear evidence has spread widely this year, informing a national conversation about progressive taxation and leading lawmakers in multiple states to eschew supply-side superstition and act on real evidence instead. Taxing the rich works, and in this Just Taxes blog we review state-level efforts to put these proven findings into effect.
New SALT Workaround Regulations Narrow a Tax Shelter, but Work Remains to Close it Entirely
• By Carl Davis
Today the Internal Revenue Service (IRS) released its final regulations cracking down on a tax shelter long favored by private and religious K-12 schools, and more recently adopted by some “blue state” lawmakers in the wake of the 2017 Trump tax cut. The regulations come more than a year after the IRS first announced the […]
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…
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 5/1: Teacher Uprisings Continue on May Day
• By ITEP Staff
Teachers in North Carolina and South Carolina are walking out and rallying this week for increased education funding, teacher and staff pay, and other improvements to benefit students—if you’re unsure why be sure to check out research on the teacher shortage and pay gap under “What We’re Reading” below. Meanwhile, budget debates have recently wrapped up in Indiana, Iowa, Massachusetts, New Hampshire, and Washington. And major tax debates are kicking into high gear in both…
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…
Pennsylvania Budget and Policy Center: A Fair Share Tax Plan for Pennsylvania — 2019 Update
• By ITEP Staff
This paper puts forward the Fair Share Tax plan, a major step toward fixing Pennsylvania’s broken tax system and raising the revenues we need to invest in the public goods that are critical to creating thriving communities and individual opportunity in our state: education, infrastructure, protection for our air and water, and human services. The […]
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…
Reuters: Illinois Budget Debate Raises Key Questions on Taxing Retirement Income
February 28, 2019
But the policies of various states are all over the map. Data provided by the Institute on Taxation and Economic Policy shows that 11 states tax some portion of Social Security benefits, usually mirroring the federal formula. Many others tax pensions and tax-deferred accounts, although some have exemptions that protect lower-income, public sector workers and […]
Trends We’re Watching in 2019: Attempting to Double Down on Failed Trickle-Down Regressive Tax Cuts
• By Lisa Christensen Gee
It’s always troubling for those concerned with adequate and fair public finance systems when states prioritize tax cuts at the cost of divesting in important public priorities and exacerbating underlying tax inequalities. But it’s even more nerve-racking when it happens on the eve of what many consider to be an inevitable economic downturn.
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…
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…
State Rundown 1/18: Governors’ Speeches Kick Off State Fiscal Debates
• By ITEP Staff
Gubernatorial speeches and budget proposals dominated state fiscal news this week, as governors proposed a wide array of policies including positive reforms such as Earned Income Tax Credit (EITC) enhancements in CALIFORNIA, a capital gains tax on wealthy households in WASHINGTON, and investments in education in several states. Proposals to exempt more retirement income from tax, particularly for veterans, are a common theme so far this year, having been raised in multiple states including MARYLAND, MICHIGAN, and SOUTH CAROLINA. And NEW JERSEY became…
A Simple Fix for a $17 Billion Loophole: How States Can Reclaim Revenue Lost to Tax Havens
• By Richard Phillips
Enacting Worldwide Combined Reporting or Complete Reporting in all states, this report calculates, would increase state tax revenue by $17.04 billion dollars. Of that total, $2.85 billion would be raised through domestic Combined Reporting improvements, and $14.19 billion would be raised by addressing offshore tax dodging (see Table 1). Enacting Combined Reporting and including known tax havens would result in $7.75 billion in annual tax revenue, $4.9 billion from income booked offshore.
Three Tax Takeaways on Amazon’s Expansion Announcement
• By Carl Davis
Today Amazon announced major expansions in New York and Virginia, where it intends to hire up to 50,000 full-time employees. The announcement marks the culmination of a highly publicized search that lasted more than a year and involved aggressive courting of the company by cities across the nation. The following are three tax-related observations on the announcement.
State Rundown 11/8: Top Tax Takeaways from Tuesday
• By ITEP Staff
Tuesday’s elections shook up statehouses, governors’ offices, and tax laws in many states, and in this week’s Rundown we bring you the top 3 election state tax policy stories to emerge. First, voters in Kansas and other states sent a message that regressive tax cuts and supply-side economics have not succeeded and are not welcome among their state fiscal policies. Meanwhile, residents of many other states, including most notably Illinois, voted for representatives who reflect their preference for equitable, sustainable…
Comments to be delivered during IRS hearing on “Contributions in Exchange for State or Local Tax Credits” (REG-112176-18)
• By Carl Davis
ITEP views this proposal as a sensible improvement, and one that is actually overdue, to the way the charitable deduction is administered. At the end of my remarks I will discuss a few ways that the regulation could be improved. But the core point I want to emphasize is that the general approach taken here, where quid pro quo rules are applied in a broad-based fashion to all significant state and local tax credits, is…
Third and State: Pennsylvania’s Terrible Tax Code Asks More of You as You Make Less: Hitting Community’s of Color Especially Hard
• By ITEP Staff
The Commonwealth once again claims its spot in the “Terrible 10” most unfair tax structures in the nation. The lowest 20% of income earners in the state pays more than double (2.3 times) their share of family income on state and local taxes than the top 1%.
Poorest 20 Percent Pays a 50 Percent Higher Effective State and Local Tax Rate than the Top 1 Percent
• By ITEP Staff
A comprehensive 50-state study released today by the Institute on Taxation and Economic Policy (ITEP) finds that most state and local tax systems tax low- and middle-income households at significantly higher rates than wealthy taxpayers, with the lowest-income households paying an average of 50 percent more of their income in taxes than the very rich.
New Report Finds that Upside-down State and Local Tax Systems Persist, Contributing to Inequality in Most States
• By Aidan Davis
State and local tax systems in 45 states worsen income inequality by making incomes more unequal after taxes. The worst among these are identified in ITEP’s Terrible 10. Washington, Texas, Florida, South Dakota, Nevada, Tennessee, Pennsylvania, Illinois, Oklahoma, and Wyoming hold the dubious honor of having the most regressive state and local tax systems in the nation. These states ask far more of their lower- and middle-income residents than of their wealthiest taxpayers.
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