Tax Justice Digest: Kansas again, state budget woes, and corporate tax cuts

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. 

Trickle-down policies did not and will not work
In December, Kansas Gov. Sam Brownback told the Wall Street Journal that Donald Trump should take a page from his book and dramatically cut taxes. The problem with this recommendation is that for the last few years, his state has been the poster child for tax cuts gone awry. In a recent blog, ITEP Senior Analyst Lisa Christensen Gee outlines how Kansas’s regressive tax policies have led to a projected two-year, $1.1 billion budget shortfall. The state’s chronic fiscal mismanagement is not a model for other states, much less the federal government. Read more

There’s ‘gold in them there hills’
Lawmakers on both sides of the aisle are eyeing the $2.5 trillion corporations have stashed offshore as a potential source of revenue to fund the nation’s critical priorities. But there are problems with existing proposals.

President-elect Trump has proposed a 10 percent transition tax that would give multinational corporations a $514 billion tax break. Corporations owe more than $700 billion on their offshore profits. Trump’s plan would forego 70 percent of that revenue. In laymen’s terms, this means his plan would give away the store to corporations in exchange for a short-term revenue gain. Read ITEP’s new brief to learn more about Trump’s proposal and for a list of the 10 companies that stand to benefit most. Hint: Think tech and banking sectors.

In case you missed it, late last year ITEP published a comprehensive guide to repatriation proposals. Instead of giving corporations a tax break on their offshore cash, the piece concludes the best policy would be closing the loophole that allows corporations to indefinitely defer taxes on their offshore cash.

Public Says “No” to Tax Cuts, But Congress Says, “Yes”
A new blog by Richard Phillips, an ITEP senior policy analyst, argues that plans floated by Congress and the incoming Trump Administration would dramatically cut taxes for the wealthy and corporations and eliminate revenue necessary to meet the nation’s most basic priorities. In other words, if either blueprint for Ryan or Trump’s plans (or some combination of both) becomes law, the outcome will likely be the furthest thing from true “reform” of our tax system. Oh, and recent public opinion polling finds regardless of party affiliation, voters do not want tax cuts for the wealthy and corporations. Read more.

Or, if you’re into the vagaries of political wrangling, read Phillips’s piece on the state of play regarding federal tax policy.

State Rundown: Revenue Woes Piling up Faster than Solutions
There most certainly will be a lot of focus on federal tax policy this year, but various states will have to make critical tax and budget decisions this year as well. This week’s ITEP State Rundown highlights: states where there are revenue shortfalls, governors’ budget proposals, and other tax news around the country. So far, most state legislative proposals are focused on slashing taxes and reducing public investments, despite public opinion and economic research showing the benefits of well-funded state services and progressive tax policies. Read more

If you have any feedback on the Digest or tax stories you’re watching that we should check out too please email me  rphillips@itep.org

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