Thanks for visiting Tax Justice Blog, a project of the Institute on Taxation and Economic Policy and Citizens for Tax Justice. We've made some organizational changes, but you can still find the same insightful commentary on federal and state tax policy issues at ITEP's new blog, Just Taxes (justtaxesblog.org)
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.
Today the House Ways and Means Committee will hold its first tax reform hearing of 2017, which marks the official opening of the tax reform debate in Congress. True tax reform, if the committee sought to achieve it, could create more jobs and ensure companies are paying their fair share by cracking down on the massive offshore tax avoidance that companies engage in. Unfortunately, the panel of witnesses for today's hearing is largely made up of representatives of various major corporations that are beneficiaries of the loopholes in our current corporate tax laws. Given this, it seems likely that these panelists will not push for a fairer corporate tax code, but rather a code that allows them to avoid even more taxes and incentivizes moving more jobs offshore.
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...
South Carolina lawmakers this week raised the state's gas tax for the first time in 28 years, a time period that tied for the third-longest in the nation. While the increase was meaningful and hard-fought, the final result remains flawed in ways that could have been easily remedied or avoided.
This week saw a springtime mix of state tax debates in all stages of life. In West Virginia and Louisiana, debates over income tax reductions and comprehensive tax reform are full of vigor. Other debates that bloomed earlier are now settled, such as Florida's now-complete budget debate and the more florid debates over gas taxes in South Carolina and Tennessee. Still others are just now beginning to sprout, as Oregon begins to debate its gas tax and a new gross receipts tax, a tax study starts up in Arkansas, another round of tax cuts are on the table in North Carolina, and a special session has been announced in New Mexico.
As expected, 2017 has brought a flurry of action relating to state gasoline taxes. As of this writing, four states (California, Indiana, South Carolina, Tennessee, and Utah) have enacted gas tax increases this year, bringing the total number of states that have raised or reformed their gas taxes to 23 since 2013.
These increases will play an important role in offsetting the loss of gas tax purchasing power caused by rising construction costs and improvements in vehicle fuel-efficiency. Although it's worth mentioning that some of these long-overdue updates were paired with cuts in unrelated taxes that will create challenges for funding other areas of the budget, including education and health.
Lawmakers across the political spectrum recognize the need for additional spending to maintain and upgrade our nation's transportation infrastructure. According to the Federal Highway Administration, there is a backlog of $836 billion in needed repairs and improvements to roads and bridges and an additional $90 billion backlog of public transit projects. Maryland Democratic Representative John Delaney has been one of the most vocal lawmakers in the debate over funding infrastructure and has recently proposed two bills seeking to significantly increase spending on these critical needs. Unfortunately, rather than just funding infrastructure, both of Rep. Delaney's bills would make the problem of inadequate revenue worse by giving away billions of dollars in tax breaks to corporations.
President Donald Trump's tax sketch released in late April is the starting point for federal tax reform discussions. For now, the sketch includes too few details to properly analyze its revenue and distributional impacts, but based on limited information, corporations and the wealthy stand to benefit most. Below are resources ITEP has produced on tax reform. If and when the Trump Administration or Congress release more details about a proposed tax reform plan, ITEP staff will continue to provide analyses and commentary, especially about how any tax proposal would affect working people and the federal government's ability to fund basic services and programs.
Two states are on the verge of embracing a tried and tested anti-poverty policy, the Earned Income Tax Credit (EITC). In the past two weeks, lawmakers in both Hawaii and Montana passed EITC legislation, which governors in both states are expected to sign.
Thank you for visiting Tax Justice Blog. CTJ and ITEP staff will soon retire this domain. But ITEP staff are still blogging! You can find the same level of insight and analysis and select Tax Justice Blog archives at our new blog, http://www.justtaxesblog.org/
CTJ Social Media
ITEP Social Media
