Moody’s does not believe that corporate tax cuts are trickling down to working people as bonuses and pay raises. The real problem with the corporate PR campaign is that even those economists who supported Trump’s corporate tax cut and claimed it would help workers do not believe that it works this way.
Trump-GOP Tax Law
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blog January 26, 2018 Moody’s and Conservative Economists Agree: The Trump Corporate Tax Cut Is Not Helping Workers
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blog January 26, 2018 Federal Tax Law Will Have Mixed Effect on Taxpayers’ State Tax Bills and States’ Revenue
Most states piggyback on federal law to some extent for their own taxes, especially personal and corporate income taxes. These states in particular must understand what the federal changes mean for their own tax codes and decide whether to remain “coupled” to changes in the tax bill, decouple from them or take other action in response.
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blog January 25, 2018 IRS Can and Should Block “Charitable Contribution” Schemes
States’ attempts to work around the new federal tax law and ensure their residents continue to maximally benefit from state and local tax (SALT) deductions have been in the news since the beginning of the year. At a panel discussion for tax professionals in Washington Thursday, Thomas West, tax legislative counsel at the Treasury Department, cast doubt on proposed work-around schemes that would convert state income tax payments into “charitable contributions.”
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blog January 24, 2018 It’s a Small Bonus After All
The Walt Disney Corporation announced this week that in the wake of the new tax bill’s passage, it will spend $125 million on one-time bonuses and $50 million on an education program for some employees, all in 2018. This $175 million spending commitment is notable for two reasons: it’s temporary, and it’s a drop in the bucket for a company that’s likely to see annual tax savings of $1.2 billion a year and has already committed to a $50 billion-plus corporate acquisition of 21st Century Fox’s assets.
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blog January 18, 2018 Apple Gambled on Congressional Spinelessness on Tax Policy— and Won
Now, Apple Inc. would like the American public to know that it has “a deep sense of responsibility to give back to our country” a small fraction of its multi-billion-dollar tax cut haul. However, the company’s splashy press release is devoid of any specifics on the jobs it will create as a result of the tax bill. Like other corporate announcements, the company’s recent proclamation of newfound patriotism should be viewed as a public relations ploy designed to convince a skeptical public that working families will see some trickle-down benefit from this historic corporate giveaway.
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blog January 17, 2018 Repealing, or Working Around, the Cap on State and Local Tax Deductions Would Make the Trump-GOP Tax Law Even More Unfair
A bipartisan proposal in Congress to eliminate the new $10,000 cap on federal deductions for state and local taxes (SALT) would cost more than $86 billion in 2019 alone and two-thirds of the benefits would go to the richest 1 percent of households. Unfortunately, “work around” proposals in some states to allow their residents to avoid the new federal cap would likely have the same regressive effect on the overall tax code.
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blog January 12, 2018 The Walmart Smiley Face Is Lying: Corporate Tax Cuts Are Not Causing Pay Raises and Bonuses
Last night, Yahoo reported that 81 corporations had announced pay raises and bonuses that they claim result from the Trump-GOP tax law’s reduction in the official corporate tax rate from 35 percent to 21 percent. Of these 81 corporations, 13 were included in ITEP’s most recent corporate tax study, which focuses on the Fortune 500 companies that were profitable every year from 2008 through 2015. These 13 companies had a combined effective tax rate of just 19.1 percent, which undermines the idea that the federal corporate tax rate was holding back their ability to pay workers.
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blog January 9, 2018 New Tax Law Allows Affluent Taxpayers to Write off K-12 Private School Tuition
Taxpayers are still learning about the intended and unintended consequences of the major tax overhaul that Republican leaders ramrodded through late last year. One little-noted provision subverts state laws that… -
blog December 19, 2017 Final Tax Bill Hits Parents of College Students Harder than Other Taxpayers
While many provisions targeting higher education in previous versions of the tax plan were eventually dropped, little thought has been given to how the bill still raises taxes on parents at the time they are trying to pay for college tuition.
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blog December 18, 2017 Corker Claims Provisions Benefiting Him Could Not Have Changed His Vote Because He Never Read the Bill
Many Republicans who had previously claimed to be deficit hawks have been cheerfully supportive of major tax-cutting legislation as it has moved forward this fall. But one Republican Senator, Bob Corker of Tennessee, has taken a defiant stance on the issue, insisting that “passing off increased debt to future generations” would be a deal-breaker for him. When the Senate passed its version of the tax plan last week, Corker was the only Republican to vote No.
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blog December 15, 2017 GOP Leaders Scrounge Up Money to Lower Top Tax Rate for the Rich But Not to Help Low-Income Working Families with Children
Republican leaders who rejected a proposal to have corporations pay a single percentage point higher tax rate to benefit families with children have tapped the exact same source of savings to provide more breaks for the richest 1 percent of taxpayers. The table below compares the number and share of households nationally and in all 50-states who would benefit from the proposal to reduce taxes for working families with children versus the ”compromise” to cut the top individual tax rate — below either the House or Senate version – to 37 percent for couples with incomes above $1 million.
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blog December 14, 2017 ITEP Resources for the Tax Reform Debate
ITEP researchers have produced new reports and analyses that look at various pieces of the tax bill, including: the share of tax cuts that will go to foreign investors; how the plans would affect the number of taxpayers that take the mortgage interest deduction or write off charitable contributions, and remaining problems with the bill in spite of proposed compromises on state and local tax deductions.
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blog December 13, 2017 Latest “Compromise” for Tax Plan Is Even Worse than Previous Proposals, Would Reduce the Plans’ “Losers” by Less than 17,000 Taxpayers
Earlier this week, ITEP explained that two possible “compromises” to improve the Senate tax bill would accomplish very little other than make the plan more expensive. Incredibly, Republican leaders are… -
blog December 13, 2017 Parents of College Students: The Tax Plans’ Losers that No One Is Talking About
Parents of college students or kids in their last years of high school are more likely to face a tax hike than others under the tax legislation moving through Congress. Higher education has entered the tax debate because the House bill (but not the Senate bill) would repeal several provisions that make college and graduate education more accessible. But little thought has been given to how the tax bills would affect the parents of college students in more direct ways and make it difficult for them to finance college for their kids. If tax legislation were allowed a reasonable number of hearings and time for debate, this is exactly the sort of issue that could be addressed.
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blog December 12, 2017 Who Is “America First” Under the Tax Plan? The Rich First, Foreign Investors Second, Then the Rest of Us.
In his inaugural speech, President Trump told the world that Washington would be driven by a principle of “America First.” But the tax plans moving through Congress only put the richest Americans first. Everyone else comes after foreign investors.
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blog December 12, 2017 Treasury’s 1-Page Memo Reasserts False Claims that Tax Cuts Largely Pay for Themselves — But Only When Accompanied by Spending Cuts
Treasury Secretary Steven Mnuchin claimed for weeks that his department would release a study showing that the $1.5 trillion tax cut moving through Congress would “pay for itself.” On Monday he released a one-page memo that asserts, without evidence, that economic growth resulting from President Trump’s policies would raise enough revenue to more than offset the costs of the tax cuts.
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blog December 10, 2017 “Compromises” Under Discussion for the State and Local Tax Deduction Do Not Fix Flawed Tax Bills
Republicans in Congress are reported to be considering two versions of a change they claim would “improve” the current bills by making them more generous to residents of higher-taxed states. As illustrated by these estimates, the reality is that these proposals would make little difference on those states and taxpayers hit hardest.
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blog December 10, 2017 Even with Potential SALT Compromises, Senate Bill Forces California and New York to Shoulder a Larger Share of Federal Taxes While Texas, Florida, and Other States Will Pay Less
The Senate tax bill, with or without either of the compromises that could be added to it, would shift personal income taxes away from Florida and Texas to states like California and New York, which are already paying a high share relative to their populations.
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blog December 4, 2017 They Can’t Help Themselves: GOP Leaders Reveal True Intent Behind Tax Overhaul
The hand-written scrawls in the margins of the hastily written 500-page Senate tax bill had barely dried when lawmakers began to reveal the true motivation behind their rush to fundamentally overhaul the nation’s tax code.
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news release December 2, 2017 Senate Okays Unpopular Plan to Widen Income Inequality, Make the Rich Richer
But so far, Republican leaders have demonstrated that, for them, the only voices that matter in this debate are those that fund their campaigns.
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blog December 1, 2017 New ITEP Report Explains How Tax Reform Should Eliminate Breaks for Real Estate Investors Like Trump
A new report from ITEP provides more details on the many breaks and loopholes for wealthy real estate investors like Trump and what a true tax reform would do to close them.
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blog November 30, 2017 Republican Senators Debate Size of “Pass-Through” Break, But Proposed Compromises Will Make No Difference to Anyone Who Is Not Well-Off
Senators Ron Johnson of Wisconsin and Steve Daines of Montana want the tax bill on the Senate floor to be amended to offer a more generous tax break for “pass-through” businesses. We have estimated how all the provisions in the tax bill would impact each income group under three possible scenarios. The only thing different in each scenario is the size of the deduction for pass-through income: 17.4 percent (the deduction in the bill as this is written), 20 percent and 27 percent. We find that the size of the pass-through break makes no difference for anyone who is not well off.
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blog November 30, 2017 Chained CPI Would Raise Everyone’s Personal Income Taxes in the Future, Would Hurt the Poor Right Away
One of the findings is that every income group would face higher personal income taxes in years after 2025 (including 2027). Chained CPI would gradually push taxpayers into higher income tax brackets and make the standard deduction, the Earned Income Tax Credit, and several other breaks less generous over time. The switch to chained CPI would cause some low-income people to face a tax hike starting in 2019, the second year the plan would be in effect.
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blog November 22, 2017 Mick Mulvaney and the 19 States Paying Higher Taxes Under the Senate Tax Bill
One of the more surprising findings of ITEP’s recent estimates on the Senate tax bill is that 19 states would pay more overall in federal taxes if the bill becomes law. This is not just an increase in the personal income taxes paid (which would happen in some states under the House bill). This is an increase in their net federal taxes overall, even including the assumed benefits of corporate tax cuts and estate tax cuts.
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report November 6, 2017 Analysis of the House Tax Cuts and Jobs Act
The Tax Cuts and Jobs Act, which was introduced on Nov. 2 in the House of Representatives, would raise taxes on some Americans and cut taxes on others while also providing significant savings to foreign investors.