Vermont

The final Trump-GOP tax law provides most of its benefits to high-income households and foreign investors while raising taxes on many low- and middle-income Americans. The bill goes into effect in 2018 but the provisions directly affecting families and individuals all expire after 2025, with the exception of one provision that would raise their taxes. To get an idea of how the bill will affect Americans at different income levels in different years, this analysis focuses on the bill’s impacts in 2019 and 2027.

As 2017 draws to close, Congress has yet to take legislative action to protect Dreamers. The young undocumented immigrants who were brought to the United States as children, and are largely working or in school, were protected by President Obama’s 2012 executive action, Deferred Action for Childhood Arrivals (DACA). But in September, President Trump announced that he would end DACA in March 2018. Instead of honoring the work authorizations and protection from deportation that currently shields more than 685,000 young people, President Trump punted their lives and livelihood to a woefully divided Congress which is expected to take up legislation…

Though most eyes were on Congress rather than states this week, several states have been taking stock of their fiscal situations. Wyoming lawmakers considered ways to resolve budget shortfalls, Kansas and New Mexico legislators got some minor good news about their states' revenues, their counterparts in Minnesota and Vermont grappled with less encouraging revenue news, and those in West Virginia were just happy to hear their revenues had at least met expectations for once.

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 Vermont residents.

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. National and 50-State data available to download.

The tax bill reported out of the Senate Finance Committee on Nov. 16 would raise taxes on at least 29 percent of Americans and cause the populations of 19 states to pay more in federal taxes in 2027 than they do today.

The Senate tax bill released last week would raise taxes on some families while bestowing immense benefits on wealthy Americans and foreign investors. In Vermont, 40 percent of the federal tax cuts would go to the richest 5 percent of residents, and 11 percent of households would face a tax increase, once the bill is fully implemented.

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.

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…

Lawmakers who support reducing or eliminating state personal income taxes typically claim that doing so will spur economic growth. Often, this claim is accompanied by the assertion that states without income taxes are booming, and that their success could be replicated by any state that abandons its income tax. To help evaluate these arguments, this study compares the economic performance of the nine states without broad-based personal income taxes to their mirror opposites—the nine states levying the highest top marginal personal income tax rates throughout the last decade.

The “tax reform framework” released by the Trump administration and Congressional Republican leaders on September 27 would affect states differently, but every state would see its richest residents grow richer if it is enacted. In all but a handful of states, at least half of the tax cuts would flow to the richest one percent of residents if the framework took effect.

The “tax reform framework” released by the Trump administration and congressional Republican leaders on September 27 would not benefit everyone in Vermont equally. The richest one percent of Vermont residents would receive 45.1 percent of the tax cuts within the state under the framework in 2018. These households are projected to have an income of at least $505,400 next year. The framework would provide them an average tax cut of $45,250 in 2018, which would increase their income by an average of 3.8 percent.

Astonishingly, tax policies in virtually every state make it harder for those living in poverty to make ends meet. When all the taxes imposed by state and local governments are taken into account, every state imposes higher effective tax rates on poor families than on the richest taxpayers.

State lawmakers seeking to make residential property taxes more affordable have two broad options: across-the-board tax cuts for taxpayers at all income levels, such as a homestead exemption or a tax cap, and targeted tax breaks that are given only to particular groups of low- and middle-income taxpayers. One such targeted program to reduce property taxes is called a “circuit breaker” because it protects taxpayers from a property tax “overload” just like an electric circuit breaker: when a property tax bill exceeds a certain percentage of a taxpayer’s income, the circuit breaker reduces property taxes in excess of this “overload”…

A tiny fraction of the U.S. population (one-half of one percent) earns more than $1 million annually. But in 2018 this elite group would receive 48.8 percent of the tax cuts proposed by the Trump administration. A much larger group, 44.6 percent of Americans, earn less than $45,000, but would receive just 4.4 percent of the tax cuts.

A tiny fraction of the Vermont population (0.3 percent) earns more than $1 million annually. But this elite group would receive 27.8 percent of the tax cuts that go to Vermont residents under the tax proposals from the Trump administration. A much larger group, 41.5 percent of the state, earns less than $45,000, but would receive just 7.1 percent of the tax cuts.

Earlier this year, the Trump administration released some broadly outlined proposals to overhaul the federal tax code. Households in Vermont would not benefit equally from these proposals. The richest one percent of the state’s taxpayers are projected to make an average income of $1,192,800 in 2018.

The broadly outlined tax proposals released by the Trump administration would not benefit all taxpayers equally and they would not benefit all states equally either. Several states would receive a share of the total resulting tax cuts that is less than their share of the U.S. population. Of the dozen states receiving the least by this measure, seven are in the South. The others are New Mexico, Oregon, Maine, Idaho and Hawaii.

Sales taxes are an important revenue source, composing close to half of all state tax revenues. But sales taxes are also inherently regressive because the lower a family’s income, the more the family must spend on goods and services subject to the tax. Lawmakers in many states have enacted “sales tax holidays” (at least 16 states will hold them in 2017), to provide a temporary break on paying the tax on purchases of clothing, school supplies, and other items. While these holidays may seem to lessen the regressive impacts of the sales tax, their benefits are minimal. This policy brief…

This week, several states attempt to wrap up their budget debates before new fiscal years (and holiday vacations) begin in July. Lawmakers reached at least short-term agreement on budgets in Alaska, New Hampshire, Rhode Island, and Vermont, but such resolution remains elusive in Connecticut, Delaware, Illinois, Maine, Pennsylvania, Washington, and Wisconsin.

This week, we celebrate a victory in Kansas where lawmakers rolled back Brownback's tax cuts for the richest taxpayers. Governors in West Virginia and Alaska promote compromise tax plans. Texas heads into special session and Vermont faces another budget veto, while Louisiana and New Mexico are on the verge of wrapping up. Voters in Massachusetts may soon be able to weigh in on a millionaire's tax, the California Senate passed single-payer health care, and more!

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 used as profitable tax shelters by high-income taxpayers. By exploiting interactions between federal and state tax law, high-income taxpayers in nine states are currently able […]

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.

This post was updated July 12, 2017 to reflect recent gas tax increases in Oregon and West Virginia. As expected, 2017 has brought a flurry of action relating to state gasoline taxes. As of this writing, eight states (California, Indiana, Montana, Oregon, South Carolina, Tennessee, Utah, and West Virginia) have enacted gas tax increases this year, bringing the total number of states that have raised or reformed their gas taxes to 26 since 2013.

The trend is clear: states are experiencing a rapid decline in state corporate income tax revenue. Despite rebounding and even booming bottom lines for many corporations, this downward trend has become increasingly apparent in recent years. Since our last analysis of these data, in 2014, the state effective corporate tax rate paid by profitable Fortune 500 corporations has declined, dropping from 3.1 percent to 2.9 percent of their U.S. profits. A number of factors are driving this decline, including: a race to the bottom by states providing significant “incentives” for specific companies to relocate or stay put; blatant manipulation of…