In the Tax Justice Digest we recap the latest reports, blog posts, and analyses from Citizens for Tax Justice and the Institute on Taxation and Economic Policy. Here’s a rundown of what we’ve been working on lately.
Here we go again
The Trump Administration on Wednesday released a tax sketch that is a roadmap for redistributing wealth upward. ITEP Executive Director Alan Essig in a statement said, “Our policymakers owe working people more than tax cuts (for the rich) with unrealistic promises of economic growth.” Among other things, the plan would cut the statutory corporate tax rate to 15 percent from 35 percent. Turns out many profitable Fortune 500 companies are already paying far less than the proposed statutory corporate tax rate. The tax sketch doesn’t include critical details such as how the administration proposes to pay for the plan. But, hey, at least the “biggest tax” cut plan wasn’t sketched out on a napkin.
3 Percent and Falling
ITEP today released the state companion report to its federal corporate study that examines effective income tax rates paid by profitable Fortune 500 companies from 2008 to 2015. Thanks to loopholes, subsidies and other tax giveaways, profitable corporations pay an average effective state tax rate of 2.9 percent, which is less than half the nationwide average 6.25 percent state corporate tax rate. Corporations’ declining state taxes come at a time when many states are grappling with how to fill budget gaps. Given these facts, it is hard to understand why some states continue to weigh how to further cut state corporate taxes. Read the study or read a brief blog summarizing the study.
Young Immigrants’ Tax Contributions Increase under DACA Protection
A new Institute on Taxation and Economic Policy report examined the state and local tax contributions of young immigrants eligible for DACA (deferred action for childhood arrivals) and found that, collectively, they annually contribute $2 billion in state and local taxes, but this number would drop by nearly half without DACA protection. The report notes that employment rates go up for young immigrants receiving DACA protection (from 51 percent to 87 percent), and they experience increased wages. Read more
Income Tax Best Solution for Alaska Budget Woes
For years, Alaska was so awash in oil revenue that it didn’t have a state income tax, and it provided all state residents with a yearly payout. Due to market forces, this has changed, and the state is now weighing how to raise enough revenue to fund basic priorities. A new ITEP report looks at Alaska’s revenue-raising options and finds that for most Alaskans, a state income tax would take less from their bottom line than other revenue-raising alternatives. Read a blog about Alaska’s budget concerns or read the full analysis.
The State Rundown
This week, transportation funding debates finally concluded with gas tax updates in Indiana, Montana, and Tennessee, and appear to be nearing an end in South Carolina. Meanwhile, Louisiana and Oregon lawmakers debated new gross receipts taxes, and Texas legislators considered eliminating the state’s franchise tax. Read more
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