Texas

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.

As federal aid ends and economic uncertainty grows, local governments face tough budget choices. Now is the time for localities to protect vulnerable residents and build stronger, more equitable fiscal foundations.

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.

As state legislative sessions come to a close, decisions on tax policy are being made. Several southern states have cut taxes, while the northeast is making some more measured reforms.

States use the final hours of their legislative sessions to address deficits and preserve revenue in preparation for the times ahead.

The House of Representatives’ recently passed tax bill changes course on taxing multinational corporations engaged in shifting U.S. profits overseas, offering massive tax giveaways that weaken American revenues and risk sending more American corporate investment offshore.

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.

With spring in full bloom ,many state lawmakers are reaching tax policy agreements. Out west, lawmakers in North Dakota and Texas have moved major property tax cuts. Meanwhile, in the east and south, Vermont appears likely to pass an expansion to its Child Tax Credit and Earned Income Tax Credit, and South Carolina lawmakers are aiming to make deep, drastic cuts to the state’s income tax.

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

While some states are preparing for uncertainty – slowing revenue growth, chaos from unpredictable tariffs, cuts to federal programs, etc. – others continue to move forward with plans for deep tax cuts.   For instance, Georgia Gov. Brian Kemp signed legislation accelerating the cut to the personal income tax rate, which is currently phasing down. […]

Congressional Republicans have floated a proposal to strip the Child Tax Credit from millions of children who are U.S. citizens and legal residents in situations where their parents do not have Social Security numbers. Approximately 4.5 million citizen children with Social Security numbers would lose access to the credit under this proposal.

Contact: Jon Whiten ([email protected]) According to multiple reports, the Trump administration plans to eliminate the IRS Direct File program, a free electronic system for filing tax returns directly to the agency. Statement from ITEP Executive Director Amy Hanauer “The tax preparation industry has for years lobbied to prevent the IRS from providing a tool to […]

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.

Below is a list of tax expenditure reports published in the states.

Worries about housing costs and property tax bills are leading people to check the history books for solutions, but there’s a danger that they’ll repeat past mistakes. If anti-tax lawmakers carelessly weaken property taxes as they did in the 1970s, as they did with California’s Proposition 13, they will undercut public finances, making municipalities, school districts, and other special districts worse off.

A new ITEP report finds that states could raise $19 billion a year with one policy change targeting corporate tax avoidance. That policy, worldwide combined reporting, strengthens state corporate taxation by giving states a full view of multinational corporate profits, essentially eliminating the tax savings that companies currently see by pretending their profits were earned in Switzerland, the Cayman Islands, and other international tax havens.

Universal adoption of mandatory worldwide combined reporting would boost state corporate income tax revenues by roughly 14 percent. Thirty-eight states and the District of Columbia would experience revenue increases totaling $19.1 billion.

Tax policy proposals are a hot topic of conversation across the country. Both North and South Dakota are considering property taxes cuts, while proposed cuts in Florida, Mississippi, and Texas are percolating. Meanwhile, fiscal conditions are tight in states like Alaska, Tennessee, Oklahoma, and West Virginia. None are on the cusp of passing new revenue, but years of recent tax cuts and inflation have caught up to states and many lawmakers have revenue gaps to close. 

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.

Tax changes have been proposed or are nearing the finish line in many states. Kentucky is poised to enact an income tax cut as a bill heads to the governor’s desk. In Pennsylvania, Gov. Josh Shapiro’s budget proposal called to accelerate existing corporate tax cuts while closing corporate tax loopholes by enacting combined reporting. Ohio Gov. Mike DeWine proposed a new credit for children of working parents. And Virginia Democrats countered Gov. Glenn Youngkin’s proposed tax cuts with a plan of their own that includes an increase to the state’s Earned Income Tax Credit (EITC) and a one-time, nonrefundable tax…

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.